How Sony Mastered the Transistor
Last month’s AiSalon was quite fun. I had a good time moderating the panel, discussing the current AI market trend as well as things to come. We are doing another one on November 19th at Appier’s office in Taipei, featuring Jeffrey Abbott, GP at Blitzscaling Ventures. It would be fun to see you guys there.
At the end of World War II, Japan was at zero.
Then Godzilla came and made it Minus One.
In the wake of this ruin, an extraordinary company was founded. And through a series of fortuitous events, they came across an extraordinary technology.
The discovery of the first transistor set off a race around the world to produce and use it. What can it be used for? How do we manufacture it?
Amidst this race, this scrappy company - led by an extraordinary pair of founders - defied the odds and used the transistor to make a breakthrough radio.
In this video, we look at how Sony mastered the transistor.
Beginnings
I know the Acquired podcast did an episode on Sony's beginnings already. They did a great job, but stick around for this one.
Akio Morita and Masaru Ibuka first met in 1944. They had been assigned to a team to produce a heat-seeking missile - the Ke-Go - and save the country from a losing war.
Ibuka was then 37 years old. Taller and heavier, he wore thick glasses and spoke with a working class accent. He was the chief engineer of a company supplying vacuum tube-based voltmeters and radar frequency control devices for the military.
Morita was then 24 years old. Shorter, but thin and with an aristocratic side profile. He was then serving as a lieutenant in the Imperial Navy, a naval liaison officer.
Working on this missile project, the two men spent a great deal of time together. The project failed, but the two became friends.
When the Allies started bombing Tokyo, Ibuka relocated the company to an apple orchard in Nagano. After the war ended, Ibuka brought his seven engineers back to Tokyo and set up a little lab in a room on the third floor of the Shirokiya Department Store.
Return to Tokyo
Times were hard back then. The first autumn, they took rucksacks to the countryside to get rice and potatoes.
Ibuka - who long considered his greatest asset to be his team and worked hard to keep them engaged - paid his staffers out of his own pocket.
They thought about making anything from golf equipment to sweet bean soup. But they soon found work repairing old radios during the military era.
It got them featured in a column in the Asahi Shimbun newspaper, which caught the eye of Ibuka's former colleague, Akio Morita.
Morita reached out and the two rekindled their bond. Ibuka wanted Morita to come to Tokyo and join him, but since that was risky, Morita thought to split that with a part-time teaching job.
But then the American occupation General Headquarters or GHQ banned former military officers from teaching. That fateful decision let Morita go all in on working with his friend.
Tokyo Telecommunications
There was one more obstacle, Morita's family.
Morita's family ran one of Japan's biggest and oldest sake distilleries - been around for over 300 years. Akio's father took over the business while it was in a sorry state and built it up again.
Thusly, he groomed Akio - his first-born son and 15th generation heir - to eventually take over and run the business. But Akio wanted to be an engineer, building vacuum tube radios and dissembling appliances in his youth.
After a momentous meeting, the elder Morita agreed to - for now - release his son from the obligation to run the family business on a day-to-day basis. Though Akio did become its chairman and dutifully attended every board meeting.
The Morita family also agreed to invest what is said to be about $60,000 - which even for them was a lot of money - into the newly founded Tokyo Tsushin Kogyo Kabushiki Kaisha.
The name literally means "Tokyo Telecommunications Engineering Company".
Later, whenever the company sought more capital for growth, Akio did like as any good millennial does and went back to his parents for more money in exchange for stock. At one point, the family owned 17% of Tokyo Telecommunications.
The private funds of the Morita family plus the connections of the company's first president Tamon Maeda - who also happened to be Ibuka's first father-in-law - kept the little company alive where many other similar businesses died.
Morita and Ibuka
Morita and Ibuka worked well together. Correction. They were absolutely perfect for each other.
Both were extremely technical. I already established Ibuka to be a talented and creative engineer, but Morita was no chopped liver. He was a trained physicist who ghost-wrote a science column for the Asahi Shimbun in his early days.
Ibuka was 13 years the senior. Quiet but impulsive. A dreamer type with an idealistic vision. Maybe a bit naive. His goal in life was to make electronics for everyday people, but honestly he lacked a good sense for what those people wanted.
In the beginning before Morita arrived, Ibuka invented and tried to sell an electric rice cooker. It looked like a wooden tub and didn't cook rice well, which is a fairly important prerequisite. The company made a hundred and sold none of them.
Morita on the other hand is animated and energetic. He largely ran the business, and liked to move fast to make things happen. Morita is strict, but towards Ibuka he was astoundingly protective, saying:
> Ibuka is a such a warm and honest person, that I saw at once that I had to become tough and shrewd to protect him. My mission is to realize Ibuka's dream.
