1974 - 1980: Bootstrapping a New Industry

Intel and Motorola'south virtual duopoly comes to an sharp stop

Like its predecessor the 8008, Intel's 8080 suffered from initial delays in evolution merely would later be recognized as one of the nigh influential chips in history. Company direction focused on the high profit memory business concern, particularly consummate memory systems that were compatible with the lucrative mainframe market.

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The 8080 launched in April 1974. While initial development had been delayed, Intel's chief competitor, Motorola's 6800, also had its share of bug adapting the flake and northward-MOS procedure to a single 5-volt input (the 8080 required iii split voltage inputs), delaying its introduction well-nigh seven months. Without a directly competitor, Intel had a new market mostly to itself, information technology just needed to find customers with enough imagination to see the possibilities.Initial development of the 8080 didn't start until mid-1972, some six months afterwards Federico Faggin began lobbying Intel'due south management for its development. By this fourth dimension, the potential microprocessor markets had started to present themselves. The prevailing attitude upwardly until at present had centered on the microprocessor having to co-exist with or otherwise usurp the more powerful mainframe and minicomputer. Computers were yet seen equally an expensive business concern and research tool, and the markets for a new generation of relatively inexpensive personal machines and industrial controllers didn't be, nor was it imagined in many cases.


Ted Hoff shows the Intel 8080 processor.

The remaining parts of the puzzle, an operating system and consumer-friendly packaging, were likewise taking their showtime steps. Intel hired Gary Kildall, a Ph.D. in compiler design who taught at the U.South. Navy'southward Postgraduate School, to write software that would emulate a (nevertheless to exist built) 8080 system on a DEC PDP-10 minicomputer. The software, Interp/eighty, would be complemented by a high-level language mirroring XPL (in apply for mainframes at the time) called PL/M.

Kildall accelerated the process past cobbling together a arrangement from an Intellec-eight development kit and a donated floppy drive, which alleviated reanimation from lengthy delays associated with the teletype method of data input-output on the December time-shared minicomputer. The resulting lawmaking from the Intellec-8 organisation would become CP/M (Control Program for Microcomputers), the ascendant operating arrangement for the side by side seven years until the widespread use of MS-DOS. Past the fourth dimension MS-DOS debuted, 500,000 computers had shipped with the CP/M operating organisation, and it could have been many times more had history played out a little differently.

Kildall offered CP/M to Intel for $twenty,000 and the visitor declined the offer. It wasn't interested in an operating system that ran from disc nor any non-business related software in general. CP/One thousand sales were initially limited to a couple users: Omron Corporation of Japan and Lawrence Livermore Labs. Kildall'southward third client, IMSAI, would propel CP/G to pre-eminence amidst personal estimator operating systems for the next 7 years.

As Intel's 8080 began quantity production, MITS capitalized on the involvement shown in Jonathan Titus' Mark-8 "source and build it yourself" kit with its own Altair 8800, designed exclusively for the hobbyist and the new wave of computing field college students.

As Intel'due south 8080 began quantity product, Ed Roberts, owner of a small visitor called Micro Instrumentation and Telemetry Systems, or MITS, which originally catered to amateur (ham) radio and model rocketry enthusiasts, looked toward the budding hobbyist computer motion for his company's continued survival.

MITS' latest venture, a bones figurer kit, had started production no sooner than Texas Instruments launching its own range of cheaper and more than sophisticated models that killed off many smaller companies. Roberts looked quickly into the feasibility of capitalizing on the interest shown in Jonathan Titus' Mark-8 "source and build it yourself" kit, which had recently gained wide recognition among electronics aficionados.

Roberts was able to secure supply of the 8080 for $75 a processor (Intel's list price was $360, every bit was Motorola's 6800) and synthetic the Altair 8800 to use sourced component boards plugged into a common back pane that MITS designed. Very crude when judged by whatever consumer electronics standard, it was designed exclusively for the hobbyist and the new moving ridge of calculating field college students.

