Fairchild Semiconductor
The 1957 startup founded by eight defectors from Shockley's lab that invented the mass-produced chip and seeded Silicon Valley's entire family tree.
Almost every important semiconductor company on earth can trace its lineage to a single startup founded on the San Francisco Peninsula in 1957 by eight young men who quit their boss on the same day. The boss was William Shockley, co-inventor of the transistor and freshly minted Nobel laureate, who had come home to the Bay Area to start a company and hire the brightest physicists he could find. He hired brilliantly and managed atrociously: paranoid, abusive, and prone to posting employees' salaries on the wall and ordering lie-detector tests. Eight of his best researchers, including Robert Noyce and Gordon Moore, decided they would rather build a company than endure him. Shockley called them the traitorous eight. The name stuck as a badge of honor.
The deal that started an industry
The eight had the talent but no money, so an investment banker named Arthur Rock shopped their idea around. The backer he found was Sherman Fairchild, an inventor and heir whose Fairchild Camera and Instrument put up roughly $1.4 million for a new division, Fairchild Semiconductor, formed in the autumn of 1957. It was a spectacular bet. Within a few years Fairchild had made two of the decade's key breakthroughs: Jean Hoerni's planar process, which let transistors be built on a flat, protected silicon surface, and Noyce's integrated circuit, which used that flat surface to wire many components into one mass-producible chip. Fairchild's Micrologic chips helped guide Apollo to the Moon and turned the integrated circuit from a laboratory curiosity into a product.
The Fairchildren
Fairchild's deepest legacy was not a device but a habit. Its engineers kept leaving to start their own firms, and those firms kept spawning more, until the industry was populated by companies its alumni called the Fairchildren. In 1968 Noyce and Moore themselves walked out to found Intel. Others launched Advanced Micro Devices, National Semiconductor, and dozens more. Eugene Kleiner, one of the original eight, co-founded the venture-capital firm Kleiner Perkins, which would go on to fund Amazon, Google, and hundreds of other companies. By one count, a large majority of Silicon Valley's semiconductor firms descend directly or indirectly from that single 1957 startup.
The template for tech itself
Fairchild also invented the culture that the technology industry still runs on: talented employees leaving to launch competitors, funded by venture capital and rewarded with stock options, in a region where switching jobs is a virtue rather than a betrayal. That churn, which would have looked like disloyalty almost anywhere else, is precisely what let ideas and people recombine fast enough to build an entire economy. Fairchild the company faded, passed through corporate owners, and was eventually absorbed. But the pattern it set, brilliant people defecting to build the next thing, is the reason Silicon Valley became Silicon Valley, and it began with eight resignations on a single day.