Industrial region, west-central California. Roughly bounded by San Francisco Bay on the north, the Santa Cruz Mountains on the west, and the Diablo Range on the east, it takes its (unofficial) name from the extensive use of silicon in the region's electronics industries. The U.S. government invested heavily in the region's industry following World War II. A second economic surge occurred with the proliferation of personal computers in the 1980s, and a third surge followed the growth of the Internet in the 1990s.
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Silicon Valley is the southern part of the San Francisco Bay Area in Northern California, United States. The term originally referred to the region's large number of silicon chip innovators and manufacturers, but eventually came to refer to all the high-tech businesses in the area; it is now generally used as a metonym for the high-tech sector. Despite the development of other high-tech economic centers throughout the United States, Silicon Valley continues to be the leading high-tech hub because of its large number of engineers and venture capitalists. Geographically, Silicon Valley encompasses the northern part of Santa Clara Valley and adjacent communities.
Since the early twentieth century, Silicon Valley has been home to a vibrant, growing electronics industry. The industry began through experimentation and innovation in the fields of radio, television, and military electronics. Stanford University, its affiliates, and graduates have played a major role in the evolution of this area.
The San Francisco Bay Area had long been a major site of U.S. 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 U.S. Navy in 1912.
In 1933, Air Base Sunnyvale, California was commissioned by the United States Government for the 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, US Navy blimps were based here. A number of technology firms had set up shop in the area around Moffett to serve the Navy. When the Navy gave up its airship ambitions and moved most of its West Coast operations to San Diego , NACA (the National Advisory Committee for Aeronautics, forerunner of NASA) took over portions of Moffett 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.
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 slightly 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 ink jet printer in 1984. In addition, the tenancy of Eastman Kodak and General Electric made Stanford Industrial Park a center of technology in the mid-1990s.
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, eight engineers left the company to form Fairchild Semiconductor. Two of the original employees of Fairchild Semiconductor, Robert Noyce and Gordon Moore, would go on to found Intel.
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.
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 U.S. 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. Microsoft's Windows GUI is based on Apple's work, more or less directly. Cisco's impetus stemmed from the need to route a variety of protocols over Stanford's campus Ethernet.
Silicon Valley is generally considered to have been the center of the dot-com bubble which started from 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.
Even 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 Wall Street Journal story found that 13 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.
Additional notable companies headquartered (or with a significant presence) in Silicon Valley include (some defunct or subsumed):
Cities sometimes associated with the region: