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Silicon Valley is a nickname for the southern part of the San Francisco Bay Area. It encompasses the Santa Clara Valley and the southern half of the San Francisco Peninsula. It reaches approximately from
Menlo Park, California down to San Jose, centered roughly on Sunnyvale.
The term was coined by journalist Don C. Hoefler in 1971. Silicon refers to the high concentration
of semiconductor and computer related industry in the area; Valley refers to 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.
History
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, decided that a
vast area of unused Stanford land was 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
Mountain
View, 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, and Intel all started as offshoots from Fairchild, or alternatively 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 high technology companies are headquartered in Silicon Valley.
Notable ones include:
Universities
Cities
A number of cities comprise Silicon Valley (in alphabetical order):
See also
External links
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