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this video is brought to you by morning
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brew
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hi welcome to another episode of cold
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fusion
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since the inception of mainstream
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computers intel has been instrumental in
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powering the industry
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they were the first company to invent
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the cpu which is the brain of all
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computers
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and for decades their chips dominated
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the market
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in the 1950s and 60s before intel's
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groundbreaking chip
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circuit chips were needed for each
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application a computer performed
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in contrast a cpu is a single chip that
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could be programmed to run anything
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the impact of the invention of the cpu
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can't be understated
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and to this day the technology remains
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intel's main product
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but recently intel's performance lead
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has all but been eaten away
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by amd and they're also being challenged
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by apple as we saw in a recent episode
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to make things worse they've lost the
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crown of america's most valuable chip
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manufacturer
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to nvidia a company known for their
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graphics chips and more recently
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ai research in this two-part series
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we'll take a look at how intel was
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founded and how they came to dominate
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the industry
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and then in the next episode we'll look
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at how they manage to get into trouble
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and what lies ahead in the future let's
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begin
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you are watching cold fusion tv
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[Music]
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first developed in 1947 by john bardeen
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and walter brettain and under the
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supervision of william shockley the
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transistor
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is perhaps the most revolutionary
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invention of the 20th century
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the original purpose of the device was
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simply to amplify
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that is strengthen electrical signals
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but it soon turned into something much
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greater
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no one could have expected the
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revolution that something so physically
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small
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would bring to business culture and
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society
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today our computers have billions of
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transistors tucked away in their chips
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and it's what makes them tick
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so how does it work in addition to
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amplifying signals
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a transistor at its fundamental level
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can essentially behave as a switch
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they can control the flow of electrons
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by being either in an on state
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or an off state these on off states can
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be translated into binary code
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a one or a zero which is how all of our
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data currently exists
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by switching between states billions of
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times a second
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these little transistors allow data to
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be processed and manipulated
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giving us the digital world of today
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even in the late 1940s transistors held
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a lot of promise
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if enough of them could be packed into a
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sufficiently small space
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there was potential for some serious
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computing power
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this is what intel would eventually do
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but for the time being there was still a
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major
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problem the problem was that these
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transistors had to be connected by wires
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these connections could only be so tiny
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before the system becomes unreliable
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the dream for scientists was to condense
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a whole circuit
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the transistors the wires and everything
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they needed
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into a single step a printed circuit
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board
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if they could create a miniature circuit
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in one piece all the parts could be much
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smaller
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and also mass-produced the answer
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was the integrated circuit the idea was
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to use a chemical etching process
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to create the transistor connections
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instead of wires
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the next step enables us to interconnect
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the various components
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and to make contact with them but
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instead of another diffusion
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a layer of metal is deposited over the
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entire surface of the wafer
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then by using the proper masks the
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excess metal can be etched away
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the group that came up with the
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breakthrough of the integrated circuit
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was also headed by william shockley the
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same man in charge of the transistor
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team
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as novel as this idea was the technology
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was impractical at the time
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more on this later
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william shockley was not the most
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pleasant team leader
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and he had a bad reputation these
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conflicts that his personality had with
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others
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caused him to leave the east coast of
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the us and travel west to start afresh
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his latest endeavor would be humbly
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named shockley semiconductor lab
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despite his personality flaws he had an
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eye for talent
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and managed to recruit eight of the
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greatest engineers and scientists the
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united states had to offer
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some of these recruits in shockley's lab
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would go on to create intel
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but before doing so they would first
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create the most
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significant company in technology
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history a company forgotten by most
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today
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the way this came to be was an
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interesting story within itself
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eight members of shockley's
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semiconductor lab just grew tired of his
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erratic and paranoid nature
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in fact some of you that have read my
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book will know that william shockley got
