Dado Banatao: Founding Father of PC Hardware

(2nd of two parts)

The Science and Technology Advisory Council (STAC) Silicon Valley-San Francisco Chapter was formally organized months after the third run of the Department of Foreign Affairs (DFA) Dialogue on Science and Technology Projects. It was held at the University of San Francisco (USF) in April 1990 after similar events in the East Coast.

Diosdado “Dado” Banatao was initially hesitant in leading it, understandably because of his experience as a basic education student in Iguig, Cagayan (from barrio grade school to the Jesuit-led critical thinking city high school years) grappling with the political governance structure for lifting Filipinos from poverty.

Moreover, he had just been introduced at the USF April event to the long-term interest of the new government’s top leadership in STEM (science, technology, engineering, and mathematics).

A few months after the USF Dialogue, Dado eventually visited the DFA office in Manila “on a business trip.” He was thoroughly briefed by the DFA’s new office responsible for increasing diaspora assistance for economic recovery, partly through United Nations Development Programme funding of expatriate STEM experts. Discussions were arranged with representatives of Cabinet-level secretaries, including the Department of Science and Technology (DoST), other officials active in a Coordinating Council for S&T across economic sectors and government agencies, plus private sector representatives.

Dado must have been convinced about the serious interest of those leaders, including some in Philippine diplomatic posts, in pursuing his own path. On Nov. 16, 1991, a year after the Manila visit, Philippine Ambassador to the US Emmanuel Pelaez supported a STAC awareness and fund-raising dinner at the Atherton residence of the Banataos in California.

The August 1990 conversations were designed by the DFA with Dado’s guidance — that those discussions be with “less the politicians, and more of the academics, industrialists, and community leaders” seriously interested in the new direction of the economy. That, too, was Dado’s premise for his support to STAC’s role in rebuilding the country that matched his own sequential pathway: education, innovation, technopreneurship, and economic transformation.

PATHWAY TO NATION-BUILDING
During the same visit, Dado discussed potential business for his microelectronics firms established in the 1980s. That sealed his systemic, long-term view and interest in the initial two steps combined in this pathway — education before innovation.

These were executed through scholarships for Filipinos in the US and the Philippines, assistance in setting up of the Engineering Research and Development for Technology (ERDT) of the DoST in 2007 (to increase STEM grads with PhD and MS), training programs of Deans of Philippine engineering schools thereafter for practical applications (2011-15), and incubators in schools (including the AIM Banatao Incubator launched 2017).

These sparked more successful breakthrough startups in the country by the second decade of the new millennium — with lessons from his own 1980s experiences. These also spurred some Philippine business leaders to invest in his firms, building on the late 1980s successes of Chips and Technologies design of simpler chipset vs. complex IBM motherboards, and S3 Graphics accelerators.

These formed the last two steps of Dado’s pathway: “technopreneurship” and nation-building mission through economic transformation for poverty eradication.

The movers and shakers of the Philippine private sector took an active interest in his paradigm. A project of the US foundation of the Ayala group led to the Philippine Development Foundation (PhilDev) with Dado and Maria its helm as co-founders. PhilDev incorporated business and social concerns on disruptive technologies through STEM scholarships, training in technopreneurship, university innovation centers, startup support, and women in tech programs.

But Dado was always the first one to tell his mentees that tech success is built on failing early.

FAILURE AND LESSONS IN 1ST STARTUP
While designing a simpler calculator for schools and business with the first single-chip 16‑bit microprocessor, Dado developed a deep understanding of system bottlenecks and insight into IBM’s architectural constraints. He thrived in a network of engineers and future co-founders of his own enterprises, sensing where the PC market was heading.

His first startup, Mostron (1984/85), failed because of its focus on creating capital-intensive and highly competitive motherboards for IBM (money and ideas constraints). He discovered hardware manufacturing was a low-margin, high-risk venture. Moving to higher-value semiconductor design, he shifted from building complete boards to designing the chipsets that powered them.

Mostron provided him with a strategic lesson: before founding a company, master the system you want to disrupt, not just invent a product — and build the network that will help you do it. His earlier plans were realized by gathering around him the right people for both ideas and funds.

Mostron’s failure revealed the real opportunity of his long-term path towards the chipset market where he made history. He failed early, but in a way that revealed the real opportunity was toward the chipset market — where he would make history. Internet connectivity has been converted from a luxury to a standard for businesses and homes.

GLOBAL IMPACT OF DADO’S INVENTIONS
At Chips and Technologies, Dado invented the first system logic chipset compatible with IBM PC/XT (PC with extension hard drive) and PC/AT (PC with advanced processor, and high-density floppy drives). In this way, he enabled clones to be built faster and cheaper, thus helping break IBM’s monopoly in the PC market.

At S3 Graphics, he pioneered the first Graphical User Interface (GUI) that revolutionized PC performance and dominated the graphics acceleration market, by anticipating the shift toward multimedia/visual computing. This eventually led to his consumerization of the declassified Global Positioning System, with chipsets used in every car phone and car navigation system, and eventually paving the way for Google Maps and ride-sharing apps that are used around the world today.

Dado’s three breakthrough inventions became foundational technologies that reshaped multiple industries as they enabled cheaper computing, mass-market PCs, and the rise of modern graphics-driven applications. They were:

1.) The world’s first single-chip 16-bit microprocessor-based calculator which reshaped electronics manufacturing, semiconductors, education, and business;

2.) the first single-chip PC chipset which reshaped personal computing, enterprise IT, manufacturing and supply chains, telecommunications and networking; and,

3.) the early graphics accelerator chips for the computing industry applications which reshaped software and operating systems; gaming industry; design, engineering, and architecture; and digital media and creative industries.

These are some reasons why billions of people continue to be affected by Dado Banatao today, including Bill Gates.

Dr. Federico “Poch” M. Macaranas, Ph.D. founded and led the Department of Foreign Affairs’ Science and Technology Advisory Council from 1988-1997. He was the chair of the Education Committee of the Management Association of the Philippines from 2023 to 2025. He is a board member of Bayan Innovation Group, Inc.

map@map.org.ph

fmmacaranas@gmail.com