Without Morita, Masaru Ibuka would have never sold any of his inventions. And without Ibuka, Akio Morita would not have anything to sell. They really were perfect for each other.
And unlike another famous engineer-sales co-founder pair, people at Sony never recalled Ibuka and Morita fighting. It is a bond described as something like love.
Tape Recorder
The company started off producing whatever it could to survive.
One of their first successes was a vacuum tube-based voltmeter first invented by an engineer on their team. They sold maybe about 30 to 40 of these each month, which kept the doors open and the workshops busy.
The company also grew close ties with the broadcaster NHK, providing high quality broadcasting equipment and other professional equipment to replace that which had been lost in the war.
These projects kept food on the table, but Morita and Ibuka wanted more - a machine for the consumer, the ordinary man. During a visit to the GHQ, they came across a paper tape recorder used for radio transmission.
The team knew audio, and they felt that a tape recorder might be well received by the Japanese. They acquired a few patents, hired some engineers, and with the help of some nifty reverse-engineering, produced the G-type tape recorder.
Tape recorder performance heavily depended on the quality of the tapes. But plastic was then still hard to come by. So the team made magnetic tape from paper covered in iron oxide powders and lacquer.
In the beginning, they had people run back and forth across the paper with an hairbrush. The first tapes were so bad that you could not even hear someone say "Moshi Moshi" or "Hello" in Japanese. Not to mention the chonk baby weighed 35 kilograms and cost 170,000 yen or about $14,400 in today's dollars.
With the help of a trading company owned by the descendants of the Tokugawa Shogunate - yes, really - they sell their first tape recorder to an Oden shop in Tokyo station where it played a jingle to attract customers.
The Ministry of Justice bought the G-type in higher volumes, leading to new versions like the H-type and the more portable P-type. Morita, a talented salesperson, helped sell plenty of tape recorders to companies and government. But yet again, consumers spurned the big bulky machine.
Ibuka remained vexed. Whilst in an antiquities shop, he saw someone buy a carved ivory thingy that he felt was worthless, paying a crazy high price. Frustrated, he thought "Why would someone buy this when they can buy Japan's first tape recorder?"
The answer, of course, is obvious. The thing was too chonk and too expensive. It needed to get smaller and cheaper. But what technology can possibly help make that happen? Yeah, I wonder ...
Licensing the Transistor
Japanese companies in the early 1950s looking to get into transistors had two options.
The technology had to come from America, obviously. But from which American company? You can sign a patent licensing agreement with either RCA or Western Electric, Bell Labs' commercial telephone device subsidiary.
The first transistor that Bell Labs publicly announced in 1948 was the "point contact transistor". It can amplify signals like a vacuum tube can, but it turned out to be too unstable for commercial use.
Soon thereafter, Bell Labs' genius William Shockley announces the junction transistor, a more resilient and commercially viable transistor. RCA's physicists immediately recognize it as the one.
So RCA did their own crash program on transistor development and made rapid progress. One of their big successes involved a variant of the junction transistor first invented by GE, the alloy junction transistor.
You made it by heat-fusing or alloying two very small pellets of indium about a millimeter large on opposite sides of a thin slice of germanium. RCA improved GE's processes and made it more commercially viable.
By 1952, they started licensing their patents and holding symposiums to teach people how to make their transistors. RCA did this because it was their business model. Until 1957, they licensed their patents as part of a big expensive bundle, "package licensing".
Patent licensing as a business model incentivized RCA to also sell agreements to teach people how to use their technology. This made them the preferred licensor of transistor technology - some 80 companies attended their first symposium.
By contrast, Western Electric's main business was making telephone product. They were only licensing out the transistor technology because of their anti-trust agreement with the US Government. Such an agreement did not mean they had to teach people how to adopt said technology.
It reminds me of how Bell Labs treated Unix's early licensees. They just sorta threw it at people and said “Here, go nuts”. And kind of like the Unix situation, this turned out to be a blessing in disguise.
Western Electric
In 1952, Ibuka takes his first trip to the United States to check out the American tape recorder industry for learnings.
But while in New York City, he learns through a stockbroker friend Shido Yamada about the Western Electric transistor licensing opportunity. $25,000 US dollars paid upfront against future royalties for some transistor knowledge.
Why Western Electric and not RCA? Most likely, Ibuka just couldn't get in touch with them. Moreover, Tokyo Telecommunications probably would not have been able to afford the RCA package license anyway.
At the time, Ibuka knew as much about transistors as I know about European soccer, but he is immediately convinced that it is the next big thing. Ibuka reaches out to Western Electric. Suspicious, Western Electric asks for a lot of detailed information like company history and recent financial reports. But eventually he convinces them the sincerity of his outreach.
