Silicon Valley is a nickname for the southern portion of the San Francisco Bay Area of Northern California in the United States. It is home to many of the world's largest technology corporations, as well as thousands of tech startup companies. The region occupies roughly the same area as the Santa Clara Valley where it is centered, including San Jose and surrounding towns. The term originally referred to the region's large number of silicon chip innovators and manufacturers, but eventually came to refer to all high-tech businesses in the area, and is now generally used as a metonym for the American high-technology economic sector.
Silicon Valley is a leading hub for high-tech innovation and development, accounting for one-third of all of the venture capital investment in the United States. Geographically, Silicon Valley is generally thought to encompass all of the Santa Clara Valley, the southern San Francisco Peninsula, and southern portions of the East Bay region.
Origin of the term
The term Silicon Valley is attributed to Ralph Vaerst, a successful local entrepreneur. Its first published use is credited to Don Hoefler, a friend of Vaerst's, who used the phrase as the title of a series of articles in the weekly trade newspaper Electronic News. The series, entitled "Silicon Valley in the USA", began in the paper's January 11, 1971 issue. The term gained widespread use in the early 1980s, at the time of the introduction of the IBM PC and numerous related hardware and software products to the consumer market. The Silicon part of the name refers to the high concentration of companies involved in the making of semiconductors (silicon is used to create most semiconductors commercially) and computer industries that were concentrated in the area. These firms slowly replaced the orchards and related agriculture and food production companies which gave the area its initial nickname — the "Valley of Heart's Delight."
"Perhaps the strongest thread that runs through the Valley's past and present is the drive to "play" with novel technology, which, when bolstered by an advanced engineering degree and channeled by astute management, has done much to create the industrial powerhouse we see in the Valley today."
Stanford University, its affiliates, and graduates have played a major role in the development of this area. Some examples include the work of Lee De Forest with his invention of a pioneering vacuum tube called the Audion and the oscilloscopes of Hewlett-Packard.
A very powerful sense of regional solidarity accompanied the rise of Silicon Valley. From the 1890s, Stanford University's leaders saw its mission as service to the West and shaped the school accordingly. At the same time, the perceived exploitation of the West at the hands of eastern interests fueled booster-like attempts to build self-sufficient indigenous local industry. Thus, regionalism helped align Stanford's interests with those of the area's high-tech firms for the first fifty years of Silicon Valley's development.
During the 1940s and 1950s, Frederick Terman, as Stanford's dean of engineering and provost, encouraged faculty and graduates to start their own companies. He is credited with nurturing Hewlett-Packard, Varian Associates, and other high-tech firms, until what would become Silicon Valley grew up around the Stanford campus. Terman is often called "the father of Silicon Valley".
During 1955–85, solid state technology research and development at Stanford University followed three waves of industrial innovation made possible by support from private corporations, mainly Bell Telephone Laboratories, Shockley Semiconductor, Fairchild Semiconductor, and Xerox PARC. In 1969, the Stanford Research Institute (now SRI International), operated one of the four original nodes that comprised ARPANET, predecessor to the Internet.
- Social roots of information technology revolution
It was in Silicon Valley that the silicon-based integrated circuit, the microprocessor, and the microcomputer, among other key technologies, were developed. The region employs about a quarter of a million information technology workers. Silicon Valley was formed as a milieu of innovations by the convergence on one site of new technological knowledge; a large pool of skilled engineers and scientists from major universities in the area; generous funding from an assured market with the Defense Department; the development of an efficient network of venture capital firms; and, in the very early stage, the institutional leadership of Stanford University.
- Roots in radio and military technology
The first ship-to-shore wireless telegraph message to be received in the US was from the San Francisco lightship outside the Golden Gate, signaling the return of the American fleet from the Philippines after their victory in the Spanish–American War. The ship had been outfitted with a wireless telegraph transmitter by a local newspaper, so that they could prepare a celebration on the return of the American sailors.
