WHAT IS the direct link between Intel Israel’s $4.1 billion in annual exports (nearly 10 percent of all hi-tech exports), mostly shipped to China, and a small Jewish boy hidden during World War II from the Nazis by a Dutch Calvinist farm family at the risk of their own lives? Therein lies a tale – a story of courage, creativity, innovation and, above all, a deep-seated instinct for survival. In some ways, it is the archetypal story of Israel itself.
I spoke with Dov Frohman, who established Intel Israel in 1974 and made it a global center of excellence in both design and production. The interview was done together with David (Dadi) Perlmutter, Intel Corp. executive vice president until 2014, for our online Technion course on innovation, due for launch in June.
Dov Frohman was born March 28, 1939, to Abraham and Feijga Frohman, Polish Jews who moved to Holland in the early 1930s to escape rising anti-Semitism. After Nazi Germany invaded Holland in 1942, his parents entrusted their small child to friends in the Dutch Resistance, who in turn placed him with the Van Tilborghs, a Calvinist farm family that lived near the Belgian border. They sheltered the little boy for the duration of the war; his parents died in the Holocaust.
Frohman spent years in orphanages in Europe before immigrating to Israel in 1949, after the state was founded. He served in the Israel Defense Forces, studied electrical engineering at the Technion and, in 1965, went to the US to what came to be known as Silicon Valley to work for Fairchild Semiconductor, where he met Gordon Moore, Robert Noyce and Andrew Grove.
The latter three friends left Fairchild in 1968 and founded Intel. Frohman joined them in the summer of 1969 after completing his PhD in electrical engineering at the University of California, Berkeley.
In 1970-71 Frohman invented a world-changing technology known as EPROM (erasable programmable read-only memory), the direct predecessor of today’s ubiquitous flash memory present in virtually every electronic device – an innovation, according to Moore, “as important in the development of the PC industry as the microprocessor itself.”
The invention was an accident. Frohman was asked to solve a reliability problem in Intel’s main memory chip, which became unstable at high temperatures. He solved the problem in a few weeks. And then came the flash of insight that led to EPROM.
In 2009, Frohman told Jeff Katz and the Computer History Museum, “There’s a lot of talk about the ‘ah-hah!’ moment. My belief is, you come to it through daydreaming and, in retrospect, you never remember how it came about. It’s a combination of random opportunity and daydreaming. I thought, you know, these [electrical] charges are causing a lot of problems at the silicon surface of the memory chip, maybe we can use it as a memory device. Once I had the main insight, the rest was almost predictable.
“It was a start-up; I was by myself at the beginning. It was a crazy idea, and there was a lot of skepticism,” he relates to The Jerusalem Report.
Intel co-founder Noyce met Frohman in the corridor, and said, “Dov, you look preoccupied this morning. What’s the matter?” “He was a people-sensitive guy,” Frohman recalls.
Frohman explained that he needed to put a transparent quartz window atop the memory chip so that it could be erased with ultraviolet light, but he said the production people would never agree, owing to the expense and difficulty.
Noyce said why not? And it was done.
The result was a two-kilobyte memory chip that Intel’s customers loved. Today’s flash memory, a direct descendant of Frohman’s EPROM, was so named by its inventor Dr. Fujio Masuoka because it could be erased in a “flash,” almost like the flash of a camera.
I ask Frohman: “In your career, how were you influenced by your life experiences, especially those when you were a child and in danger?” “In three ways,” he says. “First, survival.
I learned to survive in difficult situations.
This theme of survival is by far the most important one in everything I have done.
Doing what it takes to survive. Second, doing the impossible. Setting ambitious goals for those I lead. Third, turning risk into opportunity.”
On survival: “The Dutch farm family – two parents and their four children ‒ that sheltered me during the war endangered their whole family. The children were all fair-haired. My hair was dark. I hid it under a cap. It was almost crazy for them to take this risk. But they did it anyway. We are in close contact to this day, and the clan from that original family has grown to 500 or 550 people!” On turning crisis into opportunity: In the First Gulf War in 1991, Iraq and Saddam Hussein fired 39 Scud missiles at Israel.
Frohman recalls the 20-minute drive from his home to the Intel plant in Jerusalem’s Har Hotzvim and having to decide whether to close the plant, as the Civil Defense authorities mandated, or keep it open.
In a Harvard Business Review article, Frohman recalled pondering two dilemmas: Would the Intel plant survive if it was shut down? And if it was kept open, would anybody show up? What should I do? If we shut down, it could jeopardize the entire hi-tech industry in Israel. No company would risk setting up operations in Israel. But if we take the risk and stay open, I am personally responsible if anyone is hurt.
Frohman made a decision in under 20 minutes, on the way to the plant. “I decided we would stay open. It’s a matter of survival.
And nearly all the workers showed up.
Some brought their children, and a makeshift day-care center was set up with over 50 children at one point.”
Perlmutter observes, “It was a crucial, fundamental moment in the history of Intel Israel and Israeli hi-tech in general. It became part of the culture. ‘We never missed a day [of production].’ Stories like this are seminal. They capture core values.”