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jealous of his team's discovery of the
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transistor and wanted to receive
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all the credit despite not being
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directly involved in it
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these eight dissenting members of
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shockley's lab were
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sheldon roberts eugene kleiner victor
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greenwich
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j last julius blanc robert noyce
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gordon moore and jean hoenrei they would
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be given the nickname
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the traitorous eight one day
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in a san francisco hotel the group
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gathered together
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recognizing all of their talents and
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despising william shockley
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they hatched a plan together they all
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pledged to sign a dollar bill
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this represented their commitment to
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starting a new company
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this meeting at the san francisco hotel
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would be later called
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one of the top 10 days that changed
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history by the new york times
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the plan was to start a new company that
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was to be under the reluctant leadership
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of robert noyce
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a brilliant mit researcher at first
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noyce was hesitant to take on such an
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ambitious project
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as he had a young family startups like
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this were a huge risk in the 1950s
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but after some convincing noyce bit the
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bullet and signed the dollar bill
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and with that the traitorous 8 had a new
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spin-off company
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and its name was fairchild semiconductor
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fairchild semiconductor was in essence
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the origins of silicon valley
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i personally find it amazing at how
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influential this company was
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fairchild semiconductor started silicon
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valley in both technology and culture
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the culture was like a college dormitory
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for competitive geniuses
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and staff were making big money
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competing with each other
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soon fairchild was on a meteoric rise
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the company operated differently to
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anything that had been seen before
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risk over stability innovation over
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tradition
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rapid experimentation over slow and
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steady growth
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there was a lot of buzz in the media
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about this new and exciting company
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they were like the amazon apple or
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google of their day
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in both the stock market and technology
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space
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out of this company's talent came of
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course intel
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but also lsi logic sandisk
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and advanced micro machines otherwise
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known as
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amd the latter would play a big role in
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the second part of the story
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it's interesting to note that by the
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1980s
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100 different companies had sprung from
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the talent pool of fairchild
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after securing financial backing the
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group at fairchild would come together
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to produce the first
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practical integrated circuit by using a
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silicon semiconductor
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the invention for the first time made it
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practically
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possible to tightly pack transistors
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together but also
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allow them to function independently
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despite being made from a single piece
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steve jobs in 2005 would say that
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silicon valley is a bit like running a
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relay race
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and fairchild semiconductors were the
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ones that passed the baton to him
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to bring in the era of personal
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computing to this day
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fairchild remains important in samsung's
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supply chain
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so fairchild semiconductor had invented
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the practical integrated circuit
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and birthed silicon valley culture they
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were flying high
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and well ahead of established tech
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titans like ibm and motorola
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but as time went on staff began to leave
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fairchild in pursuit of other endeavors
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companies like texas instruments and
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motorola started catching up
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robert noyce realized that he needed to
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start something new
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in 1968 he and his fellow employee
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gordon moore
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began a new project to make memory chip
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devices these were to compete with
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magnetic hard drives
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noise and more status in the industry
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coupled with the rise of venture
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capitalists
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resulted in 2.5 million dollars being
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raised in under two days for their new
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project
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the pair of them picked the best and
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brightest minds to join the new company
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among these was andy grove a
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hungarian-born chemical engineer
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that joined fairchild's r d division in
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1963
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his role was director of operations
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former employees would state
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that hiring andy was the best decision
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noes ever made
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he was a driven man who wanted
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everything to be well done
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and done on time neither noise nor more
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were stern enough to crack the whip
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together they called their new company
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intel
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an abbreviation of integrated
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electronics which also happened to
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conjure the word intelligence
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it didn't garner a lot of attention from
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the media at the time but within silicon
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valley there was a great deal of
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excitement
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as intel engineers continued to tinker
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with the design of their memory chip
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they decided that they should take on
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some custom work to make some revenue to
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further build up the business
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in the spring of 1969 a simple request
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came into the intel building altering
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the course of computer history