As noted, Intel's 8008 processor provided the impetus for Jonathan Titus to build his own computer. The resulting Mark-8 was featured in the July 1974 consequence of Radio-Electronics Mag in an article with assembly instructions and a listing of parts manufacturers since the components had to be sourced past hobbyists. Non to be outdone, Popular Electronics would feature the Altair 8800 in its January 1975 outcome.

Ed Roberts had expected that a few hundred hobbyists would purchase his estimator. The reality was that the magazine article led to around a grand orders, which grew to 5,000 in six months, and ten,000 by December 1976. This wasn't quite the windfall for MITS that it might appear.

The basic price of the system was kept depression to encourage sales, with profit loaded against expensive hardware expansion options. This approach was modelled upon what had served IBM well, at least until cadre retention prices tumbled and Intel began selling IBM Organisation/360 compatible DRAM memory systems. The same effect befell MITS as hobbyists began offering cheaper (and often more than reliable) alternatives to MITS'southward own range, get-go with Homebrew Figurer Social club fellow member Robert Marsh'due south Altair compatible iv-kilobyte static RAM module.

The Popular Electronics article fabricated an firsthand impression on Bill Gates and Paul Allen, who approached MITS immediately regarding writing a custom Bones program for the auto. Gates, Allen, and Monte Davidoff, who would write the floating point routines, had what would become Altair Basic set up for demonstration in February.

The first computer language written expressly for a personal computer began aircraft with the Altair (or expansion options for the machine) at $75 a copy or $500 equally standalone retail software. Bootleg copies surfaced almost immediately, leading to Bill Gates' (in)famous "Open Letter to Hobbyists" in January 1976. Bill Gates made 'Micro-Soft' in his own paradigm -- unashamed to exist a business when virtually of the era belonged to the enthusiast entrepreneur.

Altair BASIC, the start computer linguistic communication written expressly for a personal computer, began aircraft with the Altair at $75 a copy or $500 as standalone retail software.

The Altair Basic dial tape copying ushered in a standing tradition of new software being quickly made available by piracy, followed past the software vendor claiming exorbitant losses. Bill Gates and Paul Allen'southward Micro-Soft, would keep to tailor BASIC to the needs of Amiga and Commodore, Radio Shack, Atari, IBM, NEC, Apple tree and a host of specific systems.

The Altair 8800 proved a resounding success, not least because it had no existent competition when information technology became available. IMS Associates quickly cloned the Altair as the IMSAI 8080, albeit using a derivative of the CP/M operating system rather than BASIC.

Within a year of its release, IMSAI was fast eroding the Altair's sales with 17% of the personal calculator market versus the latter'southward 22%. Processor Engineering's newly launched SOL-10 and SOL-twenty systems (also Intel 8080-based) would account for a further eight% of the market as would Southwest Technical Products' 6800 (Motorola 6800-based).

Beak Gates and Paul Allen'south Micro-Soft, would proceed to tailor BASIC to the needs of Amiga and Commodore, Radio Shack, Atari, IBM, NEC, Apple and a host of specific systems.

Fourth dimension to marketplace with a finished blueprint and a fairly smooth manufacturing ramp assured Intel of high visibility even if its 8080 was likely inferior to Motorola's 6800. Motorola and Intel were for the most office pitching the 8080 and 6800 to industrial and business organisation interests.

At this time, the amusement aspect of microprocessor-based computers had non been realized. Domicile consoles like the Magnavox Odyssey and its spiritual predecessor, Atari's Pong arcade game, weren't part of the greater public consciousness, so Intel and Motorola looked to industrial and business last machine applications with their lucrative add-on and back up contracts. The following year would begin to show what kind of potential lay in entertainment-based computing.

