History of Silicon Valley

It was in Silicon Valley that the integrated circuit, microprocessor, and microcomputer were developed. It has remained the world's premiere incubator of electronic innovation for over four decades, sustained by nearly a quarter million information technology workers.

Roots in Radio and Military Technology
In 1909, Charles Herrold started the first radio station in the United States with regularly scheduled programming in San Jose, California. 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 U.S. Navy in 1912.

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, US Navy blimps were based here. A number of technology firms set up shop in the area around Moffett to serve the Navy. When the Navy gave up its airship ambitions and moved most of its West Coast operations to San Diego, NACA (the forerunner of NASA) took over portions of Moffett for aeronautics research. Many of the original companies stayed, and new ones moved in including Lockheed.

Stanford Industrial Park
After World War II, universities experienced a huge influx of students due to returning soldiers. To address the financial demands of Stanford's growth, and to provide local employment opportunities for graduating students, Frederick Terman proposed the leasing of Stanford's lands for use as an office park. Stanford Industrial Park (later Stanford Research Park) limited its leases to high technology companies. The first tenant signed was Varian Associates, which had been founded by Stanford alumni in the 1930s to build military radar components.

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 William Hewlett and David Packard, Hewlett-Packard moved its offices into the Stanford Research Park slightly 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 since become the largest personal computer manufacturer in the world, and transformed the home printing market when it released the first ink jet printer in 1984.

Silicon Transistor
In 1953, William Shockley left Bell Labs in a disagreement over the handling of the invention of the 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, eight engineers left the company to form Fairchild Semiconductor. Two of the original employees of Fairchild Semiconductor, Robert Noyce and Gordon Moore, would go on to found Intel.

Venture Capital
By the early 1970s there were numerous semiconductor companies in Silicon Valley, 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.

Rise of Software
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. Research done in Silicon Valley has significantly influenced computer operating systems, software, and user interfaces.

While at Stanford Research Institute in the mid 1960s, Doug Engelbart invented the mouse and hypertext-based collaboration tools. When Engelbart's Augmentation Research Center declined in influence due to the loss of government funding, Xerox hired some of Engelbart's best researchers. In the 1970s and 80s, 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. Xerox innovations led directly to the formation of 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. Microsoft's Windows GUI is based on Apple's work. Cisco's impetus stemmed from the need to route a variety of protocols over Stanford's campus Ethernet.