The Bay Area had long been a major site of United States Navy research and technology. In 1909, Charles Herrold started the first radio station in the United States with regularly scheduled programming in San Jose. Later that year, Stanford University graduate Cyril Elwell purchased the U.S. patents for Poulsen arc radio transmission technology and founded the Federal Telegraph Corporation (FTC) in Palo Alto. Over the next decade, the FTC created the world's first global radio communication system, and signed a contract with the Navy in 1912.
In 1933, Air Base Sunnyvale, California, was commissioned by the United States Government for use as a Naval Air Station (NAS) to house the airship USS Macon in Hangar One. The station was renamed NAS Moffett Field, and between 1933 and 1947, U.S. Navy blimps were based there. A number of technology firms had set up shop in the area around Moffett Field to serve the Navy. When the Navy gave up its airship ambitions and moved most of its west coast operations to San Diego, the National Advisory Committee for Aeronautics (NACA, forerunner of NASA) took over portions of Moffett Field for aeronautics research. Many of the original companies stayed, while new ones moved in. The immediate area was soon filled with aerospace firms, such as Lockheed. On October 4, 1957 the Soviet Union launched the first space satellite, which sparked a fear that the United States would go to war with Russia. After President Eisenhower signed the National Aeronautics and Space Act (NASA), he turned to the only company in the world who were able to make transistors: Fairchild Semiconductor. The president funded their project. They were highly successful and their company was put on the map.
- Stanford Industrial Park
After World War II, universities were experiencing enormous demand due to returning students. To address the financial demands of Stanford's growth requirements, and to provide local employment opportunities for graduating students, Frederick Terman proposed the leasing of Stanford's lands for use as an office park, named the Stanford Industrial Park (later Stanford Research Park). Leases were limited to high technology companies. Its first tenant was Varian Associates, founded by Stanford alumni in the 1930s to build military radar components. However, Terman also found venture capital for civilian technology start-ups. One of the major success stories was Hewlett-Packard. Founded in Packard's garage by Stanford graduates William Hewlett and David Packard, Hewlett-Packard moved its offices into the Stanford Research Park shortly after 1953. In 1954, Stanford created the Honors Cooperative Program to allow full-time employees of the companies to pursue graduate degrees from the University on a part-time basis. The initial companies signed five-year agreements in which they would pay double the tuition for each student in order to cover the costs. Hewlett-Packard has become the largest personal computer manufacturer in the world, and transformed the home printing market when it released the first thermal drop-on-demand ink jet printer in 1984. Other early tenants included Eastman Kodak, General Electric, and Lockheed.
- Silicon transistor and the birth of Silicon Valley
In 1953, William Shockley left Bell Labs in a disagreement over the handling of the invention of the transistor. After returning to California Institute of Technology for a short while, Shockley moved to Mountain View, California, in 1956, and founded Shockley Semiconductor Laboratory. Unlike many other researchers who used germanium as the semiconductor material, Shockley believed that silicon was the better material for making transistors. Shockley intended to replace the current transistor with a new three-element design (today known as the Shockley diode), but the design was considerably more difficult to build than the "simple" transistor. In 1957, Shockley decided to end research on the silicon transistor. As a result of Shockley's abusive management style, eight engineers left the company to form Fairchild Semiconductor; Shockley referred to them as the "traitorous eight". Two of the original employees of Fairchild Semiconductor, Robert Noyce and Gordon Moore, would go on to found Intel.
- Law firms
The rise of Silicon Valley was also bolstered by the development of appropriate legal infrastructure to support the rapid formation, funding, and expansion of high-tech companies, as well as the development of a critical mass of litigators and judges experienced in resolving disputes between such firms. From the early 1980s onward, many national (and later international) law firms opened offices in San Francisco and Palo Alto in order to provide Silicon Valley startups with legal services. Furthermore, California law has a number of quirks which help entrepreneurs establish startups at the expense of established firms, such as a nearly absolute ban on non-compete clauses in employment agreements.