1977 proved a watershed year in the manufacture every bit Motorola's and Intel'south virtual duopoly in personal computing came to an abrupt terminate. The processor teams of both vendors splintered and reorganized themselves. A faction within Motorola'south design team led by Chuck Peddle lobbied Motorola to produce a cheaper 6800. Existence priced at $300-$360 express the applications it could exist used for and Peddle saw opportunities in a cheaper alternative for entry-level computing and low-cost industrial applications.

Chuck Peddle, Nib Mensch, and five fellow engineers left Tom Bennett'southward Motorola 6800 design squad and set up shop at MOS Technology, some other chip company that had been severely mauled in the computer cost war initiated past Texas Instruments. They gear up virtually building their vision of a streamlined, reduced toll 6800 and announced the MC6500 series 11 months after the 6800's launch. At $25, the 6502 not only undercut the 6800 (and 8080/8085), it also provided better yields than Motorola's product thanks to a less exacting manufacturing process.

Federico Faggin, chief architect of the 8080, had also parted ways with Intel shortly after the bit was finalized. Faggin was increasingly frustrated with Andy Grove's micro-management of the company and he was livid that Intel projection chief Les Vadász had filed (and received credit for) a patent on Faggin's invention of the buried contact, a vital stride in the product of MOSFET transistors. It didn't assistance that Intel saw the microprocessor as niggling more than a component of a bundle which could be leveraged to sell more memory products.

1977 proved a watershed year in the industry as Motorola'southward and Intel's virtual duopoly came to an precipitous terminate.

Faggin and fellow Intel engineer Ralph Ungermann left in late 1974 to pursue their own vision with the founding of Zilog, a company named by Ungermann (Zilog beingness an acronym of sorts with "Z" beingness the concluding word in integrated logic). The company was quickly approached past Exxon, the earth's largest oil company, with an investment offer.

For a 51% stake in the company, Exxon would pay $1.5 million. The two men quickly set about implementing improvements to the 8080 design and offered the redesigned bit to Intel as sub-contractor. Intel refused, believing that going into concern with ex-employees would deed as an incentive for other engineers to follow Faggin'south lead.


Zilog'south Z80 was called to power the Tandy (Radio Shack) TRS 80. (Photo: Maximum PC)

Zilog's first chip, the Z80, was designed in an phenomenal 9 months by only iii principle engineers (Faggin, Ungermann, and Masatoshi Shima who had joined from Intel), a couple of evolution and systems engineers, and a small number of graphics artists for fleck lithography layout. The design was consummate by Dec 1975 and fabricated by Mostek, a recent commencement-up formed by Texas Instruments employees that would rival Intel in the early days of integrated excursion production and eclipse information technology in DRAM production.

Like the MOS Tech 6502, the Z80 was simpler to implement into a organisation than the Intel 8080 and cheaper than both the 8080, its 8085 follow up, and the Motorola 6800. This simplicity and lower cost led to the Z80 being chosen to power the Tandy (Radio Shack) TRS 80, whilst the 6502 began a long association with the hugely popular Commodore company (who would soon acquire MOS Technology) with the PET 2001 model.


A MOS 6502 processor. The 4-digit date code indicates it was made in the 37th week of 1984. (HWHunpage)

The MOS 6502 would also find a home in the Apple tree line of computers, another influential package. A passionate electronics enthusiast and a member of the Homebrew Figurer Club, Steve Wozniak had urged his employer Hewlett-Packard to pursue development of a personal estimator system. The archetypal hobbyist-hacker assembled the get-go Apple I mainboard in just a couple of months of spare time, nevertheless Apple'southward company persona was to distinguish itself from the image of the hobbyist kit-edifice machines of the day. Wozniak would be the catalyst for Apple Computer's being while Steve Jobs would mould the visitor, defining its strategy and epitome.


Steve Jobs and Steve Wozniak piece of work on the original Apple I, powered by the MOS 6502 processor. While however technically a kit, since the buyer had to source an enclosure and peripherals, the mainboard was sold fully assembled.

