Silicon Valley is a commonly used nickname for the southern part of the San Francisco Bay Area in northern California, USA, originally referring to the concentration of silicon chip innovators and manufacturers, but eventually becoming a metaphor for the entire concentration of high tech businesses. It encompasses the northern part of Santa Clara Valley and adjacent communities in the southern parts of the San Francisco Peninsula and East Bay. It reaches approximately from Menlo Park (on the Peninsula) and the Fremont/Newark area in the East Bay down through San Jose, centered roughly on Sunnyvale. In north Santa Clara County, an industrial "Big Dipper" can be seen from aerial photographs because the buildings and streets are laid out in a fashion that is easily distinguishable from the residential areas. 
The term Silicon Valley was coined by journalist Don C. Hoefler in 1971. Silicon refers to the high concentration of semiconductor and computer-related industries in the area; Valley refers to the Santa Clara Valley.
The term may also be applied to surrounding areas on both sides of San Francisco Bay into which many of these industries have expanded rapidly.
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. Unfamiliar with silicon, writers assumed that it was a misspelling of silicone, a material used in caulking, breast implants, and other products that had recently been introduced to the public.
The San Francisco Bay area had long been a major site of US Navy work, and the site of their large research airfield at Moffett Field. A number of technology firms had set up shop in the area around Moffett to serve the Navy. When the Navy moved most of its west-coast operations to San Diego, NASA took over portions of Moffett for aeronautics research. Many of the original companies stayed, while new ones moved in. The immediate area was filled with aerospace firms.
However, there was almost no civilian "high-tech" in the area. Although there were a number of excellent schools in the area, graduating students almost always moved east to find work. This was particularly annoying to Frederick Terman, a professor at Stanford University. He 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 was not directly related to NASA or the US Navy.
In 1951 the program was again expanded with the creation of the Stanford Research Park, a series of small industrial buildings that were rented out at very low costs to technical companies. Today this sort of office space is commonplace and referred to as a technology incubator, but at the time it was practically unknown. 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 Laboratory 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.
There are contradictions in the valley's successes as well. As David Naguib Pellow and Lisa Sun-Hee Park claim in one of their recent works on the area:
"While typically lauded as the engine of the high-tech global economy and a generator of wealth for millions, Silicon Valley is also home to some of the most toxic industries in the nation, and perhaps the world. Next to the nuclear industry, the production of electronics and computer components contaminates the air, land, water, and human bodies with a nearly unrivaled intensity.
"The Valley is also a site of extreme social inequality. It is home to more millionaires per capita then anywhere else in the United States, yet the area has also experienced some of the greatest declines in wages for working-class residents of any city in the nation. Homes are bought and sold for millions of dollars each day, yet thousands of fully employed residents live in homeless shelters in San Jose, the self-proclaimed "Capitol of Silicon Valley". Silicon Valley also leads the nation in the numbers of temporary workers per capita and in workforce gender inequities. Moreover, the region has an entirely non-unionized workforce and is as racially segregated as the most big urban centers."
Thousands of high technology companies are headquartered in Silicon Valley; among those, the following are in the Forbes 500:
Adobe Systems | Advanced Micro Devices | Agilent | Altera | Apple Computer | Applied Materials | BEA Systems | Cadence Design Systems | Cisco Systems | eBay | Electronic Arts | Hewlett-Packard | Intel | Intuit | Juniper Networks | Knight-Ridder | Maxtor | National Semiconductor | Network Appliance | Oracle Corporation | Siebel | Sun Microsystems | Symantec | Synopsys | Veritas Software | Yahoo!
Additional notable companies headquartered in Silicon Valley include (some defunct or subsumed):
Adaptec | Atmel | Cypress Semiconductor | Digital Equipments (now HP/Compaq) | Google Inc. | VA Software (slashdot) | McAfee | Netscape (now AOL) | NeXT Computer Inc (now Apple) | NVIDIA Corporation | Palm, Inc. | PalmOne, Inc. | [paypal (now Part of ebay)] | Rambus | Silicon Graphics | TiVo | Verisign
Befitting its heritage, Silicon Valley is home to the high-tech superstore chain Fry's Electronics.
Technically the following Universities are not located in Silicon Valley, but instrumental as a source of research and new graduates:
A number of cities are located in Silicon Valley (in alphabetical order):
Campbell | Cupertino | Fremont | Los Altos | Los Gatos | Menlo Park | Mountain View | Milpitas | Newark | Palo Alto | Redwood City* | San Jose | Santa Clara | Saratoga | Sunnyvale | Union City
*Although Redwood City is not part of the region traditionally recognized as Silicon Valley, it has recently become considered by many to be part of the region, because of its location immediately adjacent to Menlo Park and its high density of technology companies.
Other industrial valleys
Governmental planners and business networks like to use the name "valley" as a result of the success of Silicon Valley. Some examples are:
Behind the Silicon Curtain: The Seductions of Work in a Lonely Era, Dennis Hayes, London: Free Association Books 1989
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
Last updated: 07-29-2005 22:03:21