What is 'Silicon Valley'

Silicon Valley is a term that refers broadly to a region of Northern California centered in the Santa Clara Valley which is home to a large number of technologically innovative companies including Apple, Google, Facebook and Netflix.

BREAKING DOWN 'Silicon Valley'

Silicon Valley refers to a region in the South San Francisco Bay Area, made notable by the number of technology companies which started and are are headquartered there. The term rose to prominence in the 1970’s to in reference to the region’s development of and technological reliance on the silicon transistor, used in all modern microprocessors.

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. In 2015, the Brookings Institution ranked San Jose third in the world in per-capita gross domestic product, behind Zurich, Switzerland and Oslo, Norway. In May 2012, the New York Times reported that 14% of households in Santa Clara County and neighboring San Mateo County earn more than $200,000 per year.

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 Alphabet (formerly known as 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 Valley.  

A Brief Timeline of Key Silicon Valley Developments

1939: William Hewlett and David Packard patent an audio oscillator, forming the foundation for the Hewlett-Packard company.
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’s: Atari, Apple and Oracle founded
1980’s: Cisco, Sun Microsystems and Adobe founded
1990’s: Google, Yahoo and PayPal founded
2000’s: Facebook, Twitter and Uber founded

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