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Kyiv Shevchenko UniversityChemistry DepartmentStudent’s reportOn Economicsby Constantine Nikitin ContentsSilicon Valley - what is that? 3Stanford University 3Hewlett Packard - the garage myth 5HP: Foundation and first years 5The rise of HP up to the present 6The HP Way - an example of corporate culture for a whole industry 7HP today. 7The rise of Silicon Valley 10Invention of the transistor 10Shockley Semiconductor 11Importance of military funding 12Intel Corp. 13Foundation in 1968 13First products - Moore's Law 13"Ted" Hoff's first microprocessor 14Cooperation with IBM in the 1980s 15Intel today 16The emergence of the PC industry 17Altair - the first PC 18The first computer shops 19Homebrew Computer Club 19The Apple Story 19"Woz" and Jobs - the two "Steves" 19The first Apple 20Building up the company 21Apple II - starting the personal computer boom 22Turbulences in the early 1980s 23The Lisa project 23The Macintosh revolution 24John Sculley and Steve Jobs 25Apple today. 27

This question may have occurred to many people's minds when they came across the term Silicon Valley. What hides behind it is mostly unknown to them, although the revolutionary inventions and developments, which have been made in this «Valley», affect everyone's daily life, and it is hard to imagine our modern civilization without them. Silicon Valley is the heartland of the microelectronics industry that is based on semiconductors.Geographically, it is the northern part of the Santa Clara County, an area stretching from the south end of the San Francisco Bay Area to San Jose, limited by the Santa Cruz Mountains in the west and the northern part of the Diablo Range in the east. It covers a thirty- by ten-mile strip extending from Menlo Park and Palo Alto, through Los Altos, Mountain View, Sunnyvale, Cupertino and Santa Clara, down to San Jose.)The name Silicon Valley was coined in 1971 by Don C. Hoefler, editor of the Microelectronics News, when he used this term in his magazine as the title for a series of articles about the semiconductor industry in Santa Clara County. "Silicon" was chosen because it is the material from which semiconductor chips are made, which is "the fundamental product of the local high-technology industries.")Silicon Valley saw the "development of the integrated circuit, the microprocessor, the personal computer and the video game") and has spawned a lot of high-tech products such as pocket calculators, cordless telephones, lasers or digital watches.Looking at our high-tech society in which the PC has become indispensable - both in business and at home, replacing the good old typewriter by word processing - the crucial role of Silicon Valley as the birthplace of the microelectronics and then the PC revolution becomes even more evident.Silicon Valley is also seen as a place where many entrepreneurs backed by venture capital have made the American Dream come true as "Overnight Millionaires."This makes Silicon Valley a philosophy saying that everything which seems impossible is feasible and that improvements in our society can take place daily, as Thomas McEnery, the mayor of San Jose, the capital of the Santa Clara County, puts it.)Thomas Mahon calls it the "economic and cultural frontier where successful entrepreneurship and venture capitalism, innovative work rules and open management styles provide the background" for the perhaps "most profound [...] inquiry ever into the nature o f intelligence" which might, together with "bioengineering and 'artificially intelligent' software, [...] affect our very evolution.")On the following pages I would like to convey the image of Silicon Valley as the nucleus of modern computing, presenting the most important events, which comprise the developments of the three major companies Hewlett-Packard, Intel and Apple.

The story of the Silicon Valley starts with Stanford University in Palo Alto, which has been of fundamental importance in the rise of the electronics industry in Santa Clara County.In the 19th century, Spanish settlers, who have been the first white visitors to California, founded civilian communities and gave them Spanish names such as San Francisco, Santa Clara or San Jose. They liked the Mediterranean climate in the Santa Clara Valley, which was very hospitable. This area came to be used by farmers and ranchers cultivating orchards, for it provided "some of the world's finest farming soil.")In 1887, Leland Stanford, a wealthy railroad magnate who owned a large part of the Pacific Railroad, decided to dedicate a university to his son's memory who had died due to a severe disease shortly before he intended to go to a university.Leland Stanford and his wife built Leland Stanford Jr. University on 8,800 acres of farmland in Palo Alto and also donated 20 million dollars to it. The university opened in 1891 and "would in time become one of the world's great academic institutions.")In 1912, Lee De Forest, who had invented the first vacuum tube, the three-electrode audion, discovered the amplifying effect of his audion while working in a Federal Telegraph laboