The iPhone group Apple has its headquarters in Silicon Valley.
(Photo: Bloomberg)
san francisco Silicon Valley is a region on the US west coast. The area in California is considered the most important high-tech location in the world. Almost all major American IT companies are based in Silicon Valley, including Google, Apple, the Facebook group Meta and chip groups such as Intel and Nvidia.
Stanford University is considered the nucleus of Silicon Valley. In the 1950s, more and more students and graduates of the university began setting up small businesses in the vicinity. This is how new developments and products gradually emerged. The Handelsblatt answers important questions about Silicon Valley.
What exactly is Silicon Valley?
The term “Silicon Valley” has become established for a region on the west coast of the USA. It describes the region between San Francisco to the north and San Jose to the south. Geographically, it mainly includes the Santa Clara Valley. However, there is no official definition of where Silicon Valley geographically begins and ends.
Silicon Valley is known for its high concentration of innovative companies, start-ups, venture capitalists, research institutes and universities involved in information technology, software, internet, biotechnology, artificial intelligence and more.
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In her book “Uncanny Valley”, author Anna Wiener describes Silicon Valley as a place full of contradictions. She describes it as a world where young, talented and idealistic people try to shape the future, but also a world where abuse of power, greed, sexism and surveillance reign.
“Silicon Valley was a place for people with a certain kind of intelligence, or a certain belief in their own intelligence: a kind of intelligence that saw itself as the only kind of intelligence,” wrote the San Francisco-based author and worked for various start-ups.
Why is it called Silicon Valley?
The region south of San Francisco has long been known by a different name. Due to the many orchards, there was also the name “Valley of Heart’s Delight” at the beginning of the 20th century, which can be translated into German as “Valley of Heart’s Desires”.
Journalist Don Hoefler is credited with coining the term “Silicon Valley” for the region in the 1970s. It was due to the fact that companies involved in the manufacture and development of semiconductors settled there from the 1950s onwards. The valley was named after the element silicon, found in sand and used to make semiconductors.
Why did the semiconductor industry settle in Silicon Valley?
There are many reasons for this. An important one is the Physics Nobel Laureate William Shockley, who himself comes from Palo Alto. He invented the transistor and formed a company with Shockley Semiconductor to mass produce his invention.
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However, some of his former employees fell out with Shockley and founded Fairchild Semiconductor. Fairchild has become the origin of more than 50 companies in the region. The best known is the Intel chip company, founded by Gordon Moore and Robert Noyce.
What makes Silicon Valley special?
The US West Coast region has the highest concentration of large IT companies in the world. Companies such as Apple, Google’s parent company Alphabet and the Facebook group Meta have their headquarters there.
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In addition, Silicon Valley is characterized by research institutions. Stanford University has its campus in Palo Alto. On the university campus, the two computer scientists Larry Page and Sergey Brin invented a search algorithm that later became the basis for the world’s largest internet search engine, Google.
How important is Stanford University to Silicon Valley?
Stanford University plays a very important role in Silicon Valley. Professor Frederick Terman was Dean of the Department of Economics. To this day, he is regarded as the decisive reason for the founding of the computer company HP. He is said to have pushed his graduates William Hewlett and David Packard to found HP as a company in the 1930s. Terman is also one of the company’s early investors.
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Hewlett and Packard started their business in a garage off the college campus. The address 367 Addison Avenue in Palo Alto is now a popular photo motif. Based on the story of Hewlett and Packard, the founding of companies in the Valley in a garage plays an important role to this day.
After the success of Hewlett and Packard, Terman institutionalized the spin-off of ideas from universities in companies. He built the “Stanford Research Park” where alumni could found their own companies near the university. He also established a network of donors.
Where did the money to build Silicon Valley come from?
The first founders in Silicon Valley had great problems finding investors for their ambitious ideas. Former Fairchild employee Eugene Kleiner recognized a gap in the market and built up one of the most important venture capitalists in the world today, Kleiner Perkins.
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Perkins located his company halfway between San Francisco and San Jose at the exit of the 280 freeway, on what he called Sand Hill Road. Today, almost all of the industry’s major sponsors are located on this street.
How many people live in Silicon Valley?
Since there is no fixed geographic definition for Silicon Valley, the number cannot be quantified exactly. According to the United States Bureau of Statistics, around 3.3 million people lived in the region south of San Francisco up to and including San Jose in 2021. If San Francisco is included as a city, the number rises to more than four million people.
How many companies are in Silicon Valley?
There are thousands of companies in Silicon Valley. The region prides itself on being particularly easy to start a business.
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Since many start-ups can fail and disappear again for a short time, there are no exact figures.
What was invented in Silicon Valley?
The emergence of a number of well-known products or technologies is attributed to research or companies in Silicon Valley. These include the X-ray microscope, videotape, floppy disk drive, laser, microprocessor, personal computer, and inkjet printer.
How much do you earn in Silicon Valley?
Silicon Valley is considered one of the regions in the world with the highest compensation for IT professionals. Data from the American salary platform Levels.fyi for the Handelsblatt show how far the incomes of software developers in California and Germany differ. According to the analysis, programmers as young professionals in the Bay Area earn more than three times as much as a German IT specialist – namely 164,000 US dollars (155,000 euros). For comparison: A programmer in Germany only earns a median of 53,000 US dollars gross (50,000 euros) in his first two years of work.
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According to the evaluation, even experienced programmers can earn significantly more in Silicon Valley than in Germany: The median salary for software developers with more than ten years of professional experience in California is a good 230,000 US dollars (221,000 euros). His counterpart in Germany has to be content with 110,000 US dollars (104,000 euros) – and still with 50,000 dollars less than an IT career starter earns in and around San Francisco.
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