$25,000 happens to be a lot of money - about $300,000 today. Worse yet, you needed it in dollars at a time when US dollars were hard to come by in Japan. The government tightly controlled its disbursement.
Upon returning to Tokyo, Ibuka goes to MITI, Japan's top industrial policy body, for the money and was ridiculed. A small company with no experience even in making vacuum tubes. Why do they deserve the foreign currency for this?
A Risky Move
But Ibuka is undeterred. He has now come up with something to use the transistor technology for: Radios.
Radios small enough for a single person to even put in his pocket - "pocketable". Ibuka gets fired up over the idea and when he is like this no one can stop him.
In August 1953, Ibuka takes a risk and sends the charismatic Morita over to New York City to secure the license. Morita barely knows English.
But he is so persuasive and anxious to get going that Western Electric grants him a license, provisional to the Japanese government releasing the funds. Western Electric's VP of licensing Frank Mascarich recalled later:
> I wasn’t terribly pleased with the arrangement ... but he was so persuasive, and so anxious to proceed with his plans, and after all, it took considerable time and expense for him to travel to the United States from Japan, that I decided to give him some of the technical information so that he could take it back with him and immediately embark on his project to manufacture transistors.
Thusly, Morita came back with a few sample transistors, Germanium crystal, and a copy of the book "Transistor Technology", edited by members of Bell Labs.
In July 1953, even before Morita left for New York, Ibuka formed an elite five-person transistor task force led by Morita's brother-in-law, Kazuo Iwama.
Iwama grew up with Akio, their two families having known each other for a long time. Despite originally trained as a geophysicist, Morita had him join Tokyo Telecommunications soon after its founding.
35 years young, rational and very level-headed, he ran the tape recorder division before being switched into transistor production. He too knew nothing about transistors, but had the tremendous energy to go learn.
But first, MITI. MITI is obviously annoyed as heck that Tokyo Telecommunications signed a deal without first running it by them. However, Ibuka cannot be denied. He goes to MITI and lobbies the bureaucrats, concluding:
> "We intend to move forward with or without you ... but if you approve our deal with Western Electric and give us some development money, you will look smart!"
A change in leadership shifted MITI's opinion on the discretion, and they finally approved the funds in January 1954. Iwama and his team spent the time reading Shockley's 1950 book "Electrons and Holes in Semiconductors", and then the Bell Labs "Transistor Technology" book after that. Neither book was very useful.
As soon as MITI approved the funds, Ibuka and Iwama boarded a plane to New York to take the next step in transistor technology. Meanwhile, the rest of the team back in Japan starts cobbling together a primitive semiconductor manufacturing line - furnaces, crystal pullers for making crystal, assembly tools, and so on.
Learning It
Unfortunately, the transistor as transferred over from Western Electric was not good enough to be used in a transistor radio.
Western Electric originally thought Morita and Tokyo Telecommunications were going to use their transistors for hearing aids - a reasonable thought. Some of the first transistorized products were hearing aids.
Upon learning that Morita wanted to use it for a radio, they told him that twelve other licensees were then trying to make transistors capable of the higher frequencies for radios. None had yet succeeded.
Nevertheless, Ibuka and Iwama got on a plane and flew to Western Electric's transistor factory in Allentown, Pennsylvania. But there, faced with what it means to run a transistor business for the first time, Ibuka wondered if he might have gotten himself into a pickle.
But Iwama did his homework. He walked across the factory floor, taking in everything. Whenever he saw something of interest, he stopped and tried to ask about it in the best English he possibly could.
At night, he writes and sketches everything he possibly could remember. Pages of documents - referred to within the company as the "Iwama Report" - start flowing back to the team in Japan in February.
Until April 1954, Iwama visits several Western Electric, Bell Labs, and even Westinghouse transistor factories - eventually filling four folders with his letters. He and his team compared what they saw in the factory with what was laid out in the Transistor Technology book for clues.
Which Transistor?
What Tokyo Telecommunications was trying to build is a superheterodyne receiver. It works using the principle of the same name and is what all the modern FM radio receivers do.
A radio signal is put out by the radio station.
The superheterodyne receiver receives that signal, amplifies it, and then mixes it with another high frequency signal created by an oscillator.
The resulting mixed signal, called the Intermediate Frequency or IF, is more convenient to process and amplify before turned into an audio signal.
High frequency transistors are needed for the oscillator and mixer to create the Intermediate Frequency as well as to amplify the IF itself. The core issue in transistorizing the radio is creating those high frequency transistors with good yield.
Iwama had to decide which of the two existing variants of junction transistors to pursue: Alloy, which we discussed earlier, or grown junction transistors?
