ANDREW GROVE: A SURVIVOR’S TALE

BUDAPEST: DECEMBER 1956.

The Red Army had been streaming into the city for a month, brutalizing Hungary’s October revolution. The foggy nights, filled all fall with the sounds of ecstatic students, were now split with the jostle of machinery–10 divisions of Soviet tanks–and the uneven light of Molotov cocktails thrown through the rain. Fear blossomed in the dampness. The Premier vanished.

The boy–lean, strikingly handsome–hoped the tumult would pass. During the day he buried himself in schoolwork. Nights he passed at home. But over his books, across his strong Hungarian coffee, he heard rumors: the Russians were rounding up students. Children were disappearing. Trains were leaving for the frontier.

He longed to ignore the stories. He had already lived through the horror of the Nazis, outsmarting the SS, avoiding Budapest’s brownshirts. One day his mother had bundled him into the house of a “courageous acquaintance,” where they sweated out the pogroms of 1944. He saw his father return from the labor camps on the Eastern front, a proud, garrulous man shriveled by typhoid fever and chilled by pneumonia. Boys at school mocked him: before the war as a Jew, after the war because his father was a businessman (a dairyman, but that was enough). In his government file the boy was already an “enemy of the classes.” He wasn’t going to wait for the Soviets.

So he ran. With his best school friend he hopped a train westward, as close to the Austrian border as they dared. Twenty miles out they were tipped about police checkpoints ahead. The news was grim: the Russians were storming through the countryside, arresting everyone they could. The two would have to race the Red Army to the border. And since no one would guide them, they gathered the last of their money, the last of their courage, and bought directions from a hunchbacked smuggler who spoke of secret byways the Russians hadn’t yet discovered.

And so, hours later, he found himself facedown in a muddy field somewhere near the Austrian border–but how near? Soldiers marched by, dogs barked, flares lit the night. Then a voice cried out, in Hungarian, the words paralyzing him with fear: “Who is there?” Even 40 years later, as he laughs at the memory, his eyes harden; he shifts his neck under his collar. Had the smuggler betrayed him? “We thought, ‘Shit, this is it.'” The man shouted again. Now at the limits of his courage, the boy finally answered: “Where are we?” “Austria,” came the reply. The relief poured cool as the rain. Andras Grof, a name he would later Americanize to Andrew Grove, stood up and picked his way toward the future.

It is hard to define the components of greatness, but surely survival is among their number. And Andrew Grove has always been, if nothing else, a survivor. From that terrifying night (or a hundred equally terrifying nights spent eluding the Nazis), Grove, 61, has been pushed by a will to live as other men are fired by a taste for power or money. Intel, the firm that Grove built, has survived in one of the most tumultuous industries in history, emerging to become one of the most powerful companies of our age, with a stranglehold on one of the transformative technologies of the 20th century. And though Intel’s spotless clean rooms, its brilliant engineers and its bunny-suited workers seem far removed from that Austrian hillside, few places better reflect the sense of urgency with which the firm operates. Grove has it boiled down to a mantra that is as fresh as it is chilling: “Only the paranoid survive.”

Intel, of course, has done much more than survive. Founded in the summer of 1968 by Gordon Moore (one of the great chemists of the century) and Robert Noyce (a co-inventor of the integrated circuit), it has blossomed under Grove’s leadership into the world’s pre-eminent microprocessor manufacturer. From a standing start in 1981, when IBM introduced the first personal computers, they have populated the planet at an astounding rate. And of the 83 million machines sold this year, nearly 90% get their kick from an Intel chip. So do antilock brakes, Internet servers, cell phones and digital cameras. And who knows what products not yet invented will be powered by the chip 10, 20 years from now?

Intel has ceased being just a Silicon Valley wonder. It has become a weather vane for an entire digital economy, a complete ecosystem of drive manufacturers, software houses and Web programmers whose businesses depend on escalating PC growth. Because Grove and his firm control the blueprints of the PC, he is in the unique position of being able to tell customers what to do. Intel sets release dates for new chips, dictating the pace of the computer industry with the confident aplomb of fashion designers raising or lowering hemlines. It’s the sort of ironfisted market grip that rarely exists outside economics textbooks: one superefficient firm with monopoly-like returns gliding past competitors and, not incidentally, racking up huge profits. (Ten thousand dollars invested in Intel on the morning of Bill Clinton’s first Inauguration would be worth nearly $90,000 today.)

