The Semiconductor Company That Came From Another World: the Siliconix Story, Part 1

May 12, 2023

Starting in the 1940s, Bill Hugle and Frances Sarnat Hugle founded technology companies that drew them further and further into the semiconductor business. Together they kicked off the development of precision optical encoders, founded semiconductor makers Siliconix and Stewart-Warner Microcircuits, and developed semiconductor manufacturing equipment on both the east and west coasts of the US. Along the way, the couple endured many business reversals and enough legal and political intrigue to fill several lifetimes, yet their story is essentially untold. Until now.

If you look at the famous chart of early semiconductor makers created by Don Hoefler for SEMI, originally known as the Semiconductor Equipment and Materials Institute, you’ll spot two outliers early in the history of transistor and IC manufacturing. (Hoefler famously coined the term "Silicon Valley" when he wrote a multi-part article series for Electronic News in 1971 titled "Silicon Valley USA.") Those two semiconductor manufacturing outliers are Siliconix and Stewart-Warner Microcircuits. On Hoefler's chart, these companies seem to appear out of nowhere instead of spinning out of Fairchild Semiconductor, as did 24 other semiconductor companies on the chart. However, these two semiconductor makers did not appear out of nowhere. They exist because of a parallel chipmaking universe, one where Fairchild did not play such a major role in their creation.

In the genealogy of Silicon Valley startups, Siliconix and Stewart-Warner Microcircuits appear alone by themselves. Despite what it says on the chart, both were started by Bill and Frances Hugle. Image Credit: SEMI

This story starts in Chicago, near the end of World War II, and not in Silicon Valley. Bill Hugle and Frances Sarnat were sweethearts in High School and Bill proposed marriage months before they graduated in 1944. The two attended the University of Chicago together. Bill graduated from the university in March 1946 and Frances graduated three months later. Both received PhB (Bachelor of Philosophy) degrees in chemistry. They married in June 1947, about the same time that Walter Brattain and John Bardeen at Bell Labs built the first point-contact transistor. Bill started working as a chemist for the Linde Air Products Company in South Chicago one month after the couple married.

At that time, Linde was manufacturing uncolored artificial sapphires. The company developed that business during the war because gemstones were used as bearings in all sorts of mechanical instruments, dials, clocks, and watches. Starting in 1940, the United States government encouraged the development of domestic artificial gem manufacturing because the international supply chain for natural gemstones was becoming questionable as the war grew in Europe. Linde spent two years perfecting the manufacturing process for artificial sapphires, which melts naturally occurring corundum (aluminum oxide) crystals using high temperatures in a hydrogen/oxygen furnace to produce a gemstone ingot or boule.

Linde ran magazine advertisements as early as February 1943 with a headline that proclaimed "… and we made a sapphire." The ad's body text described the sapphire-making process and explained how the company spent two years developing the process. The main image in the ad showed a glowing boule of molten corundum inside of a hydrogen/oxygen furnace, and a promise of jewelry-quality gemstones in the future. A tag line that asked the reader to buy US war bonds and stamps appeared at the end of the ad. This advertisement predated the company's employment of Bill Hugle by more than four years.

Linde made artificial sapphires using a process developed in the 1800s called the Verneuil flame fusion process, which uses a controlled hydrogen-oxygen furnace to melt the crystalline material. Introducing the right amount of chemical impurities – titanium dioxide and iron to produce blue star sapphires or chromium to create rubies – adds color and character to the gemstones. Color and character aren't particularly important if you’re making gemstones for instrument bearings; in fact, Linde's advertisement claims that colorless sapphires make harder bearings, but these characteristics are extremely important when making artificial gemstones for jewelry.

In 1948, Frances and Bill Hugle founded Hyco-Ames in Chicago with initial financial backing from Frances's father Nathan Sarnat. The couple planned to make artificial gemstones for jewelry, specifically star sapphires and rubies. Meanwhile, Bill continued to work for Linde Air Products, so Frances became the company's Director of R&D and Bill became a "consultant" to the company. Frances designed and built an automated Verneuil flame fusion furnace to manufacture the gems.

The Hugles started looking for an investor to expand the startup business and found one: New York attorney and private investigator John G (Steve) Broady. In October 1948, Hyco-Ames became Stuart Laboratories and inherited the gemstone-making mission and equipment from Hyco-Ames. Bill resigned from Linde to become VP and General Manager at Stuart Labs. Frances became the company's Director of R&D. Broady became a company director. In February 1949, Bill, Frances, and Stuart Labs moved to a commercial facility in North Bergen, New Jersey.

