In 1969, Busicom was a relatively small Japanese manufacturer of electronic and mechanical calculators. It had two calculator factories; the Nippon Calculator Machine Corporation, which made small machines and the Electro Technical Industries Corporation of Tokyo, which made scientific calculators and specialised office equipment.
In order to try and reduce its costs, the company was looking for a basic design that could be used across its entire range of products. This did not prove to be possible and in the end Busicom allied itself with two new companies, Mostek, for the small business calculators and Intel for the ETI machines.
At this time Intel had been in existence for less than one year and was concentrating its efforts on the manufacture of memory and custom logic chips. Initially Ted Hoff was in charge of the project at Intel, he thought that the designs produced by Busicom were too complex and expensive to produce.
Ted Hoff had previously worked with a DEC PDP-8 and had been impressed by the power of such a machine which traded a minimal instruction set and hence complexity against a relatively large memory. He saw the possibility of duplicating this in the Busicom application and thus taking advantage of Intel's strength in the field of memory chips and overcoming their comparative weakness in chip design.
In August 1969 he put forward a proposal to build a computer programmed to behave as a calculator and this was accepted. Later in the year he had a preliminary design for four chips, 4001 (two kilobit read-only memory), 4002 (320 bit random access memory), 4003 (10 bit shift register), 4004 (four bit central processing unit).
In April 1970, Frederico Faggin was hired to take over the project, which by then was making little progress. By March the following year (1971), full chip sets consisting of four 4001s, two 4002s, two 4003s and one 4004 were sent to Busicom for testing and a year later, Busicom began the manufacture of machines based on this chip-set.