Ch. 4: Liftoff (Chip War)

The launch of Sputnik by the Soviet Union in 1957 created a crisis of confidence in the US and resulted in a crash program to catch up with the Soviet’s rocket and missile programs. President John F. Kennedy declared that the US would send a man to the moon, leading to an increased demand for guidance computers for the Apollo spacecraft.

This provided an opportunity for companies like Fairchild and Texas Instruments, who saw the potential in integrated circuits, to provide their chips to NASA. Robert Noyce, the co-founder of Fairchild, discounted prices for customers besides NASA, while Pat Haggerty of Texas Instruments saw the potential for Kilby’s integrated circuit to be used in all military electronics and made a successful bet on selling chips to the military.

The Minuteman II contract transformed TI’s chip business, with shipments to the Air Force accounting for 60% of all chip sales by 1965. The success of the Apollo computer was largely due to Noyce’s chips and the endorsement from NASA, while the military contracts from the Pentagon transformed TI’s chip business. The question remained whether TI could mass-produce the chips to meet the demand.

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