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Silicon Valley

Silicon Valley is a nickname for the southern part of the San Francisco Bay Area coined by journalist Don C. Hoefler in 1971. It encompasses the Santa Clara Valley and southern half of the San Francisco Peninsula. It reaches approximately from Menlo Park, California down to San Jose, centered roughly on Sunnyvale. It was named "Silicon" for the high concentration of semiconductor and computer related industry in the area, and "Valley" for the Santa Clara Valley. The term may also be applied to surrounding areas on both sides of the bay into which many of these industries have expanded.

For many years in the 1970s and 1980s it was also incorrectly called "Silicone Valley", mostly by journalists, before the name became commonplace in American culture.

Table of contents
1 History
2 Notable Companies
3 Universities
4 Cities
5 Wannabes
6 External Links


The location of the computer market in the valley was due largely to two men, William Shockley and Frederick Terman.

Terman, a professor at Stanford University, felt that vast acres of unused Stanford land were perfect for real-estate development, and set up a program to encourage students to stay in the area by finding them venture capital. One of the major success stories of the program was that it convinced two students to stay in the area, William Hewlett and David Packard. Hewlett-Packard would go on to be one of the first "high tech" firms in the area that were not directly related to NASA or the US Navy.

In 1951 the program was again expanded with the creation of the Stanford Industrial Park, a series of small industrial buildings that were rented out at very low costs to technical companies. In 1954, the Honors Cooperative Program, today known as the co-op, was established 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. By the mid-1950s the infrastructure for what would later allow the creation of "the valley" was in a nascent stage due to Terman's efforts.

It was in this atmosphere that a former Californian decided to move to the area. William Shockley had quit Bell Labs in 1953 in a disagreement over the way the transistor had been presented to the public which, due to patent concerns, led to his name being sidelined in favor of his co-inventors, John Bardeen and Walter Houser Brattain. After divorcing his wife, he returned to the California Institute of Technology where he had received his Bachelor of Science degree, but in 1956 moved to Palo Alto, California to create the Shockley Semiconductor as part of Beckman Instruments and to live closer to his aging mother.

There he intended to one-up the transistor with a new three-element design (today known as the Shockley diode) that he felt would take over the market, but the design was considerably more difficult to build than the "simple" transistor. As the project ran into difficulty, Shockley became more and more paranoid. He demanded lie detector tests on the staff, posted their salaries publicly, and generally annoyed everyone. The straw that broke the camel's back occurred when he flew into a rage when a secretary cut her finger, an event he claimed was an intended attack on himself. When it was later demonstrated the cut was from a broken thumbtack the damage was already done, and in 1957 eight of the talented engineers he had brought to the west coast left and formed Fairchild Semiconductor.

Over the next few years this pattern would repeat itself several times, as engineers lost control of the companies they started to outside management, and they then left to form their own companies. AMD, Signetics, National Semiconductor, Intel all started as offshoots from Fairchild, or alternately as offshoots of other offshoots.

By the early 1970s the entire area was filled with semiconductor companies, 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.

Notable Companies

Thousands of technology companies are located in Silicon Valley. Notable ones include (in alphabetic order):



A number of cities comprise Silicon Valley (in alphabetical order):


Hoping to emulate the economic success of Silicon Valley, many cities, regions, and nations around the world have attempted to develop their own dense high tech areas, usually with informal names incorporating the words "Silicon" or "Valley". In some cases the names are developed by governments for marketing purposes, while others are coined by journalists. In a few cases, such as "Silicon Prairie", there are multiple claimants to the name entangled in legal disputes.

External Links