Fairchild Semiconductor invented Silicon Valley — then its managers destroyed it

Fairchild Semiconductor was founded in 1957 by the 'Traitorous Eight' — eight engineers who left Shockley Semiconductor to start their own company. Backed by Sherman Fairchild, they set up in Mountain View, California, and within two years had invented the planar process and the first commercially practical integrated circuit. Fairchild became the founding company of Silicon Valley, and its technology formed the basis of the modern semiconductor industry.

The problem was that Fairchild was owned by Fairchild Camera and Instrument, an East Coast conglomerate. Its New York-based executives visited California once a year and treated the semiconductor division as a cash cow. President John Carter used the division's profits to buy unrelated businesses instead of reinvesting in the semiconductor business. When the company failed to promote Robert Noyce to the top job, he and Gordon Moore left to found Intel — triggering a talent exodus that became known as the 'Fairchildren'.

Over the following decades, former Fairchild employees founded or co-founded Intel, AMD, National Semiconductor, LSI Logic, and dozens more companies. By the late 1970s, Fairchild had lost its technological edge and was sold to Schlumberger in 1979 for $425 million. It was later sold to National Semiconductor, and eventually to ON Semiconductor in 2016. The company that invented Silicon Valley ended as a footnote in the industry it created.