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in 1969 a japanese firm busycom
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contracted intel to design 12
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specialized microchips for its new
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calculator
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unfortunately what busycom wanted was
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going to be way too complicated and
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expensive for intel to produce
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a young engineer named ted hoff was in
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charge of designing the architecture and
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he raised his concerns
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he thought intel had bitten off more
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than they could chew
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when hoff voiced his concerns to robert
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noyce noyce replied
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if you can think of a simpler design you
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should pursue it
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noyce always encouraged the people in
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this lab to run with their ideas and see
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where they went
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this next part was the genius of a true
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inventor you see
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ted hoff envisioned a single chip that
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could be programmed for a specific
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application
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in this instance it would function like
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a calculator but it could be programmed
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to do anything
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the normal thing to do in the 1960s was
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to build custom circuit chip boards
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for each application in this new
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architecture of hofs
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the memory calculating processing
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functions and other aspects of a
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computer
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could be combined into one integrated
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circuit in this case the 12 chips could
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just be one
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a unit which could run all programs on
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its own a system
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called a cpu when the design of this new
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type of architecture was done
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they needed someone who could put it all
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into silicon thus
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another talented chip designer federico
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fagin
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was brought in to oversee the
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implementation
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he arrived at intel in april of 1970 and
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brought his own experience to bear on
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the project
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federico fagin was also from fairchild
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and he had invented
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silicon gate technology a fundamental
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building block for the microprocessor
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fairchild wasn't taking advantage of his
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invention and he wanted to use his new
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technology to design advanced chips
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he was brought to intel six months late
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for the project because the company was
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running behind
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the very next day after he was hired
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japanese management from busycom
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was due to visit and it didn't go well
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when the day that i joined intel stein
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mazer
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showed me a block diagram that was to be
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the
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busycom project so shima arrived he said
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where
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i'm here to check where is logic and i
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said uh oh
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i gave him the what i was given you know
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this block diagram and this stuff
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and he said no good this is i had this
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this only idea i want logic and i said i
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don't have any logic
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you bad you bad
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i said i just arrived here i just i just
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was hired yesterday
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you late
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and so i was i was buffal
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and of course at that point there were a
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number of very agitated phone calls
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and i could tell by the tone of the
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conversation but they were not
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very gentle phone calls and uh
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and basically in the meantime i tried
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very hard
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to figure out a time schedule that would
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really minimize the delay that was
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incurred by intel
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but to do that i needed an engineer to
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help me and also adequate layout and
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technician support
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i was by myself i had no engineers no
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layout people
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that's it i had to do it by myself
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federico
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basically had to do everything himself
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and just figure it out
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despite the odds in february of the
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following year working kits were
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delivered to the clients
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and in november of that year the intel
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404
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made its debut on the market and the
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error of the cpu microprocessor had
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begun
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the whole team's efforts had led to the
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world's first cpu
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essentially a whole general purpose
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computer on a chip
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ted hof convinced management that they
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should sell this general purpose chip as
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a standalone product
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the result was the intel 4004 cpu
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it had more than 2 000 transistors and
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the device was advertised as a
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quote computer on a chip
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at 3.2 by 4.2 millimeters the chip that
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the intel team had unveiled had as much
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power as one of the first electronic
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computers the eniac of the 1940s used 18
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000 vacuum tubes and was so large it
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filled an entire room
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though computers had gotten smaller
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since those days what intel had done was
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still a giant leap above what was
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available at the time
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the intel 4004 chip took a current day
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1969 computer that was the size of a
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refrigerator
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and shrunk it down to fit onto a
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fingertip
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to give even more perspective the ibm
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1620
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cost 2 500 a month to rent and had the
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same performance as the intel 4004
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chip which cost just 60 dollars
00:14:52
in this moment the digital revolution
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had officially begun
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[Music]
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amazingly some still had reservations
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when the 4004 cpu was unveiled people
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couldn't believe it
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ted hoff would recall one such
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interaction at a computing conference in
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las vegas 1971.