It has not been easy. A history of the semiconductor business reads like a chapter of the Iliad: Unisem, dead of obsolescence; Advanced Memory Systems, killed by management; Mostek, slaughtered in a Japanese RAM invasion. Intel has endured crippling chip recessions, one Federal Trade Commission probe and a nasty public flogging over its flawed Pentium chips in 1994. Now the prospect of cheaper computers using cheaper chips, not to mention the threat of economic troubles in Asia, looms. But no firm does more reliable (or profitable) work in the tiny molecular spaces that Intel has colonized. It is the essential firm of the digital age.

Grove’s dogma of relentless change and fearless leadership echoes from IBM in Armonk, N.Y., to the Great Hall of the People in Beijing. He is a perennial cover boy for the business magazines. Yet, he insists in his usual point-blank locution, “I haven’t changed.” He is a protective father of two daughters (he has asked us not to reveal their names or occupations), a spirited teacher (his Stanford business-school course is an annual sellout) and, almost incidentally, is worth more than $300 million. His 5-ft. 9-in. frame–honed by hourlong morning workouts, coiled by nervous energy–seems as tightly wired as one of his microprocessors.

At work he operates from the same kind of cubicle that everyone else at the company gets. (One perk: a view. Of the parking lot.) He keeps a support staff of three busy. He has developed his own special “mail codes”–f/u for “follow up”–that let him zip through his In box with special efficiency. A faithful assistant once put together a Grove-to-English dictionary for new assistants bewildered by the CEO’s avalanche of time-saving abbreviations.

Grove is not all work: he skis, bikes with his wife Eva, listens to opera. He occasionally breaks out into a wild, disjointed boogie (his kids call it groving instead of grooving and recall the time Eva snapped her ankle on their shag carpet as the two danced to the sound track of Hair). The dance step is typical: Grove is a passionate, if disjointed man. He is a famously tough manager who, late at night, can still fill Intel’s offices with a rolling laugh. He is a man who lost most of his hearing when he was young, but who soldiered through the toughest science classes flawlessly by lip reading and compulsive study. (His hearing would later be restored after five reconstructive operations over 20 years.) And though Grove says he is a “whiner” when it comes to minor ailments, he is a man who coldly eyed a diagnosis of prostate cancer, researched the options and ignored his doctors’ advice to pursue his own, so far successful, therapy. “Ruthless intellectual honesty” is the way friends describe Grove’s strongest characteristic. Andy has another word for it: “Fear.”

Andras Grof was born on Sept. 2, 1936, in Budapest, the son of George, the dairyman, and Maria, a bookkeeping clerk. His father, a gregarious, easygoing man with a strong, logical mind, left school early and taught himself business and accounting–everything he needed to know to run a small dairy service. Grove’s mother, a spare, lovely woman, raised him in their two-room 19th century apartment. From an early age Grove was marked as the son of a capitalist and as a Jew. His parents hoped that with hard work he could overcome the prejudices.

At age 4 he nearly died. Budapest was swept by a scarlet fever epidemic, and young Andras succumbed. He remembers waking up in the hospital and thinking to himself, “I’m dead. I’m in my grave looking up at the sky.” The fever left a mark: his eardrums were perforated like a colander, the result of a middle-ear infection.

What came next is the thing his daughters call “what Dad doesn’t talk about.” The rest of the world calls it World War II. Grove won’t discuss his life in Budapest during the war. And though he travels the world, he hasn’t returned to the city and swears he has “no interest in going back.” He recently ran into billionaire George Soros, who was also a Jew living in Budapest in 1941. Soros has called the years the most important of his life. Grove calls Soros “totally different from me in that respect.” The time, he insists, hasn’t marked him. But late at night, over Scotch and sushi–Grove is partial to eel–the stories slip out.

His father disappeared in 1941–just vanished after being drafted into a work brigade. What had happened? No one knew, but they did know that Jewish men around Eastern Europe were disappearing like a morning fog. Then in March 1944, the Germans occupied Budapest and, Grove says, “they began rounding us up. Not us, actually, because my mother and I were in hiding, but Jews. Jews they were rounding up.” He blinks and sips at his Scotch.

