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STEVE INSKEEP, HOST:

People in the tech world focus a lot on young entrepreneurs with fresh ideas, people like Mark Zuckerberg of Facebook or Jack Dorsey of Twitter. Today, in the final part of our series on the history of Silicon Valley, we're going to visit with some older leaders of that tech world. In a rare interview, two pioneers of Intel share their story with NPR's Laura Sydell.

LAURA SYDELL, BYLINE: As Andy Grove enters the room, a wide smile crosses his face when he sees Gordon Moore.

ANDY GROVE: Good to see you.

GORDON MOORE: Good to see you, too.

SYDELL: How often do you guys see each other?

GROVE: Once a year.

MOORE: Once a year.

(SOUNDBITE OF LAUGHTER)

SYDELL: The two men sit down beside each other in big, comfy chairs in the sunny offices of Moore's foundation in Palo Alto. Moore is the cofounder of Intel, the most profitable silicon chip maker in the world, and his foundation is a retirement project. Grove is the legendary former CEO of Intel and its first hire. Big windows overlook a landscape of office parks, where companies like Facebook got their start using technology these men helped make possible. Moore and Grove were a successful duo, but they're kind of an odd couple. Moore is a modest, introverted chemist.

MOORE: I'm a loner.

GROVE: That's true.

SYDELL: Grove, who is Jewish, survived Nazi occupation as a child and later fled Communist Hungary. He arrived in the U.S. in 1957. He has a reputation for being a savvy businessman with a wry sense of humor.

GROVE: I'm an older and creakier version of the same aggressive, young engineer that Gordon hired.

SYDELL: That's right. Gordon Moore first hired Andy Grove, first at a startup called Fairchild Semiconductor, right after Grove had finished his Ph.D. in chemical engineering. For five years, they worked together at Fairchild. In 1968, Moore and another key executive there, Robert Noyce, decided to leave and start their own company. Moore told Grove about it.

MOORE: And he said: I want to come, too. That was about the length of the conversation.

GROVE: I never got an offer. Or I should say, I never got an invitation.

SYDELL: You just said, oh, I'm leaving, too?

(SOUNDBITE OF LAUGHTER)

SYDELL: The company Moore and Noyce founded was Intel, and it wasn't the only company competing in the chip industry. In 1968, computers were being used by most major businesses for payroll, accounting and banking.

MOORE: You know, we got to the point where electronics were going into almost all consumer items. And so we had the feeling that this was the basic technology, and some kind of a revolution.

SYDELL: Moore saw an opportunity for Intel in a relatively new area: putting computer memory or data storage on microchips. These chips would allow computers to be faster. In 1970, Andy Grove and Gordon Moore led Intel when it came out with the industry's first mega hit: low-cost memory on a chip. But developing that chip was tough. Grove puts head in his hands when he thinks back to all the experiments.

GROVE: Every pestilence that could kill a microchip hit it. We had no idea what we were doing. Key people standing around and testing all the chips on a wafer: green light is good, red light is bad. Red, red, red. And we were a schlocky little outfit of 50 people.

SYDELL: I mean, how long did it take to sort of work through all this?

GROVE: Two years. It seemed like 20.

SYDELL: For many years that followed, Intel dominated the memory business. When the Japanese started making memory chips cheaper and better, few companies could compete. A lot of American memory chip companies went under. In 1985, that could have been Intel's fate.

GROVE: The story was we were sitting around in my cubicle, looking out the window, very sad. And I asked Gordon: You know, what would happen if somebody took us over, got rid of us? What would the new guy do? To which Gordon said...

MOORE: Get out of the memory business.

GROVE: Get rid of us, and get out of the memory business.

SYDELL: What Grove did next was radical. He changed Intel's direction completely. He closed the company's memory business, laid off 7,000 employees - almost a third of its workforce. He said it was agonizing to shut down plants.

GROVE: We like to go to places where we'd be the only manufacturer. And when we pulled out, we left a hole.

SYDELL: Intel decided to beef up something that had been a side business. The company was also the inventor of the industry's first successful microprocessor. In the '70s, these could be found controlling elevators, traffic lights, garage door openers and office printers. Microprocessors are the brains of a computer. These chips process everything from computation to multimedia displays on one chip. Intel went from making computers faster to making them smarter and cheaper. Ironically, Gordon Moore and Andy Grove, like many others, didn't see that their biggest customer coming.

GROVE: We were exposed to Apple's early products, and I could not imagine anything except trivial applications.

SYDELL: Such as?

GROVE: To keep your recipes in the kitchen.

MOORE: That's right, yeah. I had exactly the same feeling about it.

SYDELL: Yet the eventual rise of the personal computer fueled Intel's success. In the 1980s, then-CEO Andy Grove made some smart moves. There have been books and business school talks about Intel's twists and turns, but Grove's key move was his refusal to license Intel's new cutting-edge microprocessor. Intel would be its sole manufacturer.

The company's success is the reason Andy Grove was Time's Man of the Year in 1997. But not all the talk about Intel has been good. The chip maker has been the target of several antitrust suits. Intel's been forced to pay large settlements and fines and change some of its business practices, though Intel has not admitted any wrongdoing. What Grove emphasizes is that they were trying to create products of value and a company that would last. Today, Grove thinks a lot of Silicon Valley is all quick profits. There are two words he hears that make him cringe.

GROVE: Exit strategy. I hate it.

SYDELL: Grove says too many young techies and venture capitalists want to sell their companies or go public, get rich and get out.

GROVE: And I really don't have much respect for the people live their lives motivated by an exit strategy existing and being performed. There was no option that we were trained in, if it gets too hard, get up and leave.

SYDELL: You didn't have that option. You were running a company that was losing money. You found a way to fix it.

GROVE: And that for 10 years.

SYDELL: Nowadays, both Grove and Moore look around at the Silicon Valley they were very much a part of creating and lament that the devices designed here are not manufactured in the U.S. And they can talk: Intel does about three-quarters of its manufacturing here. Moore and Grove say they feel their biggest accomplishment is that in a fast-moving, competitive industry, their company has survived.

MOORE: There have been 50 other startups, more or less, in the semiconductor industry. We're about the only ones still around.

SYDELL: Laura Sydell, NPR News, San Francisco.

INSKEEP: There's more of the conversation with Gordon Moore and Andy Grove at npr.org, where you can also hear the rest of Laura's series on Silicon Valley.

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