Bill and Frances began taking graduate classes in crystallography and X-ray diffraction at the Polytechnical Institute of Brooklyn in preparation for improving the artificial gemstone manufacturing process. That same month, Steve Broady was famously indicted on wiretapping conspiracy charges. He and four of his employees are accused of participating in a wiretap swindle against Manhattan Borough President Hugo Rogers and stockholders of a Brooklyn automobile dealer. Broady was acquitted of the charges, but he was not out of the woods. It appears he and his employees also wiretapped the phones of multiple companies including Bristol-Meyers, E. R. Squibb, the Knoedler Art Galleries, and Pepsi-Cola's chairman of the board. He would eventually be convicted on wiretapping charges.

In November 1949, two significant events occurred in the Hugles’ gem-making endeavor. First, Stuart Labs succeeded in making jewelry-quality star sapphires. An end-of-year inventory listed "188 star rubies and 6000 carats of boule." Counterbalancing this good news, the US Patent and Trademark Office issued a patent for the artificial sapphire-making process to Linde Air Products that same month.

Stuart Labs started mass gemstone production in February 1950, and Linde filed a lawsuit for patent infringement against Bill Hugle one month later. By June, Stuart Labs's sales started to suffer because potential customers found out about the lawsuit. By the end of 1950 or the beginning of 1951, Stuart Labs ceased business due to lack of sales.

In defense of the patent suit, Bill Hugle's attorney argued that the Linde process patent was invalid because it was based on the Verneuil method, which was developed decades earlier, in 1883. The attorney also claimed that the Stuart Labs version of the process was vastly improved and produced superior synthetic gemstones of far better clarity than those produced at Linde.

The US District Court of New Jersey nailed the lid on this affair. In May 1951, the court found against Stuart Labs and for Union Carbide, which had absorbed Linde by this time. The court's findings were quite brief:

1. The Burdick and Glenn Patent No. 2,488,507 for making artificial sapphires was valid.

2. The Burdick and Glenn Patent No. 2,488,507 was infringed by the defendant, Bill Hugle.

Bill Hugle appealed the case, and the US Court of Appeals Third Circuit affirmed the lower court's decision a year later. However, by this time, Stuart Labs had already ceased to exist.

Although Stuart Labs was a catastrophic business failure, Frances and Bill Hugle gained a lot of valuable expertise from the venture. Germanium crystal growing, quite similar in concept to making boules of sapphire, was suddenly in demand by the exploding semiconductor industry. The Hugles had also learned a lot about annealing grown crystal boules to improve the material's characteristics. Further, they learned how to add precise amounts of impurities to crystals, which the semiconductor industry calls "doping," that's essential when creating n- and p-type semiconductor material for transistor and IC manufacturing.

Stuart Labs quickly morphed into Stuart Industries and began making non-gemstone crystals for companies in the electronics industry, including Standard Electronic Research Corporation (SERC), a New York maker of precision electronic instruments. At the same time, Bill and Frances started looking for a full-time employer.

The couple was committed to working together, so they wrote to several companies hoping to find positions for both spouses at the same time. They received rejection letters from IBM, Battelle Labs, Hughes Aircraft, and Texas Instruments, among others. None of these companies were willing to hire couples. Although it was left unsaid, it was rare at the time for companies to hire women engineers and scientists, single or otherwise. Nevertheless, in early 1953, despite the odds, the Hugles found a willing employer located in Cincinnati, Ohio.

The company that hired the Hugles was the DH Baldwin Piano Company, about which I’ve written before. Baldwin was one of the original purchasers of a Bell Labs transistor patent license, although the company never made transistors using those patents. By the early 1950s, Baldwin was building tube-based electronic organs based on a patented subtractive synthesis design created by Winston Kock. (See "The Transistor at 75: The First Makers, Part 2" and "Winston Kock: Right Place, Right Time, Right Idea.") The Hugles did not know it yet, but their work was about to go in an entirely different direction that would greatly aid them in their future semiconductor ventures.

Although they lived on the wrong US coast and perhaps were one or two decades early, the Hugles had already successfully implemented Silicon Valley's prime directive: Fail fast.

Note: This history of Frances and Bill Hugle is sparsely documented on the Internet, and this series of articles would not have been possible without the aid and assistance of the Hugles's grandson, Jake Loomis, and the founder of TechSearch, Jan Vardaman, who was instrumental in creating an IEEE Scholarship program in the name of Frances Hugle, which was funded in part by Jake Loomis's mother and Frances Hugle's daughter, Linda Hugle.