Silicon Valley

Downtown San Jose as seen with lit palm trees

On August 23, 1899, the first ship-to-shore wireless telegraph message to be received in the US was from the San Francisco lightship outside the Golden Gate, signaling the return of the American fleet from the Philippines after their victory in the Spanish–American War in 1898.[11] The ship had been outfitted with a wireless telegraph transmitter by a local newspaper, so that they could prepare a celebration on the return of the American sailors.[12] Local historian Clyde Arbuckle states in Clyde Arbuckle's History of San Jose[13] that "California first heard the click of a telegraph key on September 11, 1853. It marked completion of an enterprise begun by a couple of San Francisco Merchants' Exchange members named George Sweeney and Theodore E. Baugh…" He says, "In 1849, the gentleman established a wigwag telegraph station a top a high hill overlooking Portsmouth Squares for signaling arriving ships… The operator at the first station caught these signals by telescope and relayed them to the Merchant's Exchange for the waiting business community." Arbuckle points to the historic significance the Merchants Exchange Building (San Francisco) and Telegraph Hill, San Francisco when he goes on to say "The first station gave the name Telegraph to the hill on which it was located. It was known as the Inner Station; the second, as the Outer Station. Both used their primitive mode of communication until Messrs. Sweeney and Baugh connected the Outer Station directly with the Merchants's Exchange by electric telegraph Wire."

According to Arbuckle (p. 380–381) Sweeney and Baugh's line was strictly an intra-city, San Francisco-based service; that is until California State Telegraph Company enfranchised on May 3, 1852; whereas, O.E. Allen and C. Burnham led the way to "build a line from San Francisco to Marysville via San Jose, Stockton, and Sacramento". Delays to construction occurred until September 1853; but, "…San Jose became the first station on the line when the wire arrived here on October 15. The line was completed when [James] Gamble's northbound crew met a similar crew working southward from Marysville on October 24."

The Bay Area had long been a major site of United States 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 Navy in 1912.[14]

In 1933, Air Base Sunnyvale, California, was commissioned by the United States Government for 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, U.S. Navy blimps were based there.[15] A number of technology firms had set up shop in the area around Moffett Field to serve the Navy. When the Navy gave up its airship ambitions and moved most of its west coast operations to San Diego, the National Advisory Committee for Aeronautics (NACA, forerunner of NASA) took over portions of Moffett Field 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, which was Silicon Valley's largest employer from the 1950s into 1980s.[16]

Ham radio

The Bay Area was an early center of ham radio with about 10% of the operators in the United States. William Eitel, Jack McCullough, and Charles Litton, who together pioneered vacuum tube manufacturing in the Bay Area, were hobbyists with training in technology gained locally who participated in the development of shortwave radio by the ham radio hobby. High frequency, and especially, Very high frequency, VHF, transmission in the 10-meter band, required higher quality power tubes than were manufactured by the consortium of RCA, Western Electric, General Electric, Westinghouse which controlled vacuum tube manufacture. Litton, founder of Litton Industries, pioneered manufacturing techniques which resulted in the award of wartime contracts to manufacture transmitting tubes for radar to Eitel-McCullough, a San Bruno firm, which manufactured power-grid tubes for radio amateurs and aircraft radio equipment.[17]

Welfare capitalism

A union organizing drive in 1939–1940 at Eitel-McCullough by the strong Bay Area labor movement was fought off by adoption of a strategy of welfare capitalism which included pensions and other generous benefits, profit sharing, and such extras as a medical clinic and a cafeteria. An atmosphere of cooperation and collaboration was established.[18] Successes have been few and far between[19] for union organizing drives by UE and others in subsequent years.[20]

U.S. response to Sputnik

On October 4, 1957 the Soviet Union launched the first space satellite, Sputnik, which sparked fear that the Soviet Union was pulling ahead technologically. After President Eisenhower signed the National Aeronautics and Space Act (NASA), he turned to Fairchild Semiconductor, then the only company in the world that was able to make transistors. The president funded Fairchild's project, which was highly successful.[21]

Stanford University, its affiliates, and graduates have played a major role in the development of this area.[22] Some examples include the work of Lee De Forest with his invention of a pioneering vacuum tube called the Audion and the oscilloscopes of Hewlett-Packard.

