The first people to make wooden holders for black graphite pencils were an Italian couple, Simonio and Lyndiana Bernacotti, sometime around 1560. They were carpenters and they used juniper wood to make a compact, flat pencil.
Shortly after a better way was found using two semi-circles of wood, which were glued together. This is basically the same method that is still used today. The two methods are shown in the drawings below.