His eyes become brimful and wet. He speaks in his deliberate, still accented English: “I was eight years old, and I knew bad things were happening, but I don’t remember the details. My mother took me away. She explained to me what it meant that I would have a different name, that I cannot make a mistake, that I had to forget my name and that I couldn’t, if they said ‘Write your name,’ I couldn’t write it down.” He became Andras Malesevics. The Grofs, mother and son, living on stolen papers, pretended to be acquaintances of a Christian family. “They took us in at a very serious risk to themselves,” he says. His wife Eva glances across the table, uncertain about this new territory Andy is wandering into. “What happened to them?” she asks. “Did you lose contact with them?” He pauses. Shakes his head. “I don’t know. We didn’t know them that well, you know. That’s the strange thing.” Quiet settles over the table again. I ask, “But they did the right thing?” Grove offers a chilling display of his pragmatism. He looks at me, dry-eyed now: “They did the right thing because it worked. If they had got killed over it, it wouldn’t have been the right thing.”

For Grove, the right thing after the war was to try to fulfill his parents’ dream–his father, somehow, had survived the Eastern front–of his getting into college. Science was not his first passion. At 14 he joined a local youth newspaper and fell hard for the joys of journalism: writing, thinking, exploring. “I loved it,” he recalls–until a relative was detained without trial and Grove became persona non grata at the paper. Nearly 40 years later he wrote, “I did not want a profession in which a totally subjective evaluation, easily colored by political considerations, could decide the merits of my work. I ran from writing to science.”

In particular he ran to chemistry. His native curiosity made him a standout, especially after he discovered that he had an intuitive sense about molecules, an ability to mentally manipulate the tiny structures faster than most people could work them on slide rules and paper. “He was by no means a nerd,” recalls Janos Lanyi, his best friend and the man who ran for the border with him. Lanyi recalls days when the two would row out to the center of a country lake, fold in their oars and study science in the springtime sun. “He was very outgoing,” Lanyi says. “You could always hear him singing–in gym class, in lab.”

This was another Grove passion: opera. Seduced by Carmen’s “Toreador March” as a youngster, Grove dreamed of becoming an opera singer. He took lessons and sang around school. And in the weeks before he fled Hungary, Grove and a handful of classmates sang the first, murderously lovely scene of Don Giovanni in a Budapest recital. Grove can’t remember if he took the part of the footman Leporello (who beseeches, “Potessi almeno di qua partir!” [I wish I could escape!]) or the blackguard Don Giovanni (who bellows, “Misiero! attendi se vuio morir!” [Wretch, stay if you would die!]) in the performance. He took the Don’s advice.

When the Soviets entered Budapest, Grove knew that was the time to leave. “There were growing rumors of people being rounded up on the street,” he recalls. “I said, ‘I could sit on my ass here and go out for a loaf of bread one day, and you’ll never see me again. Or I can get out.’ In today’s terminology, one had an upside and the other didn’t.” Grove, not for the last time, bet his ass on the upside.

The young man made his way to New York City, where the apparent equality of American life astonished him. “I grew up to be 20 years old, and I was always told I was undesirable for one reason or another,” he says. “I got to the United States, and I expected there would be some of the same because I was an immigrant. And there wasn’t.” From his spot in a cramped one-bedroom apartment in Brooklyn, where he was housed by an aunt and uncle who had left Hungary in the ’30s, Grove devoured Eisenhower’s America.

He enrolled at City College of New York, a free school that had become a kind of immigrant Oxford. He tore through the place–nearly all A’s–and finished just shy of summa cum laude. (He totaled his car shortly after getting that news from a dean. “I got a C in Faulkner,” he explains today, still annoyed. “My third year speaking English, and I’m reading Faulkner!”) But when he graduated in 1960, the New York Times trumpeted the success. His professors knew they’d hear from him again. “I was a little astonished by that kind of ambition,” says Morris Kolodney, now 86, a CCNY professor who was Grove’s freshman adviser. “There’s some advantage in being hungry.”