The junction transistor is a sandwich of three components - the emitter, base, and collector with the base in the middle. The PN junctions or barriers in between these areas give the junction transistor its name.
Pioneered by Bell Labs, the grown junction transistor produces the sandwich using the Czochralski process - where you pull out or "grow" a whole crystal out of its melt from a small seed.
By selectively adding dopants as we pull out the crystal, we can produce the transistor sandwich at the same time as the crystal.
During his visits, Iwama drew these crystal-pulling tools and how they carefully pulled the crystals out of the melt. He asked Western Electric for detailed schematics of the machines but was rebuffed. Sad.
The difficulty and cost in recreating the crystal-pulling machine forced Iwama to decide for the team to start making PNP Germanium alloy junction transistors.
Some of Tokyo's Telecommunications' first alloy junction transistors were completed in June 1954. A few were inserted into a prototype portable radio, but failed to make the cut. High frequency was not achieved.
Grown Junction
So what now? The Tokyo Telecommunications team went back to their notebooks.
If you recall, you make an alloy junction transistor by soldering two beads of Indium onto the sides of a crystal slab of Germanium. This particular arrangement got you a positive-negative-positive or PNP transistor.
It was theorized that it might be possible to achieve faster frequencies by reversing the polarities, so negative-positive-negative or NPN rather than PNP. This was based on the notion that negative charge carriers or electrons travel faster than positive ones, or electron holes.
At the same time, Iwama came to believe that the alloying process cannot be scaled to high volume production. His conceptual reasoning was that the grown junction process was simpler.
With that, you have one step, the crystal pull. By contrast, the alloy junction process had two: First the crystal pull and then the alloying of the beads onto the sides.
So the team shifted to making NPN Grown Junction transistors, which meant finding the right dopants to add to a growing Germanium crystal so to produce this unique NPN arrangement. The team tried adding many different dopant impurities to produce the right effect.
During this process, a scientist named Tetsuo Tsukamoto - a Japanese born in Taiwan - tried phosphorous and antimony, which failed. He then tried phosphorous and indium, a weird combination.
But amazingly, the resulting transistor had a higher frequency when tested. It was incredibly encouraging ... except Tsukamoto could not replicate the result despite how many more efforts.
Another team went to the library and found an early issue of the Bell System Technical Journal, the Bible of semiconductors, with an article saying that phosphorus doping did not work. It was incredibly discouraging for the team members, who saw Bell as the "voice of the gods".
Right then, Iwama dropped by to see on things. He listened to their efforts and the discovery of the Bell journal article ruling out Phosphorous and said:
> But I remember you said you succeeded once. I still hope you will succeed again. I will take all the responsibility, so don't worry if you use a little more time. Why don't you try again?
So Tsukamoto kept at it. Three weeks later in defiance of Bell's expectations, he discovered a phosphorous doping recipe that produced a suitably high frequency. Initial yields were at 5%. And to Western Electric's horror, Ibuka skipped a pilot plant and went straight to mass production.
The Transistor Radio
The 1954 news of Texas Instruments producing the first miniaturized transistor radio, the Regency TR-1, spurred the team at Tokyo Telecommunications to work even harder. Now, they knew that a radio was possible.
In early 1955, they completed their radio, the TR-55. It used five transistors, three were grown junction and two were alloy junction types. The grown transistors for the oscillators were still so unstable that factory workers had to pick the right one for each individual radio set.
In August that year, the TR-55 went on market in Japan only, selling for the equivalent of about $980. It did not sell that well at first. People docked the relatively weak sound compared to vacuum tube based radio receivers.
But in the summer of 1956, young people started warming up to the little device when they realized that the cost of its tiny battery was only a twentieth that of tube-based receivers. Improving transistorization resulted in smaller and more successful radios.
Later, they realized that Tokyo Tsushin or Tokyo Telecommunications did not make much sense as a name, especially in the United States. So they coined a new name for the product - and later the company - Sony.
Conclusion
In producing a proper transistor for a commercial transistor radio, Sony had to master both the theory and engineering.
Even the Bell Labs' famous "cookbook" was not detailed enough for Sony to reproduce a semiconductor line. They had to send one of their own to the United States to review and document everything. Yes, in some ways you can say they copied the Americans.
But mere copying wasn’t enough. They still had to dissemble what they thought they knew and go back to basic first principles. Iwama's decision to scale grown junction rather than alloy junction. The realization to switch to NPN rather than trying to make PNP work.
These are not possible without thoroughly understanding semiconductor physics. When you are breaking new ground in electronics at commercial scale, this mix of theory and practicality is necessary to succeed. And a lot of sweat, blood and tears of course.