Microelectronics and Computer Technology Corporation [MCC]

By: Michael Frontain

Type: General Entry

Published: September 13, 2007

Updated: August 2, 2020

Microelectronics and Computer Technology Corporation, known as MCC, was a pioneering research consortium of technology companies located in Austin. In the 1970s Japan made substantial inroads into the world's economy. Japan's steel production, electronics manufacturing, shipbuilding, semiconductors, automobile production and other industries made remarkable gains, often at the expense of United States companies. Japan came under intense criticism in the U.S. and Europe for allegedly unfairly subsidizing commercial efforts and engaging in unfair trade practices. American business, in some cases, developed a "circle the wagon" mentality. The efforts of U.S. companies were limited, however, by strict anti-trust legislation that governed the actions of U.S. corporations.

One area of continued American dominance remained computers. While Japanese companies had made significant progress in semiconductors, U.S. industry analysts often berated Japanese efforts as merely advantages in production capability. They claimed that Japanese companies like Hitachi and NEC were copying U.S. designs and then gaining unfair advantage due to deceptive trade practices. They often pointed to the lack of Japanese leadership in areas like microprocessors, which were protected by American patent and copyright laws. Japanese success had come only in areas like memory chips, they argued, where brute-force manufacturing efficiency, combined with the lack of Japanese safeguards against dumping and other nefarious trading schemes, could allow the Japanese to gain advantage over the American companies who had invented the technologies. Regardless of the reason, American companies were losing the battle in many semiconductor areas, and that trend became a matter of national-security concerns as well as a threat to national pride. Americans remained confident, however, in their ability to maintain their lead in computer design itself.

It was with great alarm, then, that American computer companies received news of Japan's Fifth Generation Computer Systems project, announced in April 1982 by the Japanese Ministry of International Trade and Industry (MITI). MITI was the source, it was alleged, of Japan's unfair trade practices. It announced a ten-year, $850 million effort to bring together Japanese computer manufactures to leapfrog then-current technologies and produce a new type of computer to run Artificial Intelligence applications. The applications would include speech synthesis and recognition, image processing, learning and association, and the ability to draw inferences. Success in this effort would revolutionize the use of computers and lead to a fundamental shift in commercial and educational competition.

The American response was a combination of warnings of threats to national security, concerns about commercial self-interest and cries of jingoistic fervor. The response was mostly limited to the industry itself, academic centers and Washington, D.C. It was not an issue that generated a great deal of conversation among the general public. The response was enough, however, to launch a commercial program unlike any seen in America up to that time.

With great fanfare and open encouragement of the Department of Defense and the Justice Department, the Microelectronics and Computer Technology Corp. (MCC) was announced later in 1982 and held its first board meeting in February of 1983. The brainchild of William Norris, the legendary founder and visionary of Control Data Corporation, the company was designed to be a private-sector response to MITI's plans. The goal was not to produce a specific product. Rather, it was to form a research and development consortium that would combine the resources of the leading high-tech U.S. companies to produce breakthrough technologies that member companies could then bring back to their own labs and integrate into their product lines. Twelve companies, including DEC, Harris, Control Data, Sperry-Univac, RCA, NCR, Honeywell, National Semiconductor, Advanced Micro Devices, and Motorola, contributed money and personnel to get the effort underway. Chosen to lead the effort was Admiral Bobby Inman, former head of the National Security Agency under President Carter and Deputy Director of the CIA. Admiral Inman enjoyed a sterling reputation as one of the most effective public servants in Washington.

Member companies bought shares in MCC and chose to participate in one or more of four programs that covered seven main research areas; software technology, semiconductor packaging, VLSI computer-aided design, parallel processing, database management, human interfaces and artificial intelligence/knowledge-based systems. The commitment to participate was binding for a minimum of three years. Members were also encouraged to nominate personnel to make up the core of MCC's research and management teams. The initial budget for MCC's activities was estimated to be between $50 and $100 million per year, based upon how many members chose to participate in numerous projects. The effort was conceived to last approximately twenty years, an enormously long time in an industry that benchmarks its products in billionths of a second. Eventually, more than twenty companies joined MCC and later participants included Microsoft, Boeing, GE, Lockheed, Martin Marietta, Westinghouse, 3M, Rockwell and Kodak.

After the initial organization and funding efforts, the next step for MCC was to decide on the location for its labs. The obvious choices included Silicon Valley and the Route 128 corridor around Boston. These were the areas where the "new economy" high-tech firms had grown up. Other areas aggressively seeking to provide a home were the Research Triangle in North Carolina and several areas in Florida. In all, fifty-seven communities submitted bids to MCC touting their advantages and offering economic incentives. The city that won the prize was expected to gain innumerable benefits from the jobs created, the prestige of landing the project and the economic benefits of the numerous spin-offs that were predicted to occur. In addition to Austin, Dallas and San Antonio also made concerted efforts.