He was also in love. His wife Eva, a refugee herself, recalls their first meeting at a New Hampshire resort where they both worked in the summer of 1957–he as a busboy, she as a waitress. Eva recalls the encounter (“He had a bad accent, even though he doesn’t think so!”) as a lightning bolt: “I walked into this room, and there were a bunch of guys. One shook my hand, and it was, you know, like shaking a limp fish. But then there was this really good-looking guy who shook my hand, and I was just like, wow!” She still smiles at the memory, rolls her blue eyes and swallows a giggle. In June 1958 they were married.

The two moved out to California, where Grove entered the Ph.D. program at the University of California, Berkeley. Again he was a star. When he graduated, he had the pick of American research corporations. Grove narrowed his choices: prestigious Bell Laboratories or Fairchild Semiconductor, a start-up staffed by a handful of brilliant engineers. Grove, who says he has “excellent antennae,” listened to the Berkeley buzz and came back with a sense of the future: Fairchild.

In the early 1960s, the computer industry was in the midst of a benign revolution–and Fairchild was a breeding ground for revolutionaries. Early computers were fast, but attempts to make them faster were running into a thermodynamic wall: every time you asked the computer to think harder, it got hotter, like a grad student sweating his orals. The heat came from vacuum tubes, which acted as giant on-off switches, holding and releasing electrical charges. (A central “computer” tallied up all the on-off signals as ones and zeroes, and translated the results into real mathematics.) But the tubes, which sucked up huge amounts of energy, represented a limit on the power of these early computers.

The logical solution was to replace the tubes: build a device that performed the same role–storing electrical charges–but that was less temperamental. The device was an electrical “switch” called a transistor, essentially a tiny electrical gate that controlled the flow of electrons that computers needed to do their math. Yet wrangling infinitesimally small electrons into place demanded phenomenally pure chemical surfaces. In the 1950s and ’60s this was an act of near alchemy, certainly beyond the capabilities of most scientists. What the world needed was a reliable base for these circuits. What would it be?

The answer, of course, turned out to be what gave Silicon Valley its name. Gordon Moore (who ran Fairchild’s research arm and later became Grove’s mentor as CEO of Intel) believed you could store those charges with an integrated circuit made by sandwiching metal oxide and silicon into an electrical circuit called an MOS transistor. Unlike trickier semiconductors, silicon is both a wonderful conductor of electrical charges and a nearly bottomless sink for heat, meaning it doesn’t melt down as you push electrons under its surface at nearly light speed. Because it is made from refined sand, silicon is abundant as the earth.

And, in MOS, unstable as hell. One day you’d run a voltage through a sample and see one thing; the next day you could run the same voltage through the same sample and get a different reading. It was a nightmare. Of course, if you could fix that little problem, you’d be onto something big.

On his first day of work, Grove knew exactly none of this. He merely wanted to make a good impression. Nervous? You can’t imagine. Here he was, trained as a fluid dynamicist and going to work in materials chemistry. (The math, everyone promised him, was pretty much the same.) Someone asked him to study the electrical characteristics of MOS. Grove delivered a sharp, comprehensive report. His bosses were impressed.

Grove and two colleagues he discovered in the company cafeteria–Bruce Deal and Edward Snow–then set out to make silicon usable. After months of work, they discovered that most of the MOS instability was traceable to an impurity–sodium–introduced when the chips were cured. Like a drop of lemon juice added to a cup of milk, sodium soured the precious semiconductors. The discovery solved a fundamental problem in materials science and set the stage for the semiconductor revolution. Grove and his team won one of the industry’s most prestigious awards for the work. At home, Eva got a hint that Andy might not be your ordinary Hungarian busboy. It was the kind of scientific triumph Grove craved–proof of the American meritocracy. At Fairchild, however, none of the suits cared.

By 1968, Noyce was fed up with Fairchild. The firm was blowing up: engineers were leaving, top execs didn’t understand the semi business, and science was being replaced by politics. Noyce phoned Arthur Rock, now the eminence grise of Silicon Valley investing, and told him that he and Moore wanted to start their own semiconductor company. Fairchild, he said, was finished. Rock (who holds nearly $500 million of Intel stock today) raised the money nearly instantly. Moore told Grove of the plan one day when they were at a conference in Boulder, Colo. The decision to join his bosses was made, Grove says, “almost instantly.” Someone suggested the name Integrated Electronics, which was shrunk instantly to Intel.

