The 10 most influential executives

"The very stability of existing companies such as AT&T, IBM and to some extent Motorola and Texas Instruments, kept New York, New Jersey, Dallas and Phoenix from becoming the major center of electronics. In Silicon Valley, they were all young engineers. I don't think the corporate structure back east would have given kids so much responsibility."

In alphabetical order, here are 10 kids who grew up, ran companies well and have had lasting influence on the industry.

Morris Chang created the silicon foundry business, freeing semiconductor startups from the financial burden of building fabs. When Chang founded Taiwan Semiconductor Manufacturing Company (TSMC), in 1986, to make chips under contract, it gave startups an affordable manufacturing strategy when fab costs were skyrocketing. Chip companies could save money and focus on creating intellectual property (IP) and designing chips.

In 1999 Chang told EB, "The barrier to entry was too high, because starting a semiconductor company meant building a fab. If there was anything that could help reduce this barrier, a lot of people would start their own companies."

Morris Chang (photo courtesy of Taiwan Semiconductor Mfg. Co. Ltd.)

Soon after the launch of TSMC, other entrepreneurs in Taiwan and Korea followed suit. Like Chang, they often had government funding. TSMC became the flagship of Taiwan's electronics-based economy. It is hard to exaggerate the impact of foundries on chip innovation. To cite just two examples that grew into fabless giants: Qualcomm, in wireless communications, and Nvidia, in graphics processing.

Born in China, young Chang and his family moved often to avoid the Japanese during the war. After high school, he emigrated to the United States, where he earned degrees in mechanical engineering from MIT. In 1958 he went to work at Texas Instruments, where he rose to executive vice president of global chip operations, earning his doctorate in electrical engineering on a sabbatical. The Taiwan government lured him to serve as director of its top research lab in the 1980s, and from there he spun off TSMC.

A published author and poet, Chang, at 74, continues to run TSMC. He is likely to be remembered as the chip entrepreneur's best friend.

Aart De Geus led the team that created synthesis, a leap forward in EDA that saved chip designers time and money. Synthesis automates reading a high-level electronic design description and implements it at a lower level of abstraction—work that used to be hand-cranked.

De Geus did much of the development work at General Electric and as part of his doctoral dissertation for Southern Methodist University. When GE decided to exit the semiconductor business, in 1986, De Geus convinced GE to fund a spin-off. He moved his team from North Carolina to Silicon Valley and founded Synopsys, which produced the first commercial design compiler.

Aart de Geus

The design compiler is still its leading product, but Synopsys, through innovation and acquisition under CEO De Geus, grew into a billion-dollar EDA enterprise, assuring that there would be two large companies offering a complete set of design flow tools, the other being Cadence Design Systems.

De Geus, at 51 the youngest on our list, is an elder statesman in EDA circles. For all his influence so far, his biggest challenge lies ahead. With billion-gate designs becoming common, EDA must still deliver tools that greatly improve designer productivity.

Born in Holland, De Geus was reared and educated in Switzerland before coming to the U.S. for graduate school. He is an accomplished blues musician and a student of the psychological theories of Carl Jung. In 2002 he told EB that he agreed with Jung that "the best ideas come from the unconscious."

Let's hope his unconscious is working overtime to solve the design productivity problem.

Irwin Mark Jacobs: Digital Wireless

Irwin Mark Jacobs developed code division multiple access (CDMA) technology, which uses the radio spectrum for digital wireless more efficiently than other technologies. Facing great opposition, Jacobs labored for 30 years to convince the world that CDMA theory worked in practice. His influence has become evident only in the past five years, as wireless carriers scramble to upgrade to CDMA and its capacity to deliver next-generation wireless applications.

Jacobs was 51 when he founded Qualcomm, in 1985, after teaching at the University of California at San Diego and working as a consultant and entrepreneur in satellite communications. He won many standards battles, but Qualcomm had to build a CDMA phone system in San Diego to prove that it worked. It sells chip sets and collects royalties from nearly 3,000 patents, many of them held by Jacobs.

Irwin Mark Jacobs

Jacobs grew up in New Bedford, Mass., where a pre-Sputnik high school counselor gave bad advice: There's no future in science and engineering. He went to Cornell University as a hotel administration major. In his second year, he switched to electrical engineering. He got his doctorate at MIT, where he taught briefly before taking the job in San Diego.

Jacobs, 72, handed the CEO reins to his son, Paul Jacobs, this year and remains chairman. In 2003 he told EB that the key to success was to hire good people. Every CEO says that; what did he do to keep his good employees? They cite his professorial approach: Working at Qualcomm is like getting well paid to go to graduate school. Jacobs would concede that it also helps to be near great beaches. In wireless, location is everything.

As CEO of Arrow Electronics from 1986 to 2000, Stephen Kaufman set standards that upgraded the entire distribution industry. Before Kaufman, distributors were like Rodney Dangerfield: They got no respect. Frankly, they didn't deserve much: It was a good-old-boy network, where deals were sealed with little more than a handshake. Kaufman—a Harvard MBA—insisted on high standards financially and professionally in the Arrow organization: Deals were negotiated based on cost analyses and profit by the "best in class" person for the job, which in many cases was a woman.