If Steve Wozniak liked building computers, so Steve Jobs absolutely loved the thought of selling them. Lacking the technical electronics skill and inspiration of Wozniak, he possessed a smashing business organisation sense and saw opportunity in the new electronics market. Partnering with Wozniak (who he met equally a swain employee at Hewlett-Packard) and Ronald Wayne (who would get out Apple a few weeks subsequently), the team gear up virtually building 200 Apple I computers in the garage of Jobs' parents with the help of a couple high school-aged assistants. All but 25 machines were sold in 10 months from the July 1976 introduction. While nevertheless technically a kit, since the buyer had to source an enclosure and peripherals, the mainboard was sold fully assembled.

Computer companies of the day were defined by engineers and their prowess. The public face of well-nigh companies reflected that they dealt with other companies or governmental engineers. Style had very lilliputian to do with the state of computer sales in the early to mid-1970s and was often frowned upon as needlessly frivolous. Steve Jobs made way a major selling point for Apple Computer, from the multi-hued Apple logo to ad aimed at professionals in business organization, arts and sciences.

Steve Jobs envisaged Apple tree supplying the whole parcel: sales, support, software, and peripherals, making the experience every bit seamless and professional person as possible.

He also recognised that many of the computer companies of the day lacked a full infrastructure. More than a few required mail order purchase or were available through select concatenation stores but not stores dedicated to the machines. Virtually users had to be artistic in sourcing (or writing) software, and troubleshooting problems with the hardware. Steve Jobs envisaged Apple supplying the whole package: sales, support, software, and peripherals, making the user'southward experience as seamless and professional every bit possible.

The Apple I proved to be a valuable proof of concept, but to take the next step the visitor needed majuscule. Wozniak and Jobs were introduced to A.C. "Mike" Markkula, a friend of Robert Noyce who had recently been fired from his marketing position at Intel on Andy Grove's instruction. Markkula supplied $91,000 of his own money and secured a $250,000 line of credit in exchange for a third of the visitor.

Wozniak turned his attentions toward refining his pattern into the Apple II, which became the world's outset financially successful personal computer. Once again utilizing MOS Tech'southward 6502 processor, the Apple Ii attained a much wider audition in office due to Wozniak's insistence of including multiple expansion slots in the Apple II's design over Steve Jobs objections.

The eight slots offered the option of using co-processors -- expansion boards kickoff with the SoftCard in March 1980 which supplied the Zilog Z80 and a re-create of Microsoft's Disk Basic for $349. Like options followed for the Motorola MC6809 (Os-9), Intel 8088 (CP/K-86 and MS-DOS) and subsequently, the Motorola 68008.

The expansion slots also allowed a broad range of connectivity and customization, from floppy disks to sound cards, series controllers, drives, and additional memory. This range of options gave the Apple tree Two an unrivalled advantage in the business sector where the personal computer was just gaining traction as a viable alternative to a time-shared mainframe or minicomputer. The level of customization also provided many people with their first feel or at least their first sight of a personal computer as schools, medical and enquiry facilities, government, and business all gravitated to the machine.


Apple 2 populated with some mutual expansion boards. From left to correct: 16 kByte RAM "language card" expansion, 80 column lath, Z80 board and dual floppy controller board. (The HP 9845 Project)

Of the 48,000 personal computers were sold worldwide in 1977, the Apple tree 2 was easily the most recognizable and coveted cheers to extensive marketing that overshadowed more than established brands from Vector, Ontel, Polymorphic, Heathkit, IMSAI, MITS, and Cromemco.

The Apple II attained a much wider audience in part due to Wozniak's insistence of including multiple expansion slots in the Apple tree II'southward design over Steve Jobs objections.

The financial success of the Apple II and its quick acme into the public consciousness wasn't lost on the established powerhouses in the semiconductor world. In one case the Apple tree became established as a brand and the all-of import software range increased, smaller companies were eager to ride Apple's coattails -- notably the Franklin Computer Corporation, whose blatant cloning of the Apple II nether the ACE production line kept courtrooms occupied for some years.