Intel did not enjoy an uninterrupted march to greatness. The problem wasn’t any lack of candlepower–Noyce, Grove and Moore were a dream team. The problem was the business itself. It kept changing. Just as Intel’s leaders decided the future was in, say, selling dynamic RAM (a kind of short-term computer memory), messages started trickling back that sales were tanking, customers were evaporating and, ahem, top management had better pick a new strategy. It was a miserable way to run a company: desperately leaping into lifeboats, always at the last possible moment. One night Grove dreamed he was being chased by a pack of wild dogs. “It was a pressure cooker,” he says.

But misery loved the company. The years of anguish produced rich rewards made possible by some neck-snapping breakthroughs. The key to the success dated back to an insight Moore had in 1965. Sitting down with a piece of log paper and a ruler, he drew a simple graph. On the vertical axis he tracked the growing complexity of silicon chips, along the bottom he ticked off time, and then he plotted the points out a few years. The resulting line, he saw, showed that chip power doubled roughly every 24 months, even as costs fell by half. The rule (amended to 18 months) became known as Moore’s law. Though it frustrates consumers–it’s the reason that $2,500 PC you bought will be obsolete in a year–the law has given Intel a road map, allowing the company to shift resources ahead of demand rather than jumping crazily after the fact.

Moore is a shy, methodical man. He has the careful outlook of someone who has spent his life trying to get molecules to behave. Early on Moore saw something special in the young Hungarian and decided to nurture it. In 1970, as the two were strolling through the zoo in Washington, D.C., Moore told Grove, “One day you’ll run Intel.” For the next two decades Moore shaped and polished Grove’s thinking about everything from plastic packaging to Japanese trade. “He was,” says Grove, “a father figure.” In 1979 Grove became president, and when Moore stepped down as CEO of Intel in 1987, Grove stepped up. (At 68, Moore still works three days a week but probably not for the money: he holds close to $7 billion worth of Intel stock.)

For all the fear it inspires in competitors, Intel looks harmless enough. The firm’s Santa Clara headquarters is an off-blue Dilbert maze, a land of cubicles, coffee cups and security badges. Bob Noyce, who died in 1990, smiles reassuringly from a 5-ft.-high black-and-white photo in the lobby. Inside, Grove and Moore work from 8-ft.-by-9-ft. cubicles accessible to anyone bold enough to wander by for a chat. There are no special privileges. If Grove rolls in late, he has to prowl Intel’s jammed lot looking for a space just like any shavetail engineer. Craig Barrett, 58, Intel’s president, sometimes shows up in lizard cowboy boots, often en route to his ranch in Montana from Japan or Malaysia. They are known universally as Andy and Craig. The just-folks culture did not originate at Intel–credit Bill Hewlett and David Packard–but Intel perfected the industrial-size version. Last winter the company announced that all its employees would begin to receive lucrative stock options. Already Intel has produced thousands of millionaires.

Do not confuse casual with unchallenging. Grove sets the tone, and it is always demanding. The people (mostly men) who work for him have inherited (and enforce) an engineer’s creed that brings a bloodless “just fix it” intensity to everything from human relations to fabrication. “When I was at Intel, one of the most important values was discipline,” says venture capitalist John Doerr, who worked for the firm for six years in the 1970s. “Andy Grove had no tolerance for people who were late or meetings that ran on without a purpose. It wasn’t that he was a hard ass; it’s just the nature of their business. There’s no room for error.”

For years Grove enforced that narrow margin with a quick, violent temper–the polar opposite of his mentor, Moore. New employees at Intel suspected it was a management trick: Andy getting mad to get results. What they discovered was that the anger was real. Grove had an internal code of excellence, and when someone didn’t live up to it, he hammered him. In 1984 FORTUNE named him one of America’s toughest bosses. Sometimes even he recognized that he had gone too far. “After I cooled down, I apologized,” he wrote of one ’80s encounter that had him bellowing at a manager. “But by then it was too late. A loyal, experienced and valuable manager had been so hurt that no apology could get through to him.”

But the merits of that no-b.s. culture became clear as the world around Intel began to crack. Starting in 1976, the firm sailed into one iceberg after another: weak demand for memory chips, factory problems, ruthless Japanese “dumping.” In 1981, when Intel steamed into yet another exhausting chip slowdown, Grove decided that instead of laying off employees he’d order Intel’s staff to work 25% harder–two hours a day, every day, for free. The “125% solution” turned Santa Clara into a sweatshop (a few particularly dyspeptic engineers took to wearing sweatbands to highlight the point), but Grove’s message was clear: Intel would do whatever it took.

