Signetics

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Signetics, once a major player in semiconductor manufacturing, made a variety of devices which included integrated circuits, bipolar and MOS, the Dolby circuit, logic, memory and analog circuits and Motorola clone CPUs, some of which were included in the first Atari video games.

Signetics was started in 1961 by a group of engineers -- David Allison, David James, Lionel Kattner, and Mark Weissenstern -- who left Fairchild Semiconductor. At the time, Fairchild was concentrating on its component business (mostly transistors), and its management felt that by making integrated circuits (ICs) it would alienate its customers.

Signetics founders believed that ICs were the future of electronics (much like another contemporary Fairchild spinoff, Amelco,) and wished to commercialize them. The name came from SIGnal NETwork Integrated Circuits, similar to how the name Intel was created.

The venture was financed by a group organized through Lehman Brothers, who invested $1M. The initial idea was to design and manufacture ICs for specific customers. In order to facilitate this goal, Signetics did not have a separate R&D lab; instead, the engineering was all done in technical development department, and was closely tied to marketing.

Signetics first developed a series of standard DTL ICs, which it announced in 1962. However, it was struggling to sell custom-made circuits, which was the original goal, and was quickly exhausting the initial investment money, and new investors had to be found. In November 1962, Corning Glass invested another $1.7M in Signetics, in exchange for 51% ownership. This money enabled Signetics to survive, and much of it was put into a marketing and sales campaign.

In 1963, the department of defense made a decision to begin a shift towards microelectronics and ICs, due to their small size, higher reliability, and lower power consumption. As a result, military contractors began to explore the field, and as Signetics was one of the few firms selling custom circuits, it benefited greatly.

In the fall of 1963 and throughout most of 1964, sales grew quickly, and the company finally became profitable. Signetics also grew rapidly, hiring more engineers and increasing its manufacturing space. In 1964, Signetics opened a large new manufacturing plant in Sunnyvale, California. At this time it was by far the largest manufacturer of ICs in Silicon Valley. It later expanded also to factories in Orem, Utah and Albuquerque, New Mexico where there were two fabs, FAB22(4") and FAB23(6").

In 1964, Fairchild began to push its way into the IC business. Signetics's circuits being the standard in the market, Fairchild decided to copy them. However, it used its superior cash position, marketing power, and manufacturing strength to undercut Signetics by slashing prices and flooding the market. Signetics was struggling to compete, and began losing money again. Corning saw this as proof of poor management, and used its controlling interest to drive out most of the founders and take complete control of the company.

Signetics managed to stabilize and become profitable again, but it never regained its market leadership, which was firmly held by Fairchild. It continued to innovate in the IC technology, and remained a significant force. Around 1971, the Signetics Corporation introduced the 555 timer IC. It was called "The IC Time Machine". It was also the first and only commercial IC timer available at the time. In the United States, Signetics reached its manufacturing height at around 1980. From then on the Signetics brand slowly disintegrated in the face of competition from AMD and Intel.

In Korea, "Signetics began IC assembly and test operations in Korea in 1966 as part of Signetics Corporation. It was acquired by Philips Semiconductor in 1975, and became an independent subcontract service provider in 1995. Young Poong Corporation acquired Signetics in 2000 as a major shareholder." (from the Signetics website, Jan. 2006)