SAN FRANCISCO -- The computer chip industry on Friday celebrated the 50th birthday of the integrated circuit, a breakthrough that set the stage for the Internet and the Digital Age.

A half-century ago a young engineer named Jack Kilby first demonstrated an integrated circuit he designed while working through the summer at his Texas Instruments job because he didn't have enough vacation time for a holiday.

Kilby used a sliver of conductive germanium to connect a transistor and other bits, dubbing the soldered assembly an "integrated circuit" (IC).

Engineer Robert Noyce was designing his own IC "in parallel" at Fairchild Semiconductor but didn't debut his creation until about six months later. Noyce went on to found US chip making giant Intel in 1968.

While Kilby was the first to demonstrate an IC, Noyce came up with a design that could be mass produced, according to Leslie Berlin, project historian for Stanford Silicon Valley Archives and author of a book about Noyce.

"It was an idea whose time had come," Berlin told Agence France-Presse. "There were efforts all over the world to make something like an integrated circuit."

History gives Noyce and Kilby shared credit for inventing the circuit that transformed the world of electronics.

"The IC was an idea so revolutionary, so life-changing, we don't even remember the world before it came along," Texas Instruments chief executive Rich Templeton said at a ceremony honoring Kilby.

"And we can't imagine life without it."

The year Kilby demonstrated his circuit, computers were colossal machines that filled rooms and were commanded by coded punch cards.

Televisions featured black-and-white pictures and few channels. The only telephones were wired in place. There were no iPods, flat-screen televisions, Internet searches or laptop computers.

Integrated circuits replaced vacuum tubes; bulky bulbs that guzzle electricity, spew heat and burn out.

The circuits became building blocks for microprocessors, the increasingly powerful and compact chips that are the brains behind the Internet and most of today's "smart" electronic devices.

"It's been only 50 years, but think of the dramatic improvements in everything we do around the world today," Intel spokesman Bill Calder told AFP.

"In the scheme of inventions, certainly the integrated circuit has to be one of the greatest inventions of our time. This world of bytes we live in today would not be possible without them."

Berlin says that integrated circuits are at the core of the microchip industry mantra of "smaller, faster, cheaper" and can likely be found in anything with an on-off switch.

Kilby was awarded a Nobel Prize in physics in 2000 for his invention. It is believed a Nobel Prize would have also been given to Noyce, who died in 1990 at the age of 62. Kilby was 81 when he died in 2005.

"The integrated circuit has proved to be the single most important driver of increased productivity and economic growth in history," said Semiconductor Industry Association president George Scalise.

"The integrated circuit provides the critical technology for countless electronic devices that enable people everywhere to lead more productive lives."

The semiconductor industry is on track to post $265 billion in sales this year, according to Scalise.

Templeton described Kilby as quick to credit successors for turning integrated circuits into the power driving Internet Age technologies.

It is said that Kilby responded to people making "a big fuss" over his work by quoting fellow Nobel Prize winner Charles Townes:

"When I hear that kind of thing, it reminds me of what the beaver told the rabbit as they stood at the base of Hoover Dam: 'No, I didn't build it myself, but it's based on an idea of mine.' "

Texas Instruments is planning a new research center to be christened "Kilby Labs."

"Jack Kilby was a hero, an artist, a philanthropist, a genius and a real believer in the power of the imagination," Templeton said.

"And his invention is a reminder of the responsibility that we, as engineers, have in making ours a better world."

When once asked by a mother what can be done to help children invent new things, Kilby reportedly replied "Read them fairytales."