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quote one customer who came in was
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adamant that we had such
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nerve to claim that we had a computer on
00:15:17
a chip one of our engineers handed him
00:15:20
the data sheet
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and he looked at it and exclaimed oh my
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god
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it really is a computer it was something
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that people did not believe was possible
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at the time
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[Music]
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it's also important to note that
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personal computers didn't exist
00:15:34
it was assumed that there will be no
00:15:36
consumer market for it
00:15:38
ken oslon chairman of digital equipment
00:15:41
corporation
00:15:42
famously remarked in the sunday times
00:15:44
quote there is no reason
00:15:46
anyone would want a computer in their
00:15:47
home obviously
00:15:49
this was wrong a slightly later version
00:15:52
of the chip
00:15:53
the intel 8080 would be at the heart of
00:15:55
the first
00:15:56
widespread personal computer it was in
00:15:59
the form of a kit
00:16:00
built by the company mit this
00:16:02
intel-powered computer
00:16:03
was the very same that was on the front
00:16:05
of a magazine that bill gates was shown
00:16:07
kicking off microsoft and the very same
00:16:09
computer that some californian hippies
00:16:11
would show off to their friends at the
00:16:12
homebrew computer club
00:16:14
kicking off apple computer
00:16:18
before we continue let's check out a
00:16:20
quick news report from our sponsor
00:16:21
morningbrew
00:16:22
intel's industry competitiveness has
00:16:24
been so poor that it was announced last
00:16:27
wednesday that its ceo
00:16:28
bob swann will be stepping down as of
00:16:30
the 15th of february
00:16:32
he'll be replaced by vmware's ceo pat
00:16:35
gelsinger
00:16:36
the news for intel comes after more chip
00:16:38
delays competition from amd
00:16:40
samsung and also apple breaking ties
00:16:43
with them after 15 years
00:16:45
intel has been accused of quote failed
00:16:48
leadership by investors
00:16:50
if you're short on time and want to get
00:16:52
all of the news in business and
00:16:53
technology
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morning brew is a great way to do that
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morning brew makes the latest news fun
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and easy
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00:17:00
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all in one place without having to
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trundle through different news sources
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weekday and saturday
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click the link below to subscribe to
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00:17:17
intel would go on to be a massive player
00:17:19
in the 1980s but surprisingly
00:17:21
they weren't the leader by 1985 their
00:17:24
sales were slipping and they were
00:17:26
suffering huge losses and expensive
00:17:27
development costs
00:17:29
by this time motorola had caught up and
00:17:31
was making the best performing chips at
00:17:33
the time
00:17:34
the motorola 68000 chip proved popular
00:17:37
and was being used in graphical
00:17:38
computers like the mac
00:17:40
commodore amiga and atari st it would
00:17:43
take the intel 386 to change all of that
00:17:50
the 386 processors from intel
00:17:52
transformed the industry
00:17:54
in the mid-80s the chip manufacturing
00:17:57
industry convention was that when a
00:17:59
computer vendor purchased cpus
00:18:01
they would require a second source for
00:18:03
the chip a legacy business move from
00:18:05
military contractors who needed a
00:18:07
reliable supply
00:18:08
in effect for intel or anyone to sell
00:18:11
their chips
00:18:12
they would agree to enable a competitor
00:18:14
to license their technology
00:18:15
so surprisingly in the very early days
00:18:18
intel
00:18:19
actually helped set up other companies
00:18:21
like amd and fujitsu as secondary
00:18:23
sources for compatible chips
00:18:25
in fact amd began life as a secondary
00:18:28
source supplier for companies
00:18:30
using intel technology this all changed
00:18:33
with intel's 386
00:18:35
it was a very very risky move for the
00:18:37
