Mostek


Mostek was an integrated circuit manufacturer, founded in 1969 by L. J. Sevin, Louay E. Sharif, Richard L. Petritz and other ex-employees of Texas Instruments. Initially their products were manufactured in Worcester, Massachusetts, however by 1974 most of its manufacturing was done in the Carrollton, Texas facility on Crosby Road. At its peak in the late 1970s, Mostek held an 85% market share of the dynamic random-access memory memory chip market worldwide, until being eclipsed by Japanese DRAM manufacturers who offered equivalent chips at lower prices by dumping memory on the market.
In 1979, soon after its market peak, Mostek was purchased by United Technologies Corporation for $345M. In 1985, after several years of red ink and declining market share, UTC sold Mostek for $71M to the French electronics firm Thomson SA, later part of STMicroelectronics. Mostek's intellectual property portfolio, which included rights to the Intel x86 microprocessor family as well as many foundational patents in DRAM technology, provided a large windfall of royalty payments for STMicroelectronics in the 1990s.

Early calculator business

Mostek's first contract was from Burroughs, a $400 contract for circuit design.
The first design to be produced in their newly set-up MOS fab in Worcester, was the MK1001, a simple shifter chip. This was followed by a 1K PMOS aluminum-gate DRAM, the MK4006 that was manufactured in their Carrollton facility. Mostek had been working with Sprague Electric to develop the ion implantation process which provided a tremendous gain in the control of doping profiles. Using ion implantation, Mostek became an early leader in MOS manufacturing technology, while their competition was still mostly using the older bipolar technology. The resulting increased speed and lower cost of the MK4006 memory chip made it the runaway favorite to IBM and other mainframe and minicomputer manufacturers.
In 1970 Busicom, a Japanese adding machine manufacturer, approached Intel and Mostek with a proposal to introduce a new electronic calculator line. Intel responded first, providing them with the Intel 4004, which they used in a line of desktop calculators. Mostek's device took longer to develop but was a single chip calculator solution, the MK6010. Busicom used the Mostek design in a new handheld line, the Busicom LE-120A, which went on the market in 1971 and was the smallest calculator available for some time. Hewlett-Packard also contracted with Mostek for mask development and production of chips for their HP-35 and HP-45 lines.

World leader in DRAM

Mostek co-founder Robert Proebsting invented DRAM address multiplexing with the MK4096 4096 X 1 bit DRAM introduced in 1973. Address multiplexing was a revolutionary approach which reduced cost and board space by fitting a 4K DRAM into a 16 pin package, while competitors took the evolutionary approach which led to a bulky and relatively expensive 22 pin package. Competitors derided the Mostek approach as unnecessarily complex, but Proebsting understood the future roadmap for DRAM memories would benefit greatly if only one new pin were needed for every 4X increase in memory size, instead of the two pins per 4X for the evolutionary approach. Computer manufacturers found address multiplexing to be a compelling feature as they saw a future 64K DRAM chip would save 8 pins if implemented with address multiplexing and subsequent generations even more. Per pin costs are a major cost driver in integrated circuits, plus the multiplexed approach used less silicon area, which further reduces chip cost. The MK4096 was produced using an NMOS aluminum-gate process with an added interconnect layer of polysilicon
The fear, uncertainty and doubt put up by the competition regarding address multiplexing was dispelled by the actual performance of the MK4096 which proved solid and robust in all types of computer memory designs.
In 1976 Mostek introduced the silicon-gate MK4027, and the new MK4116 16K double-poly silicon-gate DRAM. They were designed by Paul Schroeder, who later left Mostek to co-found Inmos. From this point until the late 1970s Mostek was a continual leader in the DRAM field, holding as much as 85% of the world market for DRAM. The MK4027 and MK4116 were reverse-engineered by Mosaid and successfully cloned by many companies.
The 64K generation of DRAMs required a transition from 12 volt to 5 volt-only operation, in order to free the +12 and −5 volt pins for use as addresses. While most competitors took a conservative approach by scaling the basic MK4116 design and process, Mostek undertook a major redesign which incorporated forward-looking features that were not necessary at the 64K level and delayed their entry into the market. Mostek's 256K DRAM was further delayed by a then-ambitious two layer metallization design. When the price for 64K DRAMs collapsed in 1985, Mostek's 256K device was not ready for volume production, and the company suffered heavy losses.
Mostek's DRAM legacy is exemplified in the MK4116, MK4164 and MK41256, each of which were successfully cloned by competitors, both USA-based and overseas-based. "By four" DRAM was a simple adaptation of the MK4116/MK4164/MK41256 technology, utilizing a larger package to accommodate the additional data bits and multiplexing the data in/out pins as well; the basic *RAS, *CAS, *WRITE and multiplexed address bus concept was retained intact.

