Kilby Microchip Valued as Much as $2 Million Doesn’t Sell

A 1958 microchip prototype designed by Nobel Prize-winning engineer Jack Kilby that was valued as much as $2 million failed to sell at a Christie’s auction.

The highest bid was $850,000 in today’s sale in New York, failing to reach the “reserve price,” or the agreed-upon price between the sellers and the auction house. The glass-mounted tiny metal chip had an estimated range of $1 million to $2 million.

“Despite much pre-sale interest, bidding did not reach the reserve, so the item did not find a buyer today,” Sung-Hee Park, a Christie’s spokeswoman, said in an e-mail. It’s possible the microchip could be included in a future auction or in a private sale, she said.

The potential buyer pool in this price range is shallow because the cost is out of reach for most museums, Dag Spicer, a senior curator at the Computer History Museum in Mountain View, California, said in an interview before the auction.

“That price is in the stratosphere,” he said yesterday. “I was scratching my head about who might be a potential buyer.”

Kilby, who died in 2005, used the chip to demonstrate his invention of the integrated circuit when he worked at Texas Instruments Inc. (TXN)

“You can think of it as the birth certificate of computing,” James Hyslop, a science specialist at Christie’s, said before the auction. “The microchip is one of the most important steppingstones to creating modern computers.”

Vintage Technology

Christie’s auctioned the microchip, another prototype and a document written by Kilby’s team member Tom Yeargan. Yeargan’s family owned the set, which has never been up for auction.

Demand has increased for vintage technology in general. An original Apple-1 computer from 1976 sold last July for almost $388,000 in a Christie’s online auction. Another Apple-1 was sold in May for a record $671,400 by a German auction house.

“Those things were available on EBay for about $30,000 as recently as five years ago and now they’re commanding 15 to 20 times that,” Spicer said.

At Christie’s today, an Apple-1 motherboard from 1976 that was sold by a California computer store owner fetched $87,500. It was estimated at $80,000 to $120,000.

Stamp Record

The auction market has been strong overall as international buyers spend billions of dollars for art, wine and other collectibles. Former Manchester United Manager Alex Ferguson sold HK$29.5 million ($3.8 million) of his wine collection at Christie’s in Hong Kong in May. Auction houses in New York sold a record $2.2 billion of modern, Impressionist, postwar and contemporary art last month.

An anonymous buyer on June 17 set a stamp record with the $9.5 million purchase of a one-cent postage from 1856 sold by Sotheby’s in New York.

The auction house in a statement called it “the world’s most famous stamp.” At almost one billion times its original face value, the penny stamp is easily the most expensive postage ever.

Kilby received the Nobel Prize in physics in 2000 along with Herbert Kroemer of Germany and Zhores I. Alferov of Russia, according to the Nobel Prize’s website. Robert Noyce, an entrepreneur and co-founder of Intel Corp., co-invented the integrated circuit.

(An earlier version of this story corrected the spelling of Kilby's name in the headline.)

To contact the reporter on this story: Meghan Morris in New York at mmorris109@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net Mary Romano, Pierre Paulden

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