The biggest iceberg came in 1994, when Intel released millions of flawed Pentium chips. The problem was small, an internal routing glitch that caused a mathematical error. Intel took solace from the fact that this occurred so infrequently that most users could leave their PCs on for years without running into a problem. Intel’s hyper-rational, Grove-trained engineers told concerned callers not to worry unless they were planning to sweat some advanced astrophysics problems that weekend. The callers hung up and dialed CNN. And the New York Times. And the Wall Street Journal. Grove, who was on a Christmas ski trip at the time, was floored. “He had really punched himself in the face,” says one of his daughters, who watched him grimly ride the lifts for three days. “We were all like, ‘This too shall pass,’ but he just went inside himself.”

After a weekend conferring with his top advisers, Grove decided to switch courses, and on Monday, with typical Intel discipline, he turned the company around. By the middle of the next week, Intel had agreed to spend $475 million to replace Pentiums. The company even offered in-home service. It was, says Grove, “a difficult education.” It also turned, perhaps, into a bonanza. Intel’s name became better known than ever. And once the firm agreed to replace any chips, customers began to appreciate its commitment to getting things right.

The real message was simpler: confronted with another disaster, Intel had survived. Again. It was as if Grove’s personality and the characteristics that had served him best over the years–courage in the face of fear, passion in the face of discomfort–had been transmitted like tiny electrons into the substrate of Intel’s tens of thousands of employees. Grove had saved the chip. Next it was time to save himself.

“Andy, you have a tumor.” He felt a warm unease. Grove is a steely man, but these weren’t words he had expected to hear at 58. Grove discovered in late 1994 that he had a tumor growing on the side of his prostate gland. It wasn’t immediately life threatening, but the doctors couldn’t seem to agree on a course of action.

Grove, the scientist, pursued one on his own. He hit the library. “I read until I found that when I picked up an article, I had read it,” he recalls. “I hadn’t done that much research since I got my Ph.D.” In the mornings Eva would drive to Stanford and copy the latest journals. At night Grove would paw the trove, looking for something new.

A doctor suggested surgery. Grove continued reading. “If this wasn’t your life here,” his wife said to him one morning as he pored over charts, “I’d say you were having fun.” Well, Grove was kind of having fun–his scientific mind was engaged by the prostate-cancer research. A second doctor offered another opinion: radiation-seed therapy. Grove kept reading. “You know,” says Eva, “I was surprised by how he reacted to the disease. Normally he’s a baby. Anytime someone has a headache, he’s saying, ‘Oh, it’s cancer.’ But this time it really was cancer. He was tough.” A third doctor, a third opinion: the best solution is to watch and wait. Grove listened to them all and then picked the course he’s chosen for years. “I bet on my own charts.”

Grove bet his life on a “smart bomb” of high-dose radiation, a new procedure that he felt offered the best chances. It seems to have put the cancer away for now. Grove won’t say he’s “recovered,” just that levels of the telltale prostate-specific antigen (PSA) in his blood have sunk.

The cancer, he insists, hasn’t changed him. But it has changed his life. Eating with Grove most days is like a trip to a vegan commune–tofu, veggies, five servings of fruit a day, a palmful of antioxidant pills. He continues to dig through prostate-cancer research and sits on the board of CapCure, Michael Milken’s prostate-cancer foundation. Last spring Grove uncovered a yet-to-be published study showing a link between calcium intake and the spread of prostate cancer to the rest of the body. He rushed to the CapCure doctors and persuaded them to reduce a longstanding recommendation to take calcium supplements. Who could argue with a man who was betting his life?

He has PSA tests every four months now. “It’s an unusual thing. Most cancers don’t have scorecards,” he says. “But here you go and give blood, and a day later, they tell you the rest of your life basically.” Andy Grove, face to face with death three times a year. Surely he must love this. “I worry about it the last month of the four. It’s not logical, but it’s very observable and real. When I enter the month of the test, my stress notches up. And then as I get closer, I get more nervous. And then when they draw the blood, it’s unimaginable–a new level of anxiety starts, and it continues until I get my results back.” The tests, so far, have yielded only one surprise: Andy Grove isn’t bloodless after all.