On doing the impossible: As head of Intel Israel, Frohman led a series of breakthrough innovations by Israeli engineers. But, I note, innovation is not just about creating new things, it is also about finding ways to become more cost-efficient. Israel trails other OECD countries in productivity.
Frohman led a seminal effort to slash production costs at the Har Hotzvim plant. “I decided,” he tells us, “to lower the cost of a die drastically.” In semiconductor production, a silicon wafer is “diced” or cut into many small pieces; each piece is known as a “die.”
“Israeli manufacturing today is nothing to be proud of. And, in those days, in the 1980s, it was even worse. I decided we would lower the cost by 75 percent, from $2.60 per die to 66 cents. So ‘66 cents per die’ became the mantra ‘66 cents or die!’ “We put this slogan on flags. It was an impossible ‘stretch goal.’ But competition in memory chips at the time was fierce. It was a matter of survival. I didn’t know if we could do it. But it galvanized our whole operation.
People thought of all kinds of ways to cut costs. I think we got to 70 cents. At the time, I wanted to send a message. If Intel got into trouble, we at Intel Israel would be the last operation to close. Survival!” I asked Frohman how he built a strong culture at Intel Israel, a culture of creativity, innovation, bold can-do risk-taking, built on core values.
“Core values never change,” he says.
“Even when everything else does.” He recounts how he once arrived at a meeting of Intel managers 15 minutes late. Normally a boss ignores lateness, brushes it off or explains it away. But Frohman behaved differently.
He told the meeting, ‘I’m late and in being late I have violated three or four core values of Intel.’ The ensuing discussion became one of the best conversations ever, he tells us, and became a key turning point in building the culture.
“I don’t believe in mentoring,” he says.
“I believe in invisible mentoring. You pick a role model and observe them, see how they behave and you model your own behavior on it. They don’t formally teach you, but you learn from them by seeing how they act.”
Frohman’s invisible mentor was Grove, the legendary Intel CEO and chairman, who died March 19. Grove, too, was a Holocaust survivor, escaping from Austria and making his way as a teenager to America. Grove, like Frohman, had a survival mindset and made it the centerpiece of a best-selling book, “Only the Paranoid Survive.”
In 1991, Frohman was awarded the coveted Israel Prize. It is widely recognized that he personally brought Intel to Israel and made it a center of excellence, so he gets much of the credit for Intel’s key role in Israel’s hi-tech industry and exports.
But that role is not without controversy.
Intel Israel pays only a five percent corporate tax rate, compared with the 26.5 percent standard rate, and will get grants of up to $600 million over five years from the government for its Kiryat Gat upgrade.
But, at the same time, Intel plans to invest $6 billion in the upgrade, the largest single investment in Israel ever, and is committed to hiring 1,000 new employees.
Intel Vice-President Mooly Eden, speaking at a celebration of Intel’s 40th year in the country, said, “If Israel is the Start-up Nation, Intel had a major role in getting it there.” He cited research showing some 10,000 former Intel workers have gone on to establish 30 new hi-tech companies every year. He noted that Intel Israel has produced and exported a billion chips (microprocessors and components), mostly at the two Kiryat Gat fabrication plants.
Frohman agreed to this column, on one condition. He insisted that I quote his strong views on “Start-up Nation.”
“I do not like the term since it ignores the disastrous impact of Israeli hi-tech’s focus on ‘exits’ that has become an idol for the young generation, led by the media. Exits deepen, significantly, the gap between the haves and have-nots in Israel and also minimize hitech’s contribution to the Israeli economy.
Manufacturing capability is essential in order to be competitive in the long run and in ‘Start-up Nation’ this is mostly ignored.”
In short – it is not enough to have ideas and start-ups. You need to make at least some of the things you invent. R&D is strengthened by the discipline of production and vice versa, production generates stronger R&D.
Frohman, 77, has a new project called Noah’s Ark. “The goal,” he explains, is to encourage young children to think ‘out of the box.’ I came to the conclusion that it may be hopeless to change adults’ way of thinking. But kids, they are like sponges, they are unbelievable in what they can do.”
Noah’s Ark is setting up seven kindergartens, in Israel and Italy, where Frohman has a home in the Dolomites, a mountainous region in the northeast. The goal, he says, is that “these kids will become like Trojan Horses in society, and lead a revolution in thinking. The aim is raising men and women of vision who are firm but flexible, able to both dream and fulfill their dreams, a generation that will shape and tackle the challenges of the future.”
Today’s managers focus on growth, profit, market share and competitiveness. Survival is not in their lexicon. Yet, in today’s volatile world, survival is not a certainty, for individuals, companies, even small countries.
Did anyone believe a 165-year-old investment bank, Lehman Brothers, could disappear overnight? But it did, on September 15, 2008.
The US can lose 50,000 soldiers in Vietnam, devastate Iraq and bog down in Afghanistan without endangering its survival in the least. But Israel, a small country, has very little margin for error and can never take for granted its continued existence.
Dov Frohman reminds us that survival has always been, still is, and will always be, a primary concern. As long as it remains so, those who make crucial decisions will avoid the pitfall of blind complacency. The writer is senior research fellow at the S. Neaman Institute, Technion and blogs at www.timnovate.wordpress.com