World leader in telecommunications products

Mostek enjoyed many years of mastery of the international market for telecommunications products. Their product line included telephone tone and pulse dialers, touchtone decoders, counters, top-octave generators, CODECs, watch circuits, and a host of custom products for a variety of customers. The custom products used the simple PMOS process and helped maintain Mostek's cash flow through a smoky fire in the fab that closed it for six months, intense DRAM competition, and other semiconductor market pressures. During the fab shutdown production of the PMOS products was shifted to several external fabs. Several employees played a key role in the Telecommunications and Industrial Products Department. Robert Paluck headed the department, assisted by Michael Callahan, Charles Johnson, William H. Bradley, Robert C. Jones, Robert Banks, Ted Lewis, Darin Kincaid, William Cummings, and a host of other employees. Ted Lewis and William H. Bradley were designated as key employees after the United Technologies purchase. Paluck left Mostek to work with Sevin-Rosen Partners and Convex Computer. Bradley designed all of the custom products based on the single-chip-calculator platform, as well as the code for the wristwatch devices produced by Mostek for Bulova and other customers. For a short while, Paluck headed a joint venture called Mostek Hong Kong, a collaboration with Bulova for the production of high-end wristwatches based on Mostek designs. Mr. Bradley was an employee of that joint venture. As Mostek's focus was shifted to its DRAM products, the industrial and telecommunications products were ignored and their market share vanished.

Microprocessor second sourcing deals

With this foundation in calculator chips and high volume DRAM production, Mostek gained a reputation as a leading semiconductor "fabrication house" in the early 1970s. One of their more popular products was the Mostek 3870, which combined the two-chip Fairchild F8 into a single chip, which they introduced in 1977. William H. Bradley designed a host of custom products based on the MK3870. Fairchild later licensed the 3870 back from Mostek. They also produced ROM chips on demand, as well as the chips powering the Hammond electronic organ.
Mostek cut a deal with a startup, Zilog, in which Mostek provided fab resources to manufacture the Zilog microprocessors in return for second sourcing rights to the Zilog family. Mostek produced MK3880, the Zilog Z80 and a series of Z80 support chips, until Zilog built their own fab. The Z80 eventually became the most popular microcomputer family as it was used in millions of embedded devices as well as in many home computers and computers using the de facto standard CP/M operating system, such as the Osborne, Kaypro, and TRS-80 models.
When Vin Prothro, President, and L. J. Sevin, Chairman of the Board, discovered that Zilog had modified the recipe for Z80 chips to keep the yields low, thereby buying Zilog time to build their own fabs, Mostek sought a new microprocessor partner. They negotiated a deal with Intel to gain second sourcing rights to the Intel 8086 microprocessor family and the future x86 designs. After Sevin left to become a venture capitalist, Prothro signed another pivotal deal with Motorola to gain the rights to the Motorola 68000 and VME computers.
The Intel x86 microprocessors would go on to become the brains for the IBM PC, while the Motorola 68000 would become the heart of the Apple Macintosh line. Mostek had secured the rights to every microprocessor family that would be important for the next 25 years. However, Mostek chose not to aggressively follow-up its entry into microprocessors—instead maintaining its concentration on the highly competitive DRAM business.

Decline in the face of Asian competition

Mostek merged with United Technologies in 1979 to prevent an unfriendly takeover from Gould at the 10th anniversary of the company's founding, when a large block of stock options controlled by Sprague stock became vested. United Technologies would go on to lose their investment. The leadership chosen for the semiconductor division did not appreciate the up-front investment required or the long time for ROI. They sacrificed the Mostek's leadership position in some markets, focusing on the DRAM basket. They eventually spent hundreds of millions trying to keep the company going during the various semiconductor and videogame crashes of the early 1980s, and eventually gave up and sold it to Thomson Semiconductor in 1985 for $71 million.
Unfortunately the DRAM marketplace was the beachhead where Japanese firms would make their successful assault on the global semiconductor market. Mostek was unable to match the Japanese extremely aggressive pricing, and succumbed during a particularly brutal price war when Korean firms tried to beat the Japanese at their own game. Micron Technology would later bring suit to prove the Japanese memory manufacturers guilty of price dumping, but the ruling would be too late to save Mostek.
Thomson proceeded to lay off 80% of the workforce in an attempt to return the company to profitability. The next year they merged with SGS-ATES to become STMicroelectronics, based in Geneva, Switzerland. Although by this time most of Mostek's designs were no longer commercially viable, their DRAM patents turned out to be valuable and STM started a series of lawsuits to collect royalties. Between 1987 and 1993 STM made $450 million on these licenses alone.

Spinoffs

Jerry Rogers founded Cyrix in 1988 to capitalize on the Mostek second source agreement that allowed any 80X86 processor to be legally copied, which Intel attempted to stop via lawsuits. Eventually, after losing many legal battles, Intel simply changed the name of the 80586 to the Pentium, thereby ending the agreement.
Micron Technology was a very successful spinoff founded by a handful of Mostek employees, including Ward Parkinson, Dennis Wilson, and Doug Pitman.
Sevin Rosen Funds co-founded by LJ Sevin who was also the co-founder of Mostek and CEO. Sevin Rosen funded Compaq Computers, Cyrix, Convex Computers and more.