His children could have told you that years ago. Grove has always been fully flushed with fatherhood. “He was a wonderful father,” recalls his older daughter. Says his younger: “Being Andy Grove’s child isn’t for the faint of heart. But if you can roll with it, it’s great.” Case in point: Grove always worked to include the kids in his business travel. But he made the girls write reports on the countries they were visiting: Italy, Spain, England. A nickel a page. “That’s how we’d get our spending money,” recalls a daughter. “Luckily, my grandparents would kick in a little more.” Grove’s parents moved to the U.S. in 1965. His father died in 1987; his mother lives in California.

His marriage to Eva–the daughters call her “Eva the Saint”–has been the essential constant in Grove’s life. He is clearly still nuts about her. There is a world-worn gentleness in their touch. She takes care of him: lays out his breakfast, orders the small details of his life, helps him find whatever he needs. Grove’s big eyes–which in meetings can penetrate the skull of an unprepared executive at 50 ft.–are at their softest when he rests them on Eva.

The two of them are still trying to figure out what to do with all their money. The wealth is a surprise. Eva recalls the day when Grove got options in 1968: “I had higher hopes for Intel than he did. When he got his first options, I thought, ‘Hmm. If that gets to be $100, then…’ And he said, ‘Ach! It’s never going to be $100.” Try $10,000. The Groves today are worth north of $300 million.

He could almost not care less. Grove doesn’t spend his money on planes, giant homes or fast cars. He lives on a relatively modest scale. He and Eva plan to leave their daughters “comfortable,” but the bulk of his fortune will go to charity. The Groves have endowed 10 chemistry scholarships at CCNY, made contributions to prostate-cancer funds and supported the International Rescue Committee, which brought Grove from Vienna to America. (He still remembers the day the IRC representative in Manhattan sent him out on Fifth Avenue with a blank check to buy the best hearing aid he could find.)

Mostly, though, he continues to fret about Intel’s future. The firm faces dozens of challenges–from cheap PCs to antitrust investigations–and Grove is engaged in the meta-movements of the technology world more deeply than ever. Says David Wu, an analyst at ABN AMRO Chicago: “I used to have a lot of problems with Intel, but every time I asked them a question, they had already thought about it.”

Grove polishes Intel strategy twice a year with a half-day “state of the industry” report to Intel’s directors and top executives. After the presentation, the CEO submits to an intellectual firing squad led by the likes of Rock and Moore. Grove’s performances, say those who have seen them, are a mixture of showmanship and brainpower, as if Albert Einstein were guest host of the Tonight Show. “Andy thinks faster than most people, certainly than me,” says Rock, who has made billions betting on firms such as Intel and Apple. “I would hate to compete with Intel.”

So do Intel’s competitors. If Grove is tough on people inside Intel, he is brutal with competition. Intel’s current victims are Advanced Micro Devices and National Semiconductor, but no single firm poses much of a threat. Intel, says AMD CEO Jerry Sanders, makes it nearly impossible to get access to the big customers–Compaq, Dell, Gateway–that make for economies of scale. “That’s where Intel makes it tough,” says Sanders, another Fairchild alum. “In my view Intel goes right to the edge–and sometimes over it–to exclude people from providing chips to those guys.”

Grove has so effectively squashed the competition that his biggest worry isn’t the rumblings of AMD but the strategic risk of a slowing PC market. The hottest-selling PCs this year have been dirt-cheap, sub-$1,000 models. Growth there could wreck Intel’s business model. Says Drew Peck, an analyst at Cowen & Co.: “You can’t sell a $500 processor in a $1,000 PC.” And though cheap PCs are a tiny part of the overall market–businesses generally buy pricier PCs–Intel may be heading into a sea change. Intel’s buoyant stock is off 30% from its 52-week high (though it is still up nearly 100% in the past 18 months). Some analysts expect to see the stock at $100 a share in 1998, but many investors don’t understand Intel’s business. To them the $1,000 PC looks like death.

