Silicon Valley

What Is Silicon Valley?

The term Silicon Valley refers to a region in the south San Francisco Bay Area. The name was first adopted in the early 1970s because of the region's association with the silicon transistor, which is used in all modern microprocessors. The area is notable for the vast number of technology companies that are headquartered there.

As such, Silicon Valley is a global hub for technological innovation, where hundreds of companies call it home. It is also known for being a center for innovation, entrepreneurial spirit, and a lifestyle founded on technologically based wealth.

Understanding Silicon Valley

Silicon Valley covers an area of 1,854 square miles and is home to more than three million people. It is located in the Bay region of California. Although its boundaries are somewhat nebulous, they generally include:

The region's largest city is San Jose. It's also home to Stanford University and several state university campuses. This academic presence has helped fuel a rich research and development (R&D) synergy throughout the Valley.

The number of high-profile ventures born in Silicon Valley has made the region an attractive target for venture capital firms and investors. There were as many as 117 venture capital-backed initial public offerings (IPOs) in the region valued at about $253 billion as of the beginning of December 2020. A total of 38 Fortune 500 companies located in Silicon Valley as of 2020, including:

Special Considerations

The median household income in Silicon Valley surpassed those reported in San Francisco, California, and the United States. As of 2019, Silicon Valley households earned an average of $134,615 per year, while those in San Francisco and California earned $123,859 and $80,440. The national average totaled $65,712.

Silicon Valley is one of the wealthiest regions in the world. Forbes reported there were 365 tech billionaires across the globe with a combined net worth of $2.5 trillion. The 20 richest in this sector were worth $1.2 trillion combined. In 2018, 143 tech billionaires were reportedly living in Silicon Valley.

A number of business leaders decided to leave the region, taking their businesses to other parts of the United States. For instance, Tesla (TSLA) chief executive officer (CEO) Elon Musk announced he was moving to Texas in December 2020. His announcement followed other major companies, such as Hewlett Packard (HPE) and Oracle (ORCL).

Business leaders leading the move out of Silicon Valley cited reasons like overall political climate in the region as well as looser COVID-19 restrictions in other parts of the country (compared to California).

A Brief Timeline of Key Silicon Valley Developments

Major Companies in Silicon Valley

Some of the major companies that call Silicon Valley home. Some of them include:

Where Is Silicon Valley in California?

Silicon Valley is located in the southern part of the San Francisco Bay Area of California. It encompasses more than 1,850 square miles in area.

What Is Silicon Valley Famous For?

Silicon Valley is known as a hub for technology companies, including Apple, Facebook, Cisco, and other major companies like Visa and Chevron. The region attracts a great deal of venture capital and is home to some of the world's richest people.

Which Cities Are Part of Silicon Valley?

San Jose is the largest city in Silicon Valley. The region also includes Santa Clara, Redwood City, Mountain View, Palo Alto, Menlo Park, Cupertino, and Sunnyvale.

What Does Silicon Valley Unicorn Mean?

A Silicon Valley unicorn is the term given to a private startup in the region that is valued at over $1 billion. The term unicorn is commonly used in the venture capital industry. For instance, San Jose-based Zoom Video Communications (ZM) was valued at $1 billion in 2017. Founded in 2011, the company went public in 2019.