A very powerful sense of regional solidarity accompanied the rise of Silicon Valley. From the 1890s, Stanford University's leaders saw its mission as service to the (American) West and shaped the school accordingly. At the same time, the perceived exploitation of the West at the hands of eastern interests fueled booster-like attempts to build self-sufficient local industry. Thus, regionalism helped align Stanford's interests with those of the area's high-tech firms for the first fifty years of Silicon Valley's development.[23]

After World War II, Frederick Terman, as Stanford University's dean of the school of engineering, encouraged faculty and graduates to start their own companies. In 1951, Terman spearheaded the creation of Stanford Industrial Park (now Stanford Research Park, an area surrounding Page Mill Road, south west of El Camino Real and extending beyond Foothill Expressway to Arastradero Road), whereby the University leased portions of its land to high-tech firms.[24] He is credited with nurturing companies like Hewlett-Packard, Varian Associates, Eastman Kodak, General Electric, Lockheed Corporation, and other high-tech firms, until what would become Silicon Valley grew up around the Stanford University campus.

In 1956, William Shockley, the co-inventor of the first working transistor (with John Bardeen and Walter Houser Brattain), moved from New Jersey to Mountain View, California, to start Shockley Semiconductor Laboratory to live closer to his ailing mother in Palo Alto. Shockley's work served as the basis for many electronic developments for decades.[25][26] Both Frederick Terman and William Shockley are often called "the father of Silicon Valley".[27][28]

During 1955–1985, solid state technology research and development at Stanford University followed three waves of industrial innovation made possible by support from private corporations, mainly Bell Telephone Laboratories, Shockley Semiconductor, Fairchild Semiconductor, and Xerox PARC. In 1969, the Stanford Research Institute (now SRI International), operated one of the four original nodes that comprised ARPANET, predecessor to the Internet.[29]

Stanford Industrial Park

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) in the year 1951. 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 Bill Hewlett and David Packard, Hewlett-Packard moved its offices into the Stanford Research Park shortly 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 thermal drop-on-demand ink jet printer in 1984.[30] Other early tenants included Eastman Kodak, General Electric, and Lockheed.[31]

Up until the late 1950s, germanium was the dominant semiconductor material for transistors and other semiconductor devices. Germanium was initially considered the more effective semiconductor material, as it was able to demonstrate better performance due to higher carrier mobility.[32][33] The relative lack of performance in early silicon semiconductors was due to electrical conductivity being limited by unstable quantum surface states,[34] preventing electricity from reliably penetrating the surface to reach the semiconducting silicon layer.[35][36]

In 1953, William Shockley left Bell Labs in a disagreement over the handling of the invention of the bipolar 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 of Shockley's abusive management style, eight engineers left the company to form Fairchild Semiconductor; Shockley referred to them as the "traitorous eight". Two of the original employees of Fairchild Semiconductor, Robert Noyce and Gordon Moore, would go on to found Intel.[37][38]

In 1957, Mohamed Atalla at Bell Labs developed the process of silicon surface passivation by thermal oxidation,[39][40][33] which electrically stabilized silicon surfaces[41] and reduced the concentration of electronic states at the surface.[40] This enabled silicon to surpass the conductivity and performance of germanium, leading to silicon replacing germanium as the dominant semiconductor material,[33][34] and paving the way for the mass-production of silicon semiconductor devices.[42] This led to Atalla inventing the MOSFET (metal-oxide-silicon field-effect transistor), also known as the MOS transistor, with his colleague Dawon Kahng in 1959.[43] It was the first truly compact transistor that could be miniaturised and mass-produced for a wide range of uses,[44] and is credited with starting the silicon revolution.[34]

The MOSFET was initially overlooked and ignored by Bell Labs in favour of bipolar transistors, which led to Atalla resigning from Bell Labs and joining Hewlett-Packard in 1961.[45] However, the MOSFET generated significant interest at RCA and Fairchild Semiconductor. In late 1960, Karl Zaininger and Charles Meuller fabricated a MOSFET at RCA, and Chih-Tang Sah built an MOS-controlled tetrode at Fairchild. MOS devices were later commercialized by General Microelectronics and Fairchild in 1964.[43] The development of MOS technology became the focus of startup companies in California, such as Fairchild and Intel, fuelling the technological and economic growth of what would later be called Silicon Valley.[46]