Other companies would expect to emulate only not outright copy Apple every bit the number of personal computers sold in 1978 jumped to 200,000, representing half a billion dollars in sales. Of that total, Apple tree Ii sales deemed for $30 1000000 from merely 20,000 units sold compared to Tandy's TRS 80, which required the auction of 100,000 units to generate $105 million, and Commodore'due south PET 2001, which striking $20 meg in sales from 25,000 computers shipped.

A large part of Apple's success in the business marketplace -- a market place non originally foreseen as being the Apple II's primary focus -- stemmed from the close association with the hugely influential VisiCalc spreadsheet software that was only initially uniform with the Apple tree machine. VisiCalc's entreatment across the entire business organisation spectrum was such that it solitary justified the buy of the computers needed to run it.

For consumers, the adjacent few years by and large brought incremental advances in engineering every bit the infrastructure required for the industry strengthened. The eight-bit microprocessor grew in ubiquity every bit processors, support and memory chips became cheaper to the point where they were a commodity product turning up in a multifariousness of low cost applications. With the expanding range of personal computers came the drench of software that sustained further hardware sales.

Before the revolution of 8-scrap machines came into stride, a worldwide recession arrived and the semiconductor concern suffered a downturn in sales and average selling prices in 1974. Larger companies weathered the lean year relatively unscathed only smaller companies just finding their footing in the business organization suffered, resulting in a vast number of reorganizations, buyouts and new partnerships.

Ane visitor seriously affected was AMD. As mainly a second source for chips rapidly approaching commodity pricing, the twelvemonth saw AMD's stock price autumn to $1.50 per share -- a tenth of its initial public offering price with threat of Intel suing for IP infringement over its line of EPROM chips. AMD desperately needed a microprocessor to sell for its continued being and to forestall a lawsuit it was sure to lose.

For its part, Intel desired AMD'south newly designed floating signal unit (FPU) chip, a math co-processor that could act in concert with the microprocessor to summate arithmetics functions. This FPU also tied into a larger film of market authority as Intel was locked in a iv manner marketing battle with Zilog, Motorola, and MOS Tech. Having AMD as a 2d source for the 8085 and its successors gave Intel's design a greater market penetration, and just every bit importantly, AMD wouldn't be selling whatever of Intel's competitors' processors.


AMD became an authorized second-source of Intel 8085 microprocessors. (Photograph: CryptoMuseum)

An agreement was reached later a few months of posturing and bargaining from both sides. Intel would receive royalties and penalty payments from AMD for the designs they were already selling and access to licensing AMD designs on a instance past instance basis. AMD would receive a license for the 8085 including full access to the proper noun, manufacturing masks, and the right to market place the AMD chip as fully "Intel compatible".

To seal the deal, AMD was offered Intel microcode, as it was made clear to AMD representatives that time to come designs would probably include microprogramming. Non particularly relevant at the time, this clause in the contract was to have major ramifications within a few years. AMD'due south continued survival now looked a lot brighter and was fully bodacious the following twelvemonth with a joint venture with Siemens after the German company had failed in a bid to larn Intel in an endeavor to bridge the growing gulf between U.Due south. and European IC prowess.

From the consumer's point of view, the personal computer landscape remained rather static as the vendors tentatively embellished their product line-ups. 8-flake calculating became widespread as software applications compatible with the first wave of machines hindered xvi-scrap uptake. Past the fourth dimension the first mainstream sixteen-fleck processors were ready for widespread auction, available software applications for 8-bit machines numbered over 5,000 for use with the CP/M operating arrangement, with a farther 3,000 tailored for the Apple II.

After a cantankerous-licencing deal with Intel, AMD's continued survival now looked a lot brighter and was fully assured the following year with a joint venture with Siemens.