company it took four years of
00:18:39
development and cost 100 million dollars
00:18:41
but intel decided not to license the
00:18:44
technology to competitors
00:18:46
ibm intel's biggest client at the time
00:18:48
wasn't interested in the 386 for this
00:18:50
reason
00:18:51
but compaq decided to go all in and
00:18:54
became the first computer company to use
00:18:55
the new processor
00:18:57
the early success of the compact 386 pc
00:19:00
played an important role in legitimizing
00:19:02
the pc clone industry and de-emphasizing
00:19:04
ibm's role within it
00:19:06
by this point ibm never again had a
00:19:10
leadership position in pcs
00:19:12
and for intel the rest was history
00:19:15
by 1992 intel had 83 percent of the cpu
00:19:19
market
00:19:20
and more than one billion dollars in
00:19:22
annual profit
00:19:24
in 1993 intel would unveil the pentium
00:19:27
one
00:19:27
at a speed of 60 megahertz it was a
00:19:29
decent performer
00:19:30
this was followed by the pentium pro in
00:19:32
1995 the pentium 2
00:19:34
in 1997. pentium 3 in 1999
00:19:38
and pentium 4 in 2000 each generation
00:19:41
was faster than the previous
00:19:43
with ever smaller but more numerous
00:19:45
transistors
00:19:47
these chips were insanely popular and
00:19:49
thanks to some heavy marketing
00:19:50
the name pentium became synonymous with
00:19:52
pcs in the 90s and early 2000s
00:19:55
for intel it seemed like having their
00:19:57
manufacturing and chip design
00:19:59
all in the one place was really paying
00:20:01
off but this vertical integration would
00:20:04
later come back to give them grave
00:20:05
problems
00:20:08
there was a brief challenge to intel by
00:20:10
amd in the late 90s
00:20:12
but by 2012 amd had lost 1 billion in
00:20:15
that year alone and they had a net loss
00:20:16
of 7 billion
00:20:18
in the past 15 years previous
00:20:21
it would take a new ceo by the name of
00:20:23
lisa to start turning it all around in
00:20:25
2014.
00:20:27
an mit graduate and semiconductor
00:20:29
industry veteran
00:20:30
she had to make some bold bets to unseat
00:20:33
intel and some of these bets
00:20:35
wouldn't begin to pay off for another
00:20:36
five years but for now
00:20:39
intel was still the undisputed king
00:20:43
today the microprocessor market is a
00:20:46
multi-billion dollar industry
00:20:48
intel is still currently the largest cpu
00:20:50
manufacturer on the planet
00:20:51
and despite falling behind technically
00:20:53
in the last few years
00:20:54
the impact that they've had in the
00:20:56
computing industry is undeniable
00:20:59
from a group of eight rebels who decided
00:21:01
to revolt against their leader in the
00:21:03
1960s and start one of the greatest
00:21:05
technology companies ever known
00:21:07
to a few of those members starting intel
00:21:09
and deciding to think differently when
00:21:11
it came to building chips for a japanese
00:21:13
client
00:21:13
to eventually end up changing the world
00:21:15
and impacting all of our lives
00:21:18
it's a fascinating story when you think
00:21:19
about it
00:21:23
as for ted hoff he would leave intel in
00:21:25
the early 1980s to accept a position
00:21:27
with atari as vice president of
00:21:29
technology
00:21:30
robert noyce would leave intel in the
00:21:32
late 70s gordon moore would theorize
00:21:34
moore's law
00:21:35
which still holds true today at 92 years
00:21:38
old he currently enjoys fishing
00:21:40
federico fagen currently leads
00:21:42
philanthropic efforts
00:21:44
to promote the study of physics
00:21:47
pussycom would suffer financial trouble
00:21:49
and go out of business in 1974.
00:21:53
in the next installment of this series
00:21:55
we'll see how intel got complacent
00:21:57
missed the boat on mobile processing and
00:21:59
is now under threat by amd
00:22:01
and apple as we round out the episode
00:22:05
i'd like to thank you for watching a
00:22:08
large part of this episode was based on
00:22:10
a little bit of my book new thinking
00:22:12
i'll leave a link for it in the
00:22:13
description below it's a fascinating
00:22:15
read on the last 100 years of technology
00:22:17
and how it all links together if you did
00:22:20
enjoy today's story
00:22:21
be sure to subscribe to cold fusion i
00:22:23
don't have a large budget or a team like
00:22:25
many channels here on youtube
00:22:27
it's just me and an editor that helps
00:22:29
out from time to time
00:22:31
anyway my name is dagogo and you've been
00:22:33
watching cold fusion
00:22:34
next time we'll take a look at toyota's
00:22:36
new solid state battery that's to be
00:22:38
revealed later this year
00:22:40
until then cheers guys have a good one
00:22:45
[Music]
00:22:48
cold fusion it's me thinking
00:22:56
[Music]
00:23:08
you