- Venture capital firms
By the early 1970s, there were many semiconductor companies in the area, computer firms using their devices, and programming and service companies serving both. Industrial space was plentiful and housing was still inexpensive. The growth was fueled by the emergence of the venture capital industry on Sand Hill Road, beginning with Kleiner Perkins in 1972; the availability of venture capital exploded after the successful $1.3 billion IPO of Apple Computer in December 1980.
- The rise of software
Although semiconductors are still a major component of the area's economy, Silicon Valley has been most famous in recent years for innovations in software and Internet services. Silicon Valley has significantly influenced computer operating systems, software, and user interfaces.
Using money from NASA and the United States Air Force, Doug Engelbart invented the mouse and hypertext-based collaboration tools in the mid-1960s, while at Stanford Research Institute (now SRI International). When Engelbart's Augmentation Research Center declined in influence due to personal conflicts and the loss of government funding, Xerox hired some of Engelbart's best researchers. In turn, in the 1970s and 1980s, Xerox's Palo Alto Research Center (PARC) played a pivotal role in object-oriented programming, graphical user interfaces (GUIs), Ethernet, PostScript, and laser printers.
While Xerox marketed equipment using its technologies, for the most part its technologies flourished elsewhere. The diaspora of Xerox inventions led directly to 3Com and Adobe Systems, and indirectly to Cisco, Apple Computer, and Microsoft. Apple's Macintosh GUI was largely a result of Steve Jobs' visit to PARC and the subsequent hiring of key personnel. Cisco's impetus stemmed from the need to route a variety of protocols over Stanford's campus Ethernet.
- Internet bubble
Silicon Valley is generally considered to have been the center of the dot-com bubble, which started in the mid-1990s and collapsed after the NASDAQ stock market began to decline dramatically in April 2000. During the bubble era, real estate prices reached unprecedented levels. For a brief time, Sand Hill Road was home to the most expensive commercial real estate in the world, and the booming economy resulted in severe traffic congestion.
After the dot-com crash, Silicon Valley continues to maintain its status as one of the top research and development centers in the world. A 2006 The Wall Street Journal story found that 12 of the 20 most inventive towns in America were in California, and 10 of those were in Silicon Valley. San Jose led the list with 3,867 utility patents filed in 2005, and number two was Sunnyvale, at 1,881 utility patents.
According to a 2008 study by AeA in 2006, Silicon Valley was the third largest high-tech center (cybercity) in the United States, behind the New York metropolitan area and Washington metropolitan area, with 225,300 high-tech jobs. The Bay Area as a whole however, of which Silicon Valley is a part, would rank first with 387,000 high-tech jobs. Silicon Valley has the highest concentration of high-tech workers of any metropolitan area, with 285.9 out of every 1,000 private-sector workers. Silicon Valley has the highest average high-tech salary at $144,800. Largely a result of the high technology sector, the San Jose-Sunnyvale-Santa Clara, CA Metropolitan Statistical Area has the most millionaires and the most billionaires in the United States per capita.
The region is the biggest high-tech manufacturing center in the United States. The unemployment rate of the region was 9.4% in January 2009, up from 7.8% in the previous month. Silicon Valley received 41% of all U.S. venture investment in 2011, and 46% in 2012.
- Adobe Systems
- Advanced Micro Devices (AMD)
- Agilent Technologies
- Apple Inc.
