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Development Of Silicon Valley

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Introduction

Until the middle of the century, the region of Northern California we call Silicon Valley, was known as the Valley of Heart's Delight. At that time it was better known for its apricots and walnuts than for its cutting-edge technology. The first time the term Silicon Valley was used, was in 1971 when a journalist wrote a couple of articles in Electronic News, a weekly electronic industry tabloid, about the semiconductor-industry around Palo Alto, California. Silicon Valley has since then transformed into a region filled with high-tech industry leaders who are constantly developing the most cutting edge technology. The world we live in now is filled with electronics, computers, and high-speed internet communication, and this could not have come about had it not been for the companies, universities, and business ventures of Silicon Valley. The three main catalysts that led to the development of Silicon Valley were Stanford University, the high-tech revolution, and the venture capital industry.

Stanford University

Stanford University was founded on October 1881 by a man named Leland Stanford. In his life time Leland Stanford was a successful and rich politician, businessman, and even Governor of California. Leland Stanford put great emphasis on idea development, believing that capable minds needed to think freely and that "imagination needs to be cultivated and developed to assure success in life" (Stanford.edu). In the first years of existence, Stanford's main programs consisted of chemistry and physics. The chemistry program was not very distinguished, while the physics program made great advances. It was not until 1925 that Stanford introduced an Engineering/Electronics Department to its faculty. It was this electronics program that became the foundation of Silicon Valley. One of the most important people in those days turned out to be a Professor of electrical engineering, Frederick Terman. He played an important role in getting Silicon Valley the attention it needed, and for that many researchers call him the "Father of Silicon Valley". Terman saw the potential that Silicon Valley had, but he was concerned about the fact that a lot of graduates from Stanford went to the East Coast because of the lack of jobs in Silicon Valley. To solve that problem he started to encourage some of his students to start companies near the university. William Hewlett and David Packard were one of the first students, part of Stanford's engineering elite, who were persuaded to keep their talents in Silicon Valley. William Hewlett, a graduate student, had designed and built an audio oscillator. After his graduation from Stanford, David Packard helped him perfect his audio oscillator and eventually they decided to commercially produce it. In 1937, they founded their company, Hewlett Packard, which in the beginning was so small that their headquarters were in a garage. However, this small state did not last very long because the company since then is experiencing endless growth. Today, Hewlett Packard is a multinational company, with 121,900 employees, generating $40 billion in sales. Frederick Terman also persuaded tech companies to lease land, owned by the university, for very little money but for an extended period of time. The companies that took Terman up for his offer included "Eastman Kodak, General Electric, Performed Line Products, Admiral Corporation, Shockley Transistor Laboratory of Beckman Instruments, Lockheed, Hewlett-Packard" (Gromov). and many more. The result of these cheap land leases was that companies moved their existing headquarters to the Stanford Land, and incidentally created "the most successful complex of its kind in the world" (Gromov). After World War II money was needed in order to finance the rapid postwar growth. It was during the fifties that the defense programs in the electronics industry strongly stimulated growth in Silicon Valley. Semiconductor procurements by the United States defense agencies amounted to approximately two-fifths of total production. This industrial push to revive the United States economy allowed great advancement to be made. The Stanford Research Institute was a "West Coast center of innovation to support economic development in the region"(Gromov). The great innovations in electronics eventually led to the invention of the world's first digital computer in 1953. In 1955 Stanford graduate student Dr. William Shockley founded a company called Shockley Transistor. He had developed a transistor based on the principle of amplifying an electrical current using a solid semi-conducting material, which was a suitable alternative for the devices used up to then. The concept was based on the fact that it is possible to selectively control the flow of electricity through silicon. The resultant discoveries combined to form the basic concept behind the compact electrical "transfer resistor", the transistor, that was to power the coming High Tech Revolution.

The High Tech Revolution

The High Tech Revolution began when companies were able to use the micro-sized transistors made exclusively in silicon when integrating large numbers of integrated circuits, which are an essential part of electronics. With the help of these transistors, the companies using them were able to rapidly join the California electronics industry. Companies such as Intel, Signetics (now Philips Semiconductors), National Semiconductors and AMD, were among the first in Silicon Valley to use this new technology. They became the core of the semiconductor-industry in Silicon Valley. The first commercial microprocessor, the 4004-chip, was created in 1971 by Intel. Soon after that, in 1976, Apple created the first Personal Computer, the Apple 1. These companies were able to achieve such breakthroughs mostly because they all had their own private research labs which constantly developed new innovative ideas to keep them on the cutting edge. The ever increasing presence of computing power and electronics around the world became a motivation for the companies in Silicon Valley to keep improving their products. One of the main innovations to come out of Silicon Valley was the commercial utilization of the internet. Although the Internet became commercially available to the general public in the beginning of the nineties, the origins of the Internet go back to 1964. It was after the Cold War that the United States wanted to create a solution to the problem of undisrupted communication after a nuclear attack. That year a government institute, RAND, began working on a network that could work even if pieces of it were not operating. It would not be controlled by any one person or machine, and that is why communication could

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