Silicon Valley is a region in the southern San Francisco Bay Area of Northern California, referring to the
Santa Clara Valley, which serves as the global center for high technology, venture capital, innovation,
and social media. San Jose is the Valley’s largest city, the 3rd-largest in California.
The word “silicon” originally referred to the large number of silicon chip innovators and manufacturers in
the region, but the area is now the home to many of the world’s largest high-tech corporations, including
the headquarters of 39 businesses in the Fortune 1000, and thousands of startup companies. Silicon
Valley also accounts for one-third of all of the venture capital investment in the United States, which has
helped it to become a leading hub and startup ecosystem for high-tech innovation and scientific
development. It was in the Valley that the silicon-based integrated circuit, the microprocessor, and the
microcomputer, among other key technologies, were developed. As of 2013, the region employed about
a quarter of a million information technology workers.
The name also became a global synonym for leading high-tech research and enterprises, and thus
inspired similar named locations, as well as research parks and technology centers with a comparable
structure all around the world.
Silicon Valley has a social and business ethos that supports innovation and entrepreneurship. Attempts
to create “Silicon Valley” in environments where disruptive innovation does not go over well have a poor
track record.Currently one of the wealthiest regions in the world, the Silicon Valley is known as a global
center of technological innovation. The Silicon Valley centers around the region’s largest city, San Jose.
Many high-profile technology companies have been founded in the Silicon Valley, making the region
attractive target for venture capitalist investors. In 2017, the most valuable companies headquartered in
the Silicon Valley include Google, Apple, Chevron, Cisco Systems, Facebook, Intel, Netflix, Nvidia,
Oracle, Visa and Wells Fargo. As of 2018, 39 Fortune 1000 companies are headquartered in the Silicon
The following 39 are in the Fortune 1000:
Advanced Micro Devices (AMD)
Alphabet Inc. (formerly Google Inc.)
Hewlett Packard Enterprise
Maxim Integrated Products
Western Digital Corporation
Key Silicon Valley Developments:
1939: William Hewlett and David Packard patent an audio oscillator, forming the foundation for the
1940: William Shockley invents silicon transistor at Bell Labs.
1951: Fred Terman establishes the Stanford Research Park as a partnership between Stanford
University and the City of Palo Alto, providing a base of operations for both military and commercial
technological innovations for companies such as Fairchild, Lockheed and Xerox.
1956: William Shockley opens his own firm, Shockley Semiconductor Labs, in Mountain View, California
1957: Several Shockley employees resign and start a competing firm. Fairchild Semiconductor. These
men go to start many other firms, including Intel and Nvidia.
1958-1960: Independently, Robert Noyce and Jack Kilby discover that all parts of a circuit including the
transistor can be created using silicon. Their discoveries led to the integrated circuit, created from silicon,
which is used in all microprocessors today.
1961: Former Fairchild backer Arthur Rock establishes Davis & Rock, which is considered the first
venture capital firm, giving rise to a new type of investment industry.
1969: The Arpanet computer network is established with four nodes, including one at Stanford
University. Arpanet is the foundation for the internet.
1971-1972: Journalist Don Hoefler publishes a three-part report on the rise of technological development
in the region in Electronic News, titled “Silicon Valley, U.S.A.”
1970: Atari, Apple and Oracle founded
1980: Cisco, Sun Microsystems and Adobe founded
1990: Google, Yahoo and PayPal founded
2000: Facebook, Twitter and Uber founded
It was in Silicon Valley that the silicon-based integrated circuit, the microprocessor, the microcomputer,
among other key technologies, were developed, and has been the site of electronic innovation for over
four decades, sustained by about a quarter of a million information technology workers.
Silicon Valley was created over a period of 60 years and today is the home to roughly 10,000 companies
employing 1M people. Its growth and success were based on multiple waves of technological
innovations: electronics, semiconductors, computer hardware, software, biotechnology, internet, and
more recently cleantech.
The establishment and enduring success of Silicon Valley is based on several factors, all of which comprise important and necessary ingredients:
The area is a magnet for top people. Silicon Valley is not about the people who live here, it’s about the
people who are attracted here. They create a diverse network from a variety of disciplines and
backgrounds. Entrepreneurs, academics, investors, commercial and investment bankers, accountants,
and lawyers make up Silicon Valley’s network. Also, this talent is coming here from around the world.
The Valley’s culture which is rather unique and is the combination of several elements
A risk capital culture, driving venture capitalists to invest where others fear and where financial returns
match the risks taken,
A risk employment culture, driving people to forego the financial stability that employment in a large
corporation brings and work in a startup in order to achieve technological success and financial
A celebrate success culture, under which making money is as important as advancing technology and
creating a successful product,
A learn from failure culture, where failure is acknowledged as much as success because there are
important lessons that entrepreneurs carry from each failure to their next effort,
And finally a culture that celebrates technology entrepreneurs as heroes.
And finally a culture that celebrates technology entrepreneurs as heroes.
Silicon Valley is blessed with top academic institutions, such as Stanford University and Berkeley that try
to bring on their campuses the world’s best students, professors and researchers, and view commerce
with enthusiasm rather than disdain as the only way to sustainably serve the community around them. It
is also home to several national research labs, such as the Lawrence Livermore National Laboratory,
and SLAC that strive to be the best in their fields and attract government and industry funding to conduct
Silicon Valley is the headquarters of many large technology companies (many of which started as
venture-backed startups) that play multiple roles in the ecosystem. They collaborate and partner with
startups providing them with revenue streams, help them shape their product, and give them access to
their clients. They train the next generation of executives that will go on to staff the startups. Oftentimes,
they even acquire the startups providing profitable exits for founders, management teams and investors.
The area is at the forefront of modern legislative and legal infrastructure for company creation and
dissolution, hiring and rewarding the best talent, capital formation and allocation, IP protection and
licensing, and exporting and importing of products and technology.
Finally, Silicon Valley’s top quality infrastructure from the multiple means of transportation, to buildings
and other facilities suited for every type of technology and budget, to telecommunications and reliable
electricity supply, and its temperate climate that provides an environment where people want to live and
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