Every bit the microprocessor continued its refinement and grew in complexity, the back up structure likewise blossomed. Memory density increased as procedure improvements immune for higher transistor counts, while floppy disk and hard drive density and refinement followed adapt. Many aspects of modern personal computing we now accept for granted had been in evolution first by SRI International'due south Augmentation Inquiry Center (ARC) under the stewardship of Douglas Engelbart, and later Xerox's Palo Alto Research Center (PARC).

Engelbart's work with the development of bitmapping led directly to the modern interactive graphics user interface (GUI) as we know it. Displaying information visually prior to this usually meant that merely the last line of data on a screen was "active". The beginning of a new line consigned the previous one to permanent (or semi-permanent if using a line editor at a after juncture) storage, which was little removed from input by a sequence of punch cards.

Engelbart's approach was to brand the whole screen interactive. With this came a demand for pointer navigation effectually the screenspace, and the mouse was adult to attain this. These technologies, as well every bit copy and paste, hypermedia (including hypertext), screen windows, real-time editing, video conferencing, and dynamic file linking were all showcased in the "Female parent of All Demos" on December nine, 1968.

PARC refined and expanded on Engelbart's piece of work. A company built on paper, Xerox realized it was apace existence marginalized by the computer and could imagine a future part being paperless. The visitor gear up PARC to enquiry possible alternatives to Xerox'south main business concern should it begin to suffer.

The Reckoner Scientific discipline Laboratory (CSL) at PARC was under the acute leadership of Bob Taylor, who had risen in stature as a director at ARPA (now DARPA) and was instrumental in the creation of the ARPANET, forerunner of the modern internet. The CSL was primarily a pure (or basic) enquiry plan, which is to say information technology researched for the sake of a greater understanding rather than research and development with the terminate goal being a marketable product.

In the first few years following its creation in 1970, PARC amassed a biggy listing of achievements: refinement of the GUI (something that would make a lasting impression on a young Steve Jobs when he visited PARC), the invention of the laser printer, and the creation of the world's first workstation computer, the Alto.

Often remembered as an expensive failure, the Alto was ordinarily viewed as being over-engineered. However, given the workloads it was designed for, the level of features information technology had, its programming linguistic communication and a raw component cost that topped $ten,000 per car in 1973, the Alto represents an analogue of the expensive workstations used today. The infrastructure associated with the system and its probable $25,000 to 30,000 retail toll tag put it far beyond whatsoever reasonable expectation of a home user if it were intended for commercial release.


The Xerox Alto was the start desktop computer with a graphical user interface, among many other innovations.

The Alto combined PARC'south research into a single machine. These machines were also networked within PARC, one per researcher, and to the newly developed laser printers. 1 by-product of this networking was that the Alto'south and printers (which incorporated their ain terminals) became so fast that the connections betwixt them were the limiting factor in workload throughput. PARC's solution was to invent and develop Ethernet to connect the system thereby developing the starting time high-speed computer network.

A 600 dpi page could now be transmitted across the two.67 mbps network in a blistering twelve seconds from the previous xv minute requirement. Not content with this speedup, PARC'due south scientists immediately set almost trying to adapt Ethernet to carry 10 mbps -- far across whatever reasonable data traffic expectation for the near time to come.

Many products from this creative free-for-all didn't benefit home users for years to come up and benefitted the company less than they should have due to Xerox management existence firmly entrenched in the copier business concern with little agreement or unified vision of the electronics revolution underway. While Xerox built the Alto as an in-house project and began development of the follow-on Xerox Star at $16,000 per bare motorcar, Tandy would exist selling x,000 TRS-80s or more than a month for $599 each. Even the more substantial Commodore PET could be had for $i,298.

Towards the end of 1978 Apple, Radio Shack, and Commodore would have a new competitor when Atari announced its 400 and 800 models. While the new systems wouldn't start shipping until October the following year, Atari already had a sizeable presence in home entertainment market with its pop Atari 2600 console.

