VLSI Technology

History

The company was founded in 1979 by a trio from Fairchild Semiconductor by way of Synertek—Jack Balletto, Dan Floyd, and Gunnar Wetlesen—and by Doug Fairbairn of Xerox PARC and Lambda (later VLSI Design) magazine.

Alfred J. Stein became the CEO of the company in 1982. Subsequently, VLSI built its first fab in San Jose; eventually a second fab was built in San Antonio, Texas. VLSI had its initial public offering on February 23, 1983, in which 4,000,000 shares were sold at $13 a share. It was listed on the stock market as (Nasdaq: VLSI). The company was acquired in 1999 by Philips for $21 a share, and survives to this day as part of NXP Semiconductors.

The original business plan was to be a contract wafer fabrication company, but the venture investors wanted the company to develop IC (Integrated Circuit) design tools to help fill the foundry.

Thanks to its Caltech and UC Berkeley students, VLSI was an important pioneer in the electronic design automation (EDA) industry. It offered a sophisticated package of tools, originally based on the 'lambda-based' design style advocated by Carver Mead and Lynn Conway.

An early challenge for the fledgling company was the so-called Bagpipe project. In January 1982, Steve Jobs approached a group of VLSI Technology managers including Jack Balletto, with a request: Would they help Apple Inc. build a custom chip for the not-yet-announced Macintosh computer? In spite of the fact that VLSI's design tools were still in their infancy, the offer proved irresistible because of the prestige the chip would confer on the company if successful. For the VLSI technology engineering team, this project became an all-hands-on-deck effort. Working side by side with Apple engineers Burrell Smith and Martin Haeberli, the group delivered a packaged prototype by September. Although the chip (referred to as the Integrated Burrell Machine) was functional, its performance fell short of expectations, and schedule pressures caused Apple to drop the chip in favor of a more conservative design – a big disappointment for VLSI Technology.