On April 23, 1963, J.C.R. Licklider, the first director of the Information Processing Techniques Office (IPTO) at The Pentagon's ARPA issued an office memorandum addressed to Members and Affiliates of the Intergalactic Computer Network. It rescheduled a meeting in Palo Alto regarding his vision of a computer network, which he imagined as an electronic commons open to all, the main and essential medium of informational interaction for governments, institutions, corporations, and individuals.[47][48][49][50] As head of IPTO from 1962 to 1964, "Licklider initiated three of the most important developments in information technology: the creation of computer science departments at several major universities, time-sharing, and networking."[50] By the late 1960s, his promotion of the concept had inspired a primitive version of his vision called ARPANET, which expanded into a network of networks in the 1970s that became the Internet.[49]

The Immigration and Nationality Act of 1965 and other factors such as the mass exodus by Vietnamese boat people resulted in significant immigration, particularly by Asians, Latinos, and Portuguese, to Silicon Valley where they contributed to both the high-tech and production workforce.[51] The Asian-American population in Santa Clara County rose from 43,000 in 1970 to 430,000 in 2000. During the same period the Latino population grew to 24% in the county and 30% in San Jose. The African-American population in the county remained steady but grew slightly to about 5%.[52] Expansion of the H-1B visa in 1990 also played a role.[53]

Following the 1959 inventions of the monolithic integrated circuit (IC) chip by Robert Noyce at Fairchild, and the MOSFET (MOS transistor) by Mohamed Atalla and Dawon Kahng at Bell Labs,[43] Atalla first proposed the concept of the MOS integrated circuit (MOS IC) chip in 1960,[44] and then the first commercial MOS IC was introduced by General Microelectronics in 1964.[54] The development of the MOS IC led to the invention of the microprocessor,[55] incorporating the functions of a computer's central processing unit (CPU) on a single integrated circuit.[56] The first single-chip microprocessor was the Intel 4004,[57] designed and realized by Federico Faggin along with Ted Hoff, Masatoshi Shima and Stanley Mazor at Intel in 1971.[55][58] In April 1974, Intel released the Intel 8080,[59] a "computer on a chip", "the first truly usable microprocessor".

Invitation to first Homebrew Computer Club meeting, 1975.

The Homebrew Computer Club was an informal group of electronic enthusiasts and technically minded hobbyists who gathered to trade parts, circuits, and information pertaining to DIY construction of computing devices.[60] It was started by Gordon French and Fred Moore who met at the Community Computer Center in Menlo Park. They both were interested in maintaining a regular, open forum for people to get together to work on making computers more accessible to everyone.[61]

The first meeting was held as of March 1975 at French's garage in Menlo Park, San Mateo County, California; which was on occasion of the arrival of the MITS Altair microcomputer, the first unit sent to the area for review by People's Computer Company. Steve Wozniak and Steve Jobs credit that first meeting with inspiring them to design the original Apple I and (successor) Apple II computers. As a result, the first preview of the Apple I was given at the Homebrew Computer Club.[62] Subsequent meetings were held at an auditorium at the Stanford Linear Accelerator Center.[63]

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. Growth during this era was fueled by the emergence of venture capital on Sand Hill Road, beginning with Kleiner Perkins and Sequoia Capital in 1972; the availability of venture capital exploded after the successful $1.3 billion IPO of Apple Computer in December 1980. Since the 1980s, Silicon Valley has been home to the largest concentration of venture capital firms in the world.[64]

In 1971 Don Hoefler traced the origins of Silicon Valley firms, including via investments from Fairchild's eight co-founders.[9][65] The key investors in Kleiner Perkins and Sequoia Capital were from the same group, directly leading to Tech Crunch 2014 estimate of 92 public firms of 130 related listed firms then worth over US$2.1 Trillion with over 2,000 firms traced back to them.[66]

Silicon Valley venture capital investment, 2002-2017.

Prior to 1970, most Northern California lawyers were based in San Francisco, especially the experienced patent attorneys whom the high-tech industry needed to protect its intellectual property. During the 1970s, lawyers began to follow venture capitalists down the Peninsula to serve the booming high-tech industry in Silicon Valley. One sign of the rapid expansion of Silicon Valley legal services was that Palo Alto law firm Wilson Sonsini Goodrich & Rosati "expanded from a dozen attorneys in 1975 to more than 700 by 2000".[67] During this era, law firms evolved from their "conventional role" as protectors of intellectual property into business advisers, intermediaries, and dealmakers, and thereby acquired "unusual prominence" in Silicon Valley.[64]

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, the US Air Force, and ARPA, Doug Engelbart invented the mouse and hypertext-based collaboration tools in the mid-1960s and 1970s while at Stanford Research Institute (now SRI International), first publicly demonstrated in 1968 in what is now known as The Mother of All Demos. Engelbart's Augmentation Research Center at SRI was also involved in launching the ARPANET (precursor to the Internet) and starting the Network Information Center (now InterNIC). Xerox hired some of Engelbart's best researchers beginning in the early 1970s. 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.[68] Cisco's impetus stemmed from the need to route a variety of protocols over Stanford University's Ethernet campus network.[69]

Commercial use of the Internet became practical and grew slowly throughout the early 1990s.