- Applied Materials
- Brocade Communications Systems
- Cisco Systems
- Electronic Arts
- Juniper Networks
- KLA Tencor
- Lockheed Martin
- LSI Logic
- Marvell Semiconductors
- Maxim Integrated Products
- National Semiconductor
- Oracle Corporation
- Western Digital Corporation
Additional notable companies headquartered (or with a significant presence) in Silicon Valley include (some defunct or subsumed):
- 3Com (acquired by HP)
- Actuate Corporation
- Aeria Games and Entertainment
- Akamai Technologies (HQ in Cambridge, Massachusetts)
- Amazon.com's A9.com
- Amazon.com's Lab126.com
- Broadcom (headquartered in Irvine, California)
- BEA Systems (acquired by Oracle Corporation)
- Cypress Semiconductor
- Dell (headquartered in Round Rock, Texas)
- EMC Corporation (headquartered in Hopkinton, Massachusetts)
- Extreme Networks
- E*TRADE (headquartered in New York, NY)
- Fairchild Semiconductor
- Foundry Networks
- Fujitsu (headquartered in Tokyo, Japan)
- Groupon (headquartered in Chicago, IL)
- Hitachi Data Systems
- Hitachi Global Storage Technologies
- IBM Almaden Research Center (headquartered in Armonk, New York)
- Intuitive Surgical
- Kerio Technologies
- Maxtor (acquired by Seagate)
- McAfee (acquired by Intel)
- Memorex (acquired by Imation and moved to Cerritos, California)
- Micron Technology (headquartered in Boise, Idaho)
- Microsoft (headquartered in Redmond, Washington)
- Mozilla Foundation
- Move, Inc.
- Nokia (headquartered in Espoo, Finland)
- Nokia Solutions and Networks (headquartered in Espoo, Finland)
- NXP Semiconductors
- Nook (subsidiary of Barnes & Noble)
- Olivetti (headquartered in Ivrea, Italy)
- Opera Software (headquartered in Oslo, Norway)
- Palm, Inc. (acquired by HP)
- Panasonic (headquartered in Osaka, Japan)
- PayPal (now part of eBay)
- Qualcomm, Inc. (HQ in San Diego, CA)
- Quanta Computer
- RSA (acquired by EMC)
- Samsung Electronics (headquartered in Suwon, Korea)
- SAP AG (headquartered in Walldorf, Germany)
- Siemens (headquartered in Berlin and Munich, Germany)
- Sony (headquartered in Tokyo, Japan)
- Sony Ericsson
- SRI International
- Sun Microsystems (acquired by Oracle Corporation)
- Synopsys Inc.
- Tata Consultancy Services (headquartered in Mumbai, India)
- Tibco Software
- Tesla Motors
- VA Software (Slashdot)
- Veritas Software (acquired by Symantec)
- WebEx (acquired by Cisco Systems)
- @WalmartLabs (acquired by Walmart Global eCommerce)
- YouTube (acquired by Google)
- Yelp, Inc.
Notable government facilities
- Moffett Federal Airfield
- NASA Ames Research Center (Located inside Moffett)
- Onizuka Air Force Station
Depending on what geographic regions are included in the meaning of the term, the population of Silicon Valley is between 3.5 and 4 million. A 1999 study by AnnaLee Saxenian for the Public Policy Institute of California reported that a third of Silicon Valley scientists and engineers were immigrants and that nearly a quarter of Silicon Valley's high-technology firms since 1980 were run by Chinese (17 percent) or Indian CEOs (7 percent).
The following Santa Clara County cities are actually located in the Santa Clara Valley and based on that status are traditionally considered to be in Silicon Valley (in alphabetical order):
The following Bay Area cities are (or were) home to various high-tech companies (or related firms like venture capital firms) and have thereby become associated with Silicon Valley:
- Belmont (San Mateo County)
- Burlingame (San Mateo County)
- East Palo Alto (San Mateo County)
- Emeryville (Alameda County)
- Foster City (San Mateo County)
- Fremont (Alameda County)
- Menlo Park (San Mateo County)
- Millbrae (San Mateo County)
- Newark (Alameda County)
- Oakland (Alameda County)
- Redwood City (San Mateo County)
- San Bruno (San Mateo County)
- San Carlos (San Mateo County)
- San Francisco (San Francisco County)
- San Mateo (San Mateo County)
- San Ramon (Contra Costa County)
- Santa Cruz (Santa Cruz County)
- Scotts Valley (Santa Cruz County)
- South San Francisco (San Mateo County)
- Union City (Alameda County)
Universities, colleges, and trade schools
- The Art Institute of California – Sunnyvale