Kaufman joined Arrow in 1982, when the foundering company was reeling from the tragic loss of most of its senior executives in a hotel fire two years earlier. Kaufman worked in the automotive parts industry briefly before joining Arrow. Before that he spent 10 years as a senior consultant with McKinsey. He joined Arrow as president of the electronics distribution division and became CEO in 1986. Thanks to a global acquisition strategy, he grew revenues from $9 million to $12 billion. "We at Arrow have always believed that you should attack," Kaufman once told EB.

Stephen Kaufman

Because he was the first CEO from outside the industry to run a major electronics distributor, the old guard had little use for him. He eventually got Wall Street's attention, though, and convinced it that his stock and all the others were undervalued. Once stock valuations began to creep up, other distributors paid notice and began to change too. They also paid attention as Arrow gained market share and financially outperformed its peers. By the time Kaufman left, in 2000, Arrow was the industry's largest distributor.

When his successor quit suddenly, in 2002, Kaufman returned as CEO for a three-month stint. Kaufman, who turns 64 this month, now teaches management at the Harvard Business School.

Michael Marks was not the first to influence contract manufacturing, but he has made the most lasting impact. In 11 years as CEO at Flextronics International, he has set a standard for others to match in electronic manufacturing services. Other CMs are just now starting to copy his vertically integrated model.

Michael Marks

CMs became indispensable in the past 15 years, as OEMs sought to shed factories to focus on product design and marketing. All big CMs grew by acquiring competitors, suppliers and OEM factories, but Marks did the best job of buying companies that were culturally compatible and geographically diverse and that broadened Flextronics' competencies so it could achieve vertical integration.

Vertical integration sounds as old-school as Henry Ford, something OEMs were trying to escape. Marks put his own twist on it: He created six large industrial parks, on five continents, each capable of doing everything needed to make a product. Without these parks and the cost savings they achieve, Flextronics would not be able to profitably handle low-margin consumer electronics business. The parks save money on other product groups too.

Marks has psychology degrees from Oberlin College and an MBA from Harvard. He pays close attention to customers, empowers executives and avoids bureaucratic trappings. He once told EB that he answers his own phone, because "it is more efficient; it eliminates a step." Under his leadership, Flextronics grew from less than $100 million into the world's largest CM, with annual revenue topping $14 billion.

Marks turns 55 next month and will retire next year to become the nonexecutive chairman. Why? He believes that executives should leave at the top of their game, not later.

Robert Metcalfe invented Ethernet, the most commonly used system for connecting computers within a building. He invented, commercialized and won acceptance of it as an open standard. Then he started a company and proved that money could be made from an open standard. Metcalfe, 59, a Brooklyn native, has been successful in many careers, but Ethernet is his biggest claim to fame. In 2003, its 30th year, 184 million new connections were shipped, worth $12.5 billion. Ethernet clearly contributed to the explosion of global networking, by linking computers within buildings and providing them with an on-ramp to the Internet.

Robert Metcalfe

In 1973 Metcalfe, with degrees from MIT and a doctorate from Harvard, was a networking expert at Xerox's Palo Alto Research Center (PARC), where some of the first PCs were made. Xerox was building the first laser printer and wanted all PARC computers to be able to use one printer, so it needed a network connection. PARC had hundreds of computers in one building, which was unique then. Metcalfe once told an interviewer: "The printer was fast. The question was, How could we possibly keep that printer busy?"

Metcalfe left Xerox in 1979, to promote the use of PCs and local-area networks. He convinced Digital Equipment, Intel and Xerox to work together to promote Ethernet as a standard. That same year, he founded 3Com in Santa Clara. He held various positions, including chairman and CEO. 3Com also promoted other connectivity standards, including TCP/IP. In 1990 Metcalfe retired from 3Com and began a 10-year stint as a publisher and pundit, writing an Internet column for InfoWorld. In 2001 he became a general partner at Polaris Venture Partners.

If Gordon Moore had only created Moore's Law (see "The 5 most enduring principles"), he would still be on this list. His influence and impact have been far greater than his theoretical statement, made in 1965, which he helped prove.

Gordon Moore (photo courtesy of Intel)

He cofounded Intel in 1968 with Robert Noyce and others and then drove it in the relentless pursuit of his law, first as executive vice president and later as CEO and chairman. Moore is now chairman emeritus. Intel has a take-no-prisoners attitude but is also one of the best-managed companies in the industry and is especially notable for smooth CEO successions. Moore helped devise its approach to homegrown CEO succession, which has served it well from Noyce to Moore, to Andy Grove, to Craig Barrett, to Paul Otellini.

He was CEO from 1975 to 1987, a time when Intel transitioned from memories to microprocessors. Moore once told EB that he and Noyce weren't sure who would buy the microprocessor, invented in 1971 by Intel's Ted Hoff. Few then envisioned a computer on every desk. Moore said it wasn't until IBM decided to use the Intel processor in the first PC that Intel brass thought the product might have legs.