In 1995, commercial use of the Internet grew substantially and the initial wave of internet startups, Amazon.com, eBay, and the predecessor to Craigslist began operations.[70]

Silicon Valley is generally considered to have been the center of the dot-com bubble, which started in 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.

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 The Wall Street Journal story found that 12 of the 20 most inventive towns in America were in California, and 10 of those were in Silicon Valley.[71] San Jose led the list with 3,867 utility patents filed in 2005, and number two was Sunnyvale, at 1,881 utility patents.[72] Silicon Valley is also home to a significant number of "Unicorn" ventures, referring to startup companies whose valuation has exceeded $1 billion dollars.[73] However, taxes and the cost of living in Silicon Valley have prompted some corporations to gradually transfer their operations to the Midwest or Sun Belt states.[74]

Silicon Valley has a severe housing shortage, caused by the market imbalance between jobs created and housing units built: from 2010 to 2015, many more jobs have been created than housing units built. (400,000 jobs, 60,000 housing units)[85] This shortage has driven home prices extremely high, far out of the range of production workers.[86] As of 2016 a two-bedroom apartment rented for about $2,500 while the median home price was about $1 million.[85] The Financial Post called Silicon Valley the most expensive U.S. housing region.[87] Homelessness is a problem with housing beyond the reach of middle-income residents; there is little shelter space other than in San Jose which, as of 2015, was making an effort to develop shelters by renovating old hotels.[88]

The Economist also attributes the high cost of living to the success of the industries in this region. Although, this rift between high and low salaries is driving many residents out who can no longer afford to live there. In the Bay Area, the number of residents planning to leave within the next several years has had an increase of 35% since 2016, from 34% to 46%.[89][90]

Facebook in Menlo Park

Tesla in Palo Alto

HP in Palo Alto

PayPal in San Jose

Yahoo! in Sunnyvale

Thousands of high technology companies are headquartered in Silicon Valley. Among those, the following are in the Fortune 1000:

Additional notable companies headquartered in Silicon Valley (some defunct or subsumed) include:

• Moffett Federal Airfield
• NASA Ames Research Center (Located inside Moffett)
• Onizuka Air Force Station (Closed 2010)
• SLAC National Accelerator Laboratory
• VA Palo Alto Hospital

Exotic cars outside the Hotel Valencia, in Santana Row, San Jose.

In November 2006, the University of California, Davis released a report analyzing business leadership by women within the state.[100] The report showed that although 103 of the 400 largest public companies headquartered in California were located in Santa Clara County (the most of all counties), only 8.8% of Silicon Valley companies had women CEOs.[101]^:4,7 This was the lowest percentage in the state.[102] (San Francisco County had 19.2% and Marin County had 18.5%.)[101]

Silicon Valley tech leadership positions are occupied almost exclusively by men.[103] This is also represented in the number of new companies founded by women as well as the number of women-lead startups that receive venture capital funding. Wadhwa said he believes that a contributing factor is a lack of parental encouragement to study science and engineering.[104] He also cited a lack of women role models and noted that most famous tech leaders—like Bill Gates, Steve Jobs, and Mark Zuckerberg—are men.[103]

In 2014, tech companies Google, Yahoo!, Facebook, Apple, and others, released corporate transparency reports that offered detailed employee breakdowns. In May, Google said 17% of its tech employees worldwide were women, and, in the U.S., 1% of its tech workers were black and 2% were Hispanic.[105] June 2014 brought reports from Yahoo! and Facebook. Yahoo! said that 15% of its tech jobs were held by women, 2% of its tech employees were black and 4% Hispanic.[106] Facebook reported that 15% of its tech workforce was female, and 3% was Hispanic and 1% was black.[107] In August, Apple reported that 80% of its global tech staff was male and that, in the U.S., 54% of its tech jobs were staffed by Caucasians and 23% by Asians.[108] Soon after, USA Today published an article about Silicon Valley's lack of tech-industry diversity, pointing out that it is largely white or Asian, and male. "Blacks and Hispanics are largely absent," it reported, "and women are underrepresented in Silicon Valley—from giant companies to start-ups to venture capital firms."[109] Civil rights activist Jesse Jackson said of improving diversity in the tech industry, "This is the next step in the civil rights movement"[110] while T.J. Rodgers has argued against Jackson's assertions.