The gaming potential of the personal calculator was about to exist realized equally companies such as Avalon Hill (Planet Miners, Nukewar, North Atlantic Convoy Raider) and Automated Simulations (Starfleet Orion) prepared a range of games for the new marketplace that grew aslope the proliferation of arcade and panel-based gaming in the belatedly 1970s. Bruce Artwick'south Flight Simulator would become the commencement example of the concerted strategy to differentiate PC gaming from panel gaming when Microsoft licensed the game to showcase IBM PC and MS-DOS.

The gaming potential of the personal computer was about to be realized as companies such equally Avalon Hill and Automated Simulations prepared a range of games. Bruce Artwick'due south Flight Simulator would become the first example of the concerted strategy to differentiate PC gaming from console gaming.

The microprocessor industry and personal calculating in particular was growing steadily, if not spectacularly, leading into the 1980s. The seeds sown well-nigh twenty years before blossomed at the plough of the new decade as the manufacture reached a major point of inflection.

The primary focus of semiconductor companies (almost entirely U.S. derived) remained on high turn a profit DRAM circuits. The microprocessor was generally seen equally part of a range of fries that could exist sold as a multi-bit package. Intel, and more recently Mostek, were built on the profits of dynamic retentivity. That inverse as Japanese semiconductor companies with little regard for U.Southward. patents and copyrights received generous tax breaks, low interest loans, and institutionalized protectionism from a government desperately trying to keep the Japanese computer manufacture from falling into the abyss.

IBM'southward growth in Nihon had resulted in the Japanese government forming the Japan Electronic Computer Company (JECC) in 1961 to buy Japanese electronics at generous prices to keep the local industry afloat. JECC wasn't a company as such, only an umbrella corporation that organized independent Japanese companies to minimize contest and maximize individual market options.

IBM's System/360 and 370 mainframe leasing concern caused farther bug for home-grown Japanese competition in the mid-1960s. Local companies had neither the expertise nor the infrastructure to cope with Large Blue. In response, the Japanese government restructured the manufacture, including allocating markets to private companies or combines, likewise as limiting U.S. visitor growth and opportunity in Japan. These companies as well controlled the entire supply chain from manufacturing to sales in their called market segment to assistance in efficiency and increase opportunities in time-to-market.

Need for new integrated circuits, specially in the U.S., had been growing at an boilerplate of 16% a year through the mid to late 1970s and Japan's government forth with electronics companies saw ICs and particularly the lucrative DRAM market every bit an ideal opportunity to build their industry. Backed by $1.6 billion in government subsidies, tax credits, and low involvement loans as well every bit big individual investments, Japanese companies embarked on building state of the art foundries for IC manufacturing. These aforementioned Japanese companies too needed increased imports of U.S. fabricated DRAM for their consumer and business products while their own plants were being built.

U.South. companies expanded their manufacturing base to cope with larger exports and were left with massive overcapacity once the Japanese chips from Hitachi, NEC, Fujitsu, and Toshiba arrived. The effect was a 90% autumn in DRAM prices inside i year and by March 1982 a 64K DRAM chip that had sold for $100 in 1980 was at present $5. The U.S. retention business lay in ruin.


The Intel 8088 would go on to ability the IBM PC and plow the platform into an industry standard. (Grinnell College)

For Intel, its primary business ceased existence memory-based but as its 8-bit/16-fleck 8086 and 16-scrap 8088 processors reached production. The time to come was now the microprocessor and microcontroller. Equally luck would have it, IBM had also noted the rise of the personal computer industry and while the new opportunity wasn't compelling enough to divert the company from its core business, information technology did represent a market ripe for profit and a new customer base. An unlikely partnership was about to modify the example of personal calculating.

This article is the second installment on a series of five. If yous enjoyed this, read on as we dive into the defining arrival of the IBM PC 5150 and Intel's eventual cementing of the x86 platform as the industry standard. If you lot feel similar reading more almost the history of computing, check out our feature on iconic PC hardware.