The fifty-seven contenders were narrowed to four finalists: San Diego, Atlanta, North Carolina's Research Triangle, and Austin. Upon failing to make the cut, San Antonio and Dallas promptly joined the Austin effort and began pushing the resources of the "Texas Triangle" that encompassed Houston, Dallas, San Antonio and Austin and included the premier universities in the area. Governor Mark White and San Antonio Mayor Henry Cisneros were considered particularly influential and effective lobbyists for the project.

The Austin incentive package to MCC included a subsidized lease at the Balcones Research Center, adjacent to the University of Texas at Austin Pickle Research campus, low-cost loans and reduced mortgage rates for personnel moving to Austin. The University of Texas and Texas A&M also agreed to substantially upgrade their computer science and electrical engineering departments. Austin was selected in July of 1983. Other contenders, most notably Atlanta and Mayor Andrew Young, publicly accused Austin of "buying the project". However, a transparent evaluation process, made public after the announcement, showed that Austin was the wide leader in "quality of life issues", in addition to offering a sound business-incentive platform.

Since MCC's charter called for the fruits of its efforts to be returned to its shareholders for integration into their products, it is almost impossible to quantify the achievements of the enterprise. There was no doubt that progress was made on a wide array of selected issues. Several large participants left after several years while more chose to join as the years went by. A common criticism of MCC by participating members concerned the transfer of the technology back to the shareholders. All companies seek to guard their proprietary information and some complained that it was difficult to work side-by-side with competitors, protect trade-secrets and fully enjoy the benefits of unhindered scientific exchanges all at the same time.

Likewise, the economic impact on Austin is difficult to quantify. Since MCC's founding, Austin has enjoyed a high-tech boom. IBM, Dell Computer, Texas Instruments, Tracor, Sun, Motorola, Intel, Advanced Micro Devices, Rolm, Tandem and many other companies have chosen to establish or expand operations in the Austin area. One of the most sought-after projects of the late 1980s, the Sematech semiconductor R&D consortium, also selected Austin as its home.

During its peak in the mid-1980s MCC employed almost 400 workers. Grant Dove became the second chief executive in 1987, and Craig Fields followed him in 1990. In 1991 Evolutionary Technologies became the first of MCC's seven spinoff companies. By the turn of the twenty-first century, however, advances in personal computers along with the expansion of the Internet were rendering MCC obsolete. In June 2000 the MCC board voted to dissolve the consortium. At that time it had fifty-eight employees, and the remaining shareholders consisted of 3M, Eastman Kodak, Hewlett-Packard, General Dynamics, Motorola, Lockheed Martin, NCR, Raytheon, Nortel Networks, SAIC/Telcordia Technologies, and Texas Instruments. Al Wargo functioned as the fifth chief executive. Formal papers seeking to dissolve MCC were filed in 2004.

As the energy business suffered from declining prices throughout most of the 1980s, the Texas economy had few bright spots. The emergence of a viable, growing high-tech climate was certainly among them. Winning projects like MCC and Sematech contributed immensely to the diversification of the Texas economy and the modernization of its image. This high-tech profile continued into the twenty-first century.

Austin Business Journal, October 29, 2004 (http://www.bizjournals.com/austin/stories/2004/11/01/story3.html?t=printable), accessed June 19, 2007. Peter Burrows, "MCC Digs Out of the 'Celestial Sandbox of Computer Science,'" Electronic Business, Vol. 18, No. 8 (May 18, 1992): 67–68. Jim Flint, "Admiral, I Wish We Had the Time," Forbes, Vol. 131, No. 9 (April 25, 1983): 76–78. Jan Johnson, "America Answers Back," Datamation, Vol. 30, No. 7 (May 15, 1984): 40–57. Vertical Files, Dolph Briscoe Center for American History, University of Texas at Austin. John Walsh, "Japan-U.S. Competition: Semiconductors are the Key," Science, Vol. 215, No. 4534 (February 12, 1982): 825–829.

Time Periods:

  • Texas Post World War II

The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this entry.

Michael Frontain, “Microelectronics and Computer Technology Corporation [MCC],” Handbook of Texas Online, accessed December 01, 2021, https://www.tshaonline.org/handbook/entries/microelectronics-and-computer-technology-corporation-mcc.

Published by the Texas State Historical Association.

September 13, 2007
August 2, 2020