The most badly timed spin-off in the history of the semiconductor industry was the spin-off of Rheem Semiconductor from Fairchild Semiconductor. It happened in 1959, two years after Fairchild was founded, and was the first of many spin-offs from Fairchild.
Strangely enough the Rheem spin-off was led by the company boss, Ed Baldwin, which seems a curious anomaly. After all, if you're the boss, and call the shots, why lead a spin-off?
The reason may have had something to do with the fact that Baldwin was not one of the eight co-founders of Fairchild but was hired from Hughes, shortly after Fairchild was founded, to act as the general manager of the company.
Although Fairchild offered Baldwin the same shareholding terms as the eight founders, Baldwin declined the offer, presumably hanging out for a better deal than the others.
As things turned out, Baldwin never ever held a Fairchild share which was a mistake because, in 1959, Fairchild exercised an option to buy out the eight founders' shareholdings for $250,000 each.
Anyway, Baldwin went off to found Rheem in 1959 taking with him a team of engineers and the Fairchild 'cook books' detailing everything anyone needed to know exactly how to make mesa transistors.
Less than two weeks after Baldwin defected, Jean Hoerni, one of the Fairchild co-founders who had been working in secret without the knowledge of management, demonstrated his planar process - the process by which all ICs would be made in the future.
The planar process made the mesa transistor cook books obsolete. Rheem never really got going and was sold to Raytheon in 1961.
And then Fairchild in it's own spin off from National bought Raytheon's Analog line in 1997. I guess what goes around does indeed come around.
Mr. Manners,
Rheem was founded in 1926 in Alameda, CA by the Rheem brothers, Richard and William. The company remains a very successful $2 billion manufacturing company headquartered in Atlanta, Georgia.
Gary Tapella
Pres & CEO of Rheem (Retired)
Thanks for writing in, Mr Tapella, I take it that the Rheem Semiconductor which spun off from Fairchild Semiconductor in 1959 under the leadership of Ed Baldwin was funded by the Rheem brothers. I see that Rheem Manufacturing sold Rheem Semiconductor to Raytheon in 1961. Thanks for pointing that out, I didn't know that until now, best wishes, David
That's interesting Mike, thanks. It's amazing how enduring the old product lines are, even after the companies which originally developed them are gone.