5 - Silicon Valley, a Chip off the Old Detroit Bloc

Summary

Introduction

Silicon Valley is the envy of the world, one of the most celebrated regions of economic growth in modern history. We are accustomed to thinking of it as the outgrowth of a unique confluence of ingredients. One is its roots as an early incubator of now famous electronics firms, including Hewlett Packard, Varian Associates, and Litton Industries. Another is Stanford University, led by its innovative dean of engineering and eventual provost, Frederick Terman. Yet another is its culture of vertically specialized, non-hierarchically organized firms that define a virtual network of producers. Couple all these ingredients with the growth of the semiconductor industry and the emergence of venture capitalists in Silicon Valley to support it and you get a seemingly unprecedented wave of new, spinoff enterprises in Silicon Valley formed by top employees of incumbent semiconductor firms. Today, these Silicon Valley semiconductor spinoffs are legion, including such famous firms as Fairchild Semiconductor, National Semiconductor, Advanced Micro Devices (AMD), and Intel. Indeed, according to a well-known genealogy prepared by Semiconductor Equipment and Materials International (SEMI), over 100 semiconductor spinoffs arose in Silicon Valley through 1986. Nearly all of them were descended in one way or another from Fairchild, whose direct descendants are so numerous they have been dubbed the Fairchildren.