Moore, 76, was a first-rate scientist who grew into a fine executive. Born in San Francisco, he studied chemistry at the University of California at Berkeley and received a doctorate in chemistry and physics from the California Institute of Technology. He worked for Shockley and then jumped ship with seven others to start Fairchild Semiconductor. He is the only native Californian on this list, his ancestors having arrived in 1847, before the Gold Rush. Millions of people should be glad they did.

Robert Noyce coinvented the integrated circuit; he led the group of eight engineers who bolted from Shockley Semiconductor Laboratory to start Fairchild, the first company to make and sell chips. He was the impetus for the venture capital business (see the next guy). He founded Intel. He did all this before EB was founded in 1975.

Robert Noyce (photo courtesy of Intel)

After 1975, he gave unselfishly to the industry he had helped create, by mentoring others, fashioning a much copied management style, and stepping up for the good of the U.S. industry when it faced a threat.

He grew up the son of a Congregationalist minister in Grinnell, Iowa, and was educated at Grinnell College. He got his doctorate in physics at MIT. After a brief stint at Philco, he came west.

Noyce was CEO of Intel from its inception, in 1968, to 1975, when he turned the reins over to Gordon Moore and became full-time chairman. He ushered in the age of the microprocessor. He understood the creative and often temperamental engineers who worked for him and evolved what became the classic laid-back but subtly intense Silicon Valley workplace. He pioneered the use of stock options for engineers.

Noyce mentored and invested in many entrepreneurs. While still at the height of his Intel career, he put his personal welfare second and agreed to be the first CEO of Sematech, an industry manufacturing consortium set up in 1987 to counter the Japanese. "He made a big sacrifice when he moved from California to Austin," Moore once told EB.

Noyce was 62 when he died in 1990 of a heart attack. An inventor, visionary, natural-born leader and one of the Valley's most likable pioneers, he was nicknamed "Mayor of Silicon Valley." If they had ever held an election, he would have won.

Arthur Rock: Investing Model

Arthur Rock created the VC model for financing startups, without which Silicon Valley would not have happened as we know it. Venture investing, a term Rock coined, was a new way to fund innovation. Investing at the idea stage, before there was even a prototype, was unheard of before Rock convinced Sherman Fairchild (1896–1971) to finance eight young engineers itching to escape Shockley.

Arthur Rock

The eight, led by Noyce, thought they had a better chance of building a successful semiconductor company without Shockley. Noyce heard of Rock, a young investment banker in New York, through contacts. After 35 turndowns, Rock got Fairchild to say yes. Fairchild had made his fortunate inventing aerial photography and building airplanes. Without Fairchild (the first angel investor in electronics), the eight probably would have gone their separate ways.

Fairchild Semiconductor had a profitable run for many years before faltering. Many people left it to start their own companies with VC backing. Noyce and Rock repeated their trick when they launched Intel with VC money raised by Rock.

Now 79, Rock, a Harvard MBA, once told Silicon Genesis, a Stanford-hosted Web site of oral histories: "I have no scientific background, so all the scientific mumbo-jumbo doesn't mean a lot to me." He always invested in people. At Davis & Rock, and later at Arthur Rock & Co., he backed many Valley success stories, including Teledyne, Scientific Data Systems, Apple Computer, General Transistor and Diasonics.

Soon after the Fairchild deal, he moved from New York to San Francisco and became a major player in the Valley. There would be many other VCs, but Rock was the first.

Charles Sporck stepped up to help the industry when it needed him. He devoted time and effort to creating Sematech, the manufacturing consortium founded to keep U.S. chip companies a step ahead of Japan. Earlier he provided leadership for the Semiconductor Industry Association and other industry groups. He led National Semiconductor from 1967 to 1991, making him the CEO with the longest tenure of the 10 CEOs we profile here. He is certainly the most colorful character in this group.

Charles Sporck

Sporck once told EB, "The Japanese did us one great service. They drove us out of the commodity businesses, such as memories. But we just blossomed in the area of what I call design-rich products."

Sporck effectively took a year off as National CEO to work on Sematech, launched with government and industry backing in 1987. Bill Spencer, a former Xerox executive who succeeded Noyce at Sematech, told EB, "Sporck and Noyce set aside their personal careers to get this done. For Charlie, it meant more than a year of lobbying." The mission and membership have changed, but Sematech continues to develop advanced manufacturing processes.

Sporck, from upstate New York, got a bachelor's degree at Cornell. He was old-school: a mechanical engineer and manufacturing wizard among scientists and multidegreed electrical engineers. After nearly a decade at General Electric, Sporck migrated to Fairchild, rising to vice president and general manager. There, he set up the first offshore wafer fab, in Hong Kong. Under his leadership, National also had many firsts: first to use offshore assembly and test, first to accomplish a billion dollars in annual chip revenue in the U.S. and first with a trade office in China.

A raconteur with a bushy mustache and a sparkle in his eyes, Sporck published a memoir, Spinoff, in 2001. Now 77, he still spins yarns about the days when engineers drank at the Wagon Wheel, swapped trade secrets and did other things they would prefer to forget.