As of October 2014, some high-profile Silicon Valley firms were working actively to prepare and recruit women. Bloomberg reported that Apple, Facebook, Google, and Microsoft attended the 20th annual Grace Hopper Celebration of Women in Computing conference to actively recruit and potentially hire female engineers and technology experts.[111] The same month, the second annual Platform Summit was held to discuss increasing racial and gender diversity in tech.[112] As of April 2015 experienced women were engaged in creation of venture capital firms which leveraged women's perspectives in funding of startups.[113]

After UC Davis published its Study of California Women Business Leaders in November 2006,[101] some San Jose Mercury News readers dismissed the possibility that sexism contributed in making Silicon Valley's leadership gender gap the highest in the state. A January 2015 issue of Newsweek magazine featured an article detailing reports of sexism and misogyny in Silicon Valley.[114] The article's author, Nina Burleigh, asked, "Where were all these offended people when women like Heidi Roizen published accounts of having a venture capitalist stick her hand in his pants under a table while a deal was being discussed?"[115]

Silicon Valley firms' board of directors are composed of 15.7% women compared with 20.9% in the S&P 100.[116]

The 2012 lawsuit Pao v. Kleiner Perkins was filed in San Francisco County Superior Court by executive Ellen Pao for gender discrimination against her employer, Kleiner Perkins.[117] The case went to trial in February 2015. On March 27, 2015 the jury found in favor of Kleiner Perkins on all counts.[118] Nevertheless, the case, which had wide press coverage, resulted in major advances in consciousness of gender discrimination on the part of venture capital and technology firms and their women employees.[119][120] Two other cases have been filed against Facebook and Twitter.[121]

Funding for public schools in upscale Silicon Valley communities such as Woodside is often supplemented by grants from private foundations set up for that purpose and funded by local residents. Schools in less affluent areas such as East Palo Alto must depend on state funding.[122]

• Computer History Museum
• Children's Discovery Museum of San Jose
• CuriOdyssey,
• De Saisset Museum at Santa Clara University
• Hiller Aviation Museum
• The HP Garage
• Intel Museum
• Iris & B. Gerald Cantor Center for Visual Arts at Stanford University
• Japanese American Museum of San Jose
• Los Altos History Museum
• Moffett Field Historical Society Museum,
• Museum of American Heritage
• Palo Alto Art Center
• Palo Alto Junior Museum and Zoo
• Portuguese Historical Museum
• Rosicrucian Egyptian Museum
• San Mateo County History Museum
• San Jose Museum of Art
• San Jose Museum of Quilts & Textiles
• Sunnyvale Heritage Park Museum
• The Tech Museum of Innovation
• Viet Museum
• Winchester Mystery House

• Opera San José
• Ballet San Jose
• California Youth Symphony
• Symphony Silicon Valley
• San Jose Center for the Performing Arts
• Broadway San Jose
• San Jose Repertory Theatre
• San Jose Youth Symphony
• San Jose Improv
• SjDANCEco
• Broadway by the Bay, Redwood City
• TheatreWorks Theatre Company, Palo Alto and Mountain View

• Pace Gallery in Menlo Park opened on February 6, 2016.[129]
• The Allied Arts Guild was formed Menlo Park in 1928 and is a complex of artist studios, shops, restaurant, and gardens.[130][131]

• Apple Worldwide Developers Conference
• Facebook F8
• BayCon, Santa Clara
• Christmas in the Park, downtown San Jose
• Cinequest Film Festival, multiple venues
• FanimeCon, downtown San Jose
• LiveStrong Challenge bike race, San Jose
• Los Altos Art and Wine Festival, Los Altos[132]
• Mountain View Art and Wine Festival, Mountain View[133]
• Palo Alto Festival of the Arts, Palo Alto[134]
• San Francisco International Asian American Film Festival, downtown San Jose
• San Jose Jazz Festival, downtown San Jose
• Silicon Valley Comic Con, downtown San Jose
• Stanford Jazz Festival, Stanford University