Grove, of course, sees it as an opportunity. He is in the midst of rejiggering Intel’s operating model so the firm can make money on sub-$1,000 PCs. That means taking more risks and finding new applications for Intel chips. Intel has also invested hundreds of millions to “seed” demand for PCs. The firm is betting on interactive multimedia (imagine watching the Super Bowl and clicking on a player to see his stats), cable modems that speed Internet delivery and audio software that makes your PC sound like the local THX multiplex. Grove has reviewed dozens of battle plans for the company and finds the same fault with them all: not radical enough.

As Von Clausewitz craved the decisive battle, Grove hungers for the decisive risk, the bet that will guarantee Intel’s future. “Are we missing something?” Grove mused one day this spring over a lunch of tofu and ketchup, settling his silverware into a moment of quiet. “Sometimes,” he says in a rolling baritone, “the risk of omission is greater than the risk of commission.”

There are other worries. The Federal Trade Commission launched a second probe of Intel this fall. Though the firm has escaped with a clean bill of health in the past, its dominant market share may look like a fat bull’s-eye to trustbusters. Intel’s close relationship with Microsoft–tech insiders refer to a WinTel duopoly–does seem to make competition more difficult. Grove, for one, isn’t slowing any plans because of the government. “We’re very careful,” he says, “and clean.”

Though no one talks of retirement (Grove considered it in 1987 but changed his mind), the CEO is building a management legacy. Last spring the company tapped Craig Barrett, a former Stanford materials-science professor and longtime Intel executive, as the new president and Grove’s successor. And behind Barrett is a chain of bright, driven engineers all lusting for the top spot. Meet intense contenders like Intel V.P.s Paul Otellini and Sean Maloney, and you’ll have little worry about a leadership vacuum. Chairman emeritus Moore sometimes comes to the office, looks around and says he sheepishly thinks, “I’m not sure I could get a job here today.”

For now, Grove isn’t going anywhere. He is as engaged as anyone else at the company. After 8 on most nights, after even the diehards have cleared out of the office, Grove’s cubicle still glows against the window. Rock, who has known Grove for 30 years, puts the persistent passion down to a calm inner knowledge. “Andy has been exactly the same person. He hasn’t changed. That’s the beauty of it. He has no airs.” That Grove could remain still in the midst of such a turbulent business is perhaps the best explanation of his success. Other companies chased fads or indulged their arrogance. Grove remained constant.

And vibrant. Grove is filled with laughter and an eager joy. He is a compassionate man, with a face that seems most relaxed when it’s tucked into a smile. His younger daughter recalls her disco-theme wedding reception last summer, when her dad grabbed her cape and a friend’s crown and headed out to the dance floor with a big Grove grin. There, in front of family and friends, was Andras Grof in a silver-lame cape and rhinestone tiara groving to Le Freak as around the world, Intel plants silently cranked away to his rhythm. What were the odds of that?

Back in his school days, when Grove was studying fluid dynamics, he might have been able to tell you. As a young chemist, Grove had to master probability theory–it was the only way to predict how some molecules and atoms will behave. One of the ideas that holds probability theory together is that it is possible to understand the odds of an enormously complex event as a series of yes-or-no questions. The theory works by taking the most complicated series of events and boiling them into binary choices: either this can happen or that can happen. This is called the binomial theory.

The binomial theory can, for instance, tell you the odds of one man flipping a coin 8,000 times and getting 8,000 heads–about 1 in 10 2400[exponent]. It’s a big number, but figure the odds on this: a young Hungarian boy either survives scarlet fever or he doesn’t. He either goes to a concentration camp or he doesn’t. He either escapes the Russians or he doesn’t. Grove, who believes he is good, also suspects he’s been amazingly lucky. And if you’re trying to understand why his power hasn’t bred arrogance, it’s because most of the time, when he takes a look at his life, Andy Grove thinks he’s the guy who flipped heads 8,000 times in a row.

“Lucky or good?” It’s one of the first questions you’ll get from Grove. He was lucky enough to escape Hungary; good enough to make it to the U.S. Lucky enough to find ccny; good enough to graduate first in his class. Lucky enough to join Intel; good enough to lead it to the top. Lucky enough to marry Eva and have two healthy daughters; good enough to raise them, dancing and smiling, into beautiful American women. That’s the kind of life it’s been. Andrew Steven Grove, TIME’s Man of the Year 1997: lucky, good, paranoid.

–With reporting by Daniel Eisenberg/New York

For more information, visit TIME’s Man of the Year Website at time.com