1972: The Year Everything Changed

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“The Godfather” was playing in theaters everywhere, and “American Pie” was riding the FM airwaves. China was completely isolated from the West, and no one could imagine carrying a phone in their pocket.

It was 1972, the year everything changed.

Hindsight being what it is, a series of seemingly unrelated events that year set the stage for the electronics industry we know today. US President Richard Nixon visited China that year. Atari released the first-ever video game, “Pong.” Intel introduced the 8008 processor, and the first epic rivalry for dominance in the computing market was just beginning.

“I think the early ’70s were pivotal for the electronics industry,” said Michael Knight, president of TTI Inc.’s Exponential Technology Group, SVP for corporate business development, and self-acknowledged high-tech history buff. “Gaming was the next killer app. TV and radio were the first killer apps driving electronic components, but back then, computing was a brute-force timesharing system. The early ’70s set the stage for modern electronics. You had the first truly programmable microprocessor out of Intel.”

The high-tech battlefield at that time was handheld calculators, and the combatants were HP and Texas Instruments. As the story goes, HP co-founder Bill Hewlett issued a challenge to his engineers in 1971: Fit all of the features of their desktop scientific calculator into a package small enough for his shirt pocket. They did. The HP-35 could not only add, subtract, multiply, and divide but also compute trigonometric functions, logarithms, and exponents. It sold for $395.

The following year, Texas Instruments countered with the SR-10. TI’s calculator did not give values ​​for trigonometric functions, but it cost only $150.

Semiconductor technology was enabling smaller and faster devices. Intel’s 8008 was the world’s first 8-bit programmable microprocessor and only the second microprocessor from the chipmaker. It featured 50% more transistors and 8× the clock speed of its predecessor, the 4004, and it was capable of data/character manipulation. Semiconductor historians credit the 8008 with cementing the future of microprocessor development and production as a business avenue, which paved the way for the modern computer age.

By 1985, the solar-powered Sharp EL-345 calculator sold for $5.95.

That release was illustrative of another technology battle that was in full swing: Japan’s rise as an electronics powerhouse. Handheld calculators were introduced to the US by Japanese companies Busicom (Nippon Calculating Machine Corp.) and Sharp (Hayakawa Electric). Chips in early Busicom calculators were made in the US by Mostek and Intel, while Texas Instruments supplied ICs to American calculator competitor Bowmar.

Japanese companies and Japan’s government, via its Ministry of International Trade and Industry (MITI), had been steadily investing in the nation’s technology and manufacturing capabilities since the 1960s. Japan was already the price leader in consumer electronics, but until the early 1970s, quality had been pretty shabby. Japan’s automotive industry — another focus of the nation — had adopted leading-edge practices such as lean manufacturing, which minimized inventory investment, and total quality management. Automakers had also begun to engage external suppliers, while the US industry was still largely vertically integrated. These disciplines were easily transferable to electronics.

Japan had built its edge in electronics by importing technology from other nations and then out-innovating the competition. The Sony Walkman, the VCR, and digital watches were all Japanese inventions.

Two decades later, China would emerge as the low-cost option for electronics products and manufacturing services.

The chips

By 1972, Texas Instruments was accustomed to being top dog in the chip market. TI’s Jack Kilby is credited with the invention of the integrated circuit — as are Jean Hoerni and Robert Noyce of Fairchild Semiconductor — in the late 1950s. Kilby is usually credited with having developed the concept of integrating device and circuit elements onto a single silicon chip, while Noyce is given credit for having conceived the method for integrating the separate elements.

Intel’s 8008 had been developed on a separate track from the 4004, and the newer MPU’s higher transistor count, higher performance, and data-/character-manipulation capabilities gave it broader market appeal. Developed for Busicom, the 4004 had 2,250 transistors and could perform up to 90,000 operations per second in 4-bit chunks, but it could only handle arithmetic.

Intel’s 8008 microprocessor, April 1972. (Image source: Intel)

The 8008 was a precursor to the x86 architecture, noted TTI’s Knight. “All these years later, the x86 is not a dead technology. Like MOSFETs, [the 8008 was] foundational technology.”

Large-scale integration was also introduced in 1972. LSI enabled tremendous reductions in the cost, size, weight, and power consumption of components, along with increased speed and reliability. These features stem from the physical structure of the chip; more gates could be added without enlarging it.

The personalization of computing had begun.

Gaming

The first PC was still years away, but gaming was driving electronics innovation. Magnavox introduced the first gaming console, the Odyssey, in May 1972. The Odyssey had a number of removable circuit cards that switched between the built-in games. A few years later, with the Odyssey 2, each game could be customized, with its own background and foreground graphics, gameplay, scoring, and music. Game players could purchase a library of video games tailored to their interests.

The Odyssey 2 includes a full alphanumeric membrane keyboard, intended for educational games, selecting options, or programming.

“Gaming drove a bunch of innovations,” said Knight. “It got people focused on on-board memory — the 8008 had programmable memory — which was important for gaming. There was a surge in gaming. Somewhere along the line, the gaming industry made a mistake: It became more focused on software. Then there was this rebirth, thanks to Nintendo, and gaming went back to being the driver of chip technology. It gave birth to Nvidia and the GPU, which is now critical to autonomous driving.”

By the mid-1970s, the first ROM cartridge-based consoles arrived, including the Atari Video Computer System (VCS). Coupled with rapid growth in arcade video games, including “Space Invaders” and “Pac-Man,” the home-console market flourished.

The rise of China

Nixon’s 1972 arrival in Beijing ended 25 years of no communication or diplomatic ties between China and the US and was the key step in normalizing relations between the US and the PRC.

“There is a lot of correlation between what happened in Japan and what’s happening in China,” said Knight. “Japan decided to move upstream in electronics, and the government got behind it and was very deliberate about enabling technology. That mantle got passed to China, which is on the same journey. From a government standpoint, China moved from being a second source to truly innovative with its own brands.

“Nixon going to China, which laid the foundation for its entry into the World Trade Organization [WTO]followed by electronics outsourcing, allowed China to start leveraging what [U.S. tech companies] were teaching them,” he added. “It was a brilliant move on Nixon’s part; he saw bringing China into the first world was the best way to defeat communism. Where we are today, regarding competitiveness with China, began with that decision.”

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