- California College of the Arts
- Carnegie Mellon University (Silicon Valley campus)
- California State University, East Bay, Hayward
- Cañada College
- Chabot College
- Cogswell Polytechnical College
- De Anza College
- Evergreen Valley College
- Foothill College
- Golden Gate University Silicon Valley Campus
- Hult International Business School
- International Culinary Center
- International Technological University
- John F. Kennedy University Campbell Campus
- Lincoln Law School of San Jose
- Menlo College
- Mission College
- Northwestern Polytechnic University (Fremont)
- National Hispanic University
- Notre Dame de Namur University
- Ohlone College
- Peralta Colleges
- Saint Mary's College of California
- San Jose City College
- San José State University
- San Francisco State University
- Santa Clara University
- Silicon Valley University
- Stanford University
- University of California, Berkeley
- University of California, Santa Cruz, Silicon Valley Extension Campus
- University of San Francisco South Bay Campus
- West Valley College
Local and national media cover Silicon Valley and its companies. CNN, The Wall Street Journal, and Bloomberg News operate Silicon Valley bureaus out of Palo Alto. Public broadcaster KQED (TV) and KQED-FM, as well as the Bay Area's local ABC station KGO-TV, operate bureaus in San Jose. KNTV, NBC's local Bay Area affiliate "NBC Bay Area", is located in San Jose. Produced from this location is the nationally distributed TV Show "Tech Now" as well as the CNBC Silicon Valley bureau. San Jose-based media serving Silicon Valley include the San Jose Mercury News daily and the Metro Silicon Valley weekly. Specialty media include El Observador and the San Jose / Silicon Valley Business Journal. Most of the Bay Area's other major TV stations, newspapers, and media operate in San Francisco or Oakland. Patch.com operates paloalto.patch.com, mountainview.patch.com and others, providing local news, discussion and events for residents of Silicon Valley.
- List of attractions in Silicon Valley
- List of places with "Silicon" names
- List of research parks around the world
- List of technology centers around the world
- Appearances in media
- Pirates of Silicon Valley — 1999 movie
- Triumph of the Nerds: The Rise of Accidental Empires — 1996 documentary
- A View to a Kill — James Bond movie
- Silicon Valley (TV series) — 2014 American sitcom from HBO
- Startups Silicon Valley - reality TV series on Bravo (U.S. TV network)
- Betas - series on Amazon Instant Video
- Jobs (film) -2013 movie
Notes and references
-  from SiliconValley.com
-  from PriceWaterhouseCoopers.com
- Timothy J. Sturgeon, Massachusetts Institute of Technology | Timothy J. Sturgeon, Massachusetts Institute of Technology PDF (90.0 KB)
- Markoff, John (2009-04-17). "Searching for Silicon Valley". New York Times (The New York Times Company). Retrieved 2009-04-17.
- Stephen B. Adams, "Regionalism in Stanford's Contribution to the Rise of Silicon Valley", Enterprise & Society 2003 4(3): 521-543
- Christophe Lécuyer, "What Do Universities Really Owe Industry? The Case of Solid State Electronics at Stanford," Minerva: a Review of Science, Learning & Policy 2005 43(1): 51-71
- "Monthly employment continues upward climb". Silicon Valley Index. Retrieved 24 September 2013.
- The Information Technology Revolution by Marvel Castells (On the history of formation of Silicon Valley by Rogers and Larsen 1984 and Malone 1985)
- Morgan, Jane (1967). Electronics in the West: The First Fifty Years. National Press Books. p. 18.
- The History of Computing Project – The Industrial Era 1984–1985
- "The Stanford Research Park: The Engine of Silicon Valley". PaloAltoHistory.com. Retrieved 29 March 2014.
- Goodheart July 2, 2006
- Silicon Valley: 110 Year Renaissance, McLaughlin, Weimers, Winslow 2008.
- Graphical User Interface (GUI) from apple-history.com
- Reed Albergotti, "The Most Inventive Towns in America", Wall Street Journal, 22–23 July 2006, P1.
- Cybercities 2008: An Overview of the High-Technology Industry in the Nation's Top 60 Cities
- "America's Greediest Cities". Forbes. 3 December 2007.
- Albanesius, Chloe (24 June 2008). "AeA Study Reveals Where the Tech Jobs Are". PC Magazine.
- Silicon Valley and N.Y. still top tech rankings
- Silicon Valley unemployment rate jumps to 9.4 percent
- "Venture Capital Survey Silicon Valley Fourth Quarter 2011". Fenwick.com. Retrieved 2013-07-08.
- Saxenian, AnnaLee (1999). "Silicon Valley's New Immigrant Entrepreneurs". Public Policy Institute of California.
- Accidental Empires: How the boys of Silicon Valley make their millions, battle foreign competition, and still can't get a date, Robert X. Cringely, Addison-Wesley Publishing, (1992), ISBN 0-201-57032-7
- Behind the Silicon Curtain: The Seductions of Work in a Lonely Era, Dennis Hayes, London: Free Association Books (1989)
- Cities of knowledge: Cold War science and the search for the next Silicon Valley, Margaret Pugh O’Mara, New Jersey: Princeton University Press, (2005)
- Clusters of Creativity: Enduring Lessons on Innovation and Entrepreneurship from Silicon Valley and Europe's Silicon Fen by Rob Koepp, John Wiley (2002), ISBN 0-471-49604-9
- Fire in the Valley: The Making of The Personal Computer by Paul Freiberger & Michael Swaine, McGraw-Hill (1984)
- From White Gold to Silicon Chips: Hydraulic Technology, Electric Power and Silicon Valley James C. Williams, Social Science Information December 2013 vol. 52 no. 4 558-574.
- Hackers: Heroes of the Computer Revolution by Steven Levy, Garden City, New York: Anchor Press/Doubleday (1984)
- Silicon Valley, Inc.: Ruminations on the Demise of a Unique Culture, The San Jose Mercury News (1997)
- Cultures@Silicon Valley, J. A. English-Lueck, Stanford: Stanford University Press (2002)
- Making Silicon Valley: Innovation and the Growth of High Tech, 1930–1970 by Christophe Lécuyer, MIT Press (2006)
- The Nudist on the Late Shift: And Other True Tales of Silicon Valley by Po Bronson, Random House (1999), ISBN 0-375-50277-7
- Regional Advantage: Culture and Competition in Silicon Valley and Route 128 by AnnaLee Saxenian, Harvard University Press (1996), ISBN 0-674-75340-2
- The Silicon Valley of Dreams: Environmental Injustice, Immigrant Workers, and the High-Tech Global Economy, David Naguib Pellow and Lisa Sun-Hee Park, New York University Press (2003)
- Silicon Follies: A Dot. Comedy, Thomas Scoville, Pocket Books (2000)
- The Silicon Boys: And Their Valleys Of Dreams, David A. Kaplan, Harper Perinneal (April 2000), ISBN 0-688-17906-1
- "Silicon Valley: a five part series, documentary narrated by Leonard Nimoy. Silicon Valley Historical Association (2012)."
- Silicon Valley: 110 Year Renaissance, John McLaughlin, Leigh Weimers, Ward Winslow, Santa Clara Valley Historical Association (2008), ISBN 0-9649217-4-X
- "Technology, Entrepreneurs and Silicon Valley, by John McLaughlin and Carol Whiteley, Santa Clara Valley Historical Association (2002), ISBN 096492174X
- What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry, John Markoff, Viking (2005)
- California's Historic Silicon Valley
- Growth of a Silicon Empire by Henry Norr published at the end of 1999 in the San Francisco Chronicle
- PDF (90.0 KB)
- Red tile roofs in Bangalore: Stanford's look copied in Silicon Valley and beyond from Stanford University
- The Silicon Valley Cultures Project at the Wayback Machine (archived December 20, 2007) from San Jose State University
- Silicon Valley Historical Association
- A Weekend in Silicon Valley - slideshow by The New York Times
- Silicon Valley — An American Experience Documentary
- BBC.com - Next Silicon Valleys: How did California get it so right?