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In the last twenty-five years the performance of integrated circuits has improved by more than three orders of magnitude and the unit cost has been reduced by approximately the same factor. This paper describes the evolution of semiconductor logic technology in IBM from its early replacement of vacuum tubes in the mid-1950s to the beginnings of VLSI. It highlights the major challenges and accomplishments in the development of bipolar and field-effect transistor technologies and their embodiment in components for a wide spectrum of IBM products.