Intel’s Andy Grove offers proof of immigrants’ value

Once again, Europe has had to bear the consequences of the years of alienation and separation of its large community of migrants. And, once again, we are witnessing the carnage brought about by young men lured down the road to ruin.

Across the Continent, people are more concerned than ever about the army of newcomers moving up from the Middle East and what the arrival of this group may mean.

But, last week, another event took place, the passing, in his 80th year, of a man who went to America as a refugee, when he was just 20 years old and spoke no English. His life serves as a reminder of the positive roles that new arrivals can play in established societies.

András István Gróf left Hungary in a hurry as the Soviet military moved in , in October, 1956, to crush the country’s independence movement.

As a young Jew, the son of a dairy man, he had never felt accepted by the country of his birth, and he later confessed to having little interest in ever returning.

He recalled his amazement that he was not picked upon in New York, for either being Jewish or an immigrant.

Andras soon learned English and got a job as a busboy, changing his name to Andy Grove. He married Eva, a waitress, within two years of his arrival. He earned a degree in chemical engineering, finishing first in his class, and secured a doctorate.

Grove was employed by a computing Californian firm, Fairchild Electronics, while also lecturing at Berkeley University. He achieved all of this despite having a hearing aid, after a bout of scarlet fever at the age of four left him partially deaf.

Grove got to know two men, Gordon Moore and Robert Noyce. Moore headed up Fairchild’s research department.

A famous theory, ‘Moore’s Law’, would be named after him. This states that the power of computer chips would double every eighteen months and would continue to do so indefinitely.

Moore’s group developed the first marketable, mass-produced, silicon-based, integrated circuit, replacing the previous reliance on transistor technology.

However, the company’s top brass were reluctant to provide the necessary backing, so Moore and Noyce approached a venture capitalist, Arthur Rock, who provided the financing that enabled them, in the summer of 1968, to establish a new company, which would soon become known as ‘Intel’ ( short for ‘integrated electronics’ ). The company earned revenues of $2,672 (€2.392) in its first year of operation.

The company went public in 1971. By 1997, its annual revenues exceeded $20bn.

Andy Grove was the third person to come to work for Intel. He was appointed to run the manufacturing operation. Many questioned this.

His English was hard to understand. He had a bad temper.

But Grove soon compounded the sceptics by dint of his intense drive. He would later become one of the great American management communicators, writing bestsellers such as Only the Paranoid Survive.

Over time, he would engineer the transformation of Intel into the leading producer of microprocessors and a key driving force behind the PC revolution.

There would be plenty of bumps on the road, including the dumping in the mid-1970s of below-cost chips on the US market by the Japanese, followed by a crash in chip prices in the early 1980s.

In 1989, Intel transformed the fortunes of this country with its announcement of a huge investment in Leixlip, north Kildare. Since then, according to Intel Ireland, it has invested $12.5bn in its Irish operation, its largest semiconductor fabrication plant outside of the US.

It is a major supporter of research into nanotechnology, being carried out by Crann at Trinity College and by the University College Cork (UCC) Tyndall Institute.

Grove took over as chief executive in 1987, helping to lead Intel’s global expansion, while pursuing a policy of preserving manufacturing jobs in the US.

In an influential 2010 article in ‘Bloomberg’, he criticised US technology companies, and the venture-capital industry, for their willingness to export manufacturing jobs overseas, noting that companies such as Apple and Seagat now employ ten times as many people in Asia as they do in America.

Grove himself faced his greatest challenge, as chief executive, when it emerged that the company’s new Pentium chip technology had certain bugs or inbuilt flaws.

Having initially downplayed the problem, the chief executive reversed tack and announced a major initiative to tackle the problem. Intel beefed-up its customer support operation and took a $500m write-off.

The upshot was that Intel’s brand was boosted and Grove was nominated as Time magazine’s ‘Man of the Year’ in 1997, credited as being the person who drove the growth phase of Silicon Valley. Dogged by ill health, he stepped down as chief executive, being replaced by Craig Barrett.

But Grove remained active as a writer, lecturer, and board director, up to his death.

In 2010, he hit out at the “received wisdom” from the ‘Davos crowd’ that America’s future was/is as a knowledge economy.

In his view, the technology and venture-capital industry had lost the ability to ‘scale up’, which would ensure that innovations produced thousands of jobs and the necessary manufacturing ecosystem. Instead, the US has offshored factory jobs to the East.

Management and stockholders have benefited, but US workers have lost out.

As he noted, “today, employment in the US computer industry is 166,000 less than it was when the first PC was assembled in 1975.”

The lack of a manufacturing ecosystem means that the US is missing out on emerging areas, including battery-powered transport and solar power.

Grove argued for greater state involvement in the identification of, and support for, industries of the future.

His determined, almost confrontational approach, allowed for those lower down the organisation to challenge their superiors. As his successor, Craig Barrett recalled, “he (Grove) was one of the most direct humans I ever met.”

Sometimes, of course, the direct approach could go too far.

Intel’s ruthless approach to its competitors led to lawsuits. An anti-trust settlement with rival, AMD, cost Intel $1.25bn. It has faced lawsuits brought by the New York authorities and by the European Commission.

The company is now coping with the high-tech equivalent of middle-aged spread, and ‘wear and tear.’

However, few would deny the achievements of its departed pioneer, whose life serves as a reminder of what can be achieved by a determined migrant, given the right conditions.