Start-up Nation

almost five million times per second (4.77 megahertz), and were small enough to allow for the creation of computers that would fit in homes and offices.

IBM chose Israel’s 8088 chip as the brains for its first “personal computer,” or PC, launching a new era of computing. It was also a major breakthrough for Intel. According to journalist Michael Malone, “With the IBM contract, Intel won the microprocessor wars.”⁹

From then on, computing technology continued to get smaller and faster. By 1986, Intel’s only foreign chip factory was producing the 386 chip. Built in Jerusalem, its processing speed was 33 megahertz. Though a small fraction of today’s chip speeds, Intel called it “blazing”—it was almost seven times faster than the 8088. The company was solidly on the path imagined by one of its founders, Gordon Moore, who predicted that the industry would shrink transistors to half their size every eighteen to twenty-four months, roughly doubling a chip’s processing speed. This constant halving was dubbed “Moore’s law,” and the chip industry was built around this challenge to deliver faster and faster chips. IBM, Wall Street, and the business press all caught on, too—clock speed and size was how they measured the value of new chips.

This was proceeding well until about 2000, when another factor came into the mix: power. Chips were getting smaller and faster, just as Moore had predicted. But as they did, they also used more power and generated more heat. Chips overheating would soon become a critical problem. The obvious solution was a fan, but, in the case of laptops, the fan needed to cool the chips would be much too big to fit inside. Industry experts dubbed this dead end the “power wall.”

Intel’s Israeli team was the first group within the company to see this coming. Many late nights at Intel’s Haifa facility were dedicated to hot coffee, cold takeout, and ad hoc brainstorming sessions about how to get around the power wall. The Israeli team was more focused than anyone on what the industry called “mobility”—designing chips for laptop computers and, eventually, for all sorts of mobile devices. Noticing this tendency, Intel put their Israeli branch in charge of building mobility chips for the whole company.

Even given this responsibility, Israelis still resisted fitting into the Intel mainstream. “The development group in Israel, even before it was tasked as the mobility group, pushed ideas for mobility that went against the common wisdom at Intel,” explained Intel Israel’s chief, David “Dadi” Perlmutter, a graduate of the Technion (Israel’s MIT) who’d started designing chips at Intel Israel in 1980.¹⁰ One of these unconventional ideas was a way to get around the power wall. Rony Friedman was one of Intel Israel’s top engineers at the time. Just for fun, he had been tinkering with a way to produce low-power chips, which went blatantly against the prevailing orthodoxy that the only way to make chips faster was to deliver more power to their transistors. This, he thought, was a bit like making cars go faster by revving their engines harder. There was definitely a connection between the speed of the engine and the speed of the car, but at some point the engine would go too fast, get too hot, and the car would have to slow down.¹¹

Friedman and the Israeli team realized that the solution to the problem was something like a gear system in a car: if you could change gears, you could run the engine more slowly while still making the car go faster. In a chip, this was accomplished differently, by splitting the instructions fed into the chip. But the effect was similar: the transistors in Intel Israel’s low-power chips did not need to flip on and off as fast, yet, in a process analogous to shifting a car into high gear, they were able to run software faster.

When Intel’s Israel team euphorically introduced its innovation to headquarters in Santa Clara, the engineers thought their bosses would be thrilled. What could be better than a car that goes faster without overheating? Yet what the Israeli team saw as an asset—that the engine turned more slowly—headquarters saw as a big problem. After all, the entire industry measured the power of chips by how fast the engine turned: clock speed.

It did not matter that Israeli chips ran software faster. The computer’s engine—composed of its chip’s transistors—wasn’t turning on and off fast enough. Wall Street analysts would opine on the attractiveness (or unattractiveness) of Intel’s stock based on performance along a parameter that said, Faster clock speed: Buy; Slower clock speed: Sell. Trying to persuade the industry and the press that this metric was obsolete was a nonstarter. This was especially the case because Intel had itself created—through Moore’s law—the industry’s Pavlovian attachment to clock speed. It was tantamount to trying to convince Ford to abandon its quest for more horsepower or telling Tiffany’s that carat size does not matter.

“We weren’t in the mainstream—clock speed was king and we were on the outside,” Israel’s Rony Friedman recalls.¹²

The head of Intel’s chip division, Paul Otellini, tried to mothball the whole project. The clock-speed doctrine was enshrined among Intel’s brass, and they weren’t about to hold a seminar to decide whether or not to change it.

The “seminar” is part of a culture that Israelis know well, going back to the founding of the state. From the end of March to the end of May 1947, David Ben-Gurion—Israel’s George Washington—conducted an inquiry into the military readiness of Jewish