Even so, the economy's slowdown almost killed Intel and led Grove to develop his theory of "strategic inflection points (SIPs)." According to the philosophy, every company occasionally faces do-or-die moments.

"It is a time in the life of a business when its fundamentals are about to change," Grove wrote in his book. "That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end."

Such an opportunity looked Grove squarely in the eye in the mid-1980s. Intel was attached to its computer memory chips, known as DRAMs. But the company watched warily as the market was invaded by sleeker and cheaper DRAMs manufactured by Japanese competitors who persisted in undercutting Intel's prices, trying to drive the company out of business.

Intel faced a SIP, and Grove had to make a decision. His choice eventually earned Intel a fortune and gave him a reputation as the managerial master of Silicon Valley.

Completely changing the face of Intel, Grove set his assembly line to produce microprocessors instead of simple memory chips. Intel soon came out with the 386 microprocessor, which became an instant hit. And by the mid-80s, the personal computer, or PC, was becoming mainstream. In 1981 IBM made the little-publicized decision to use Intel chips in its PCs. Now, as the computer age exploded, Intel began to take off--and the rest was history.

"It was the first time I was involved in a major strategic decision," Grove told USA Today in 1996. "From the DRAM situation, I learned more about how these things work, how I handle them and how I handle other people."

Grove capitalized on his mentor's "Moore's Law," which says that as silicon chips became smaller and smaller, companies will be able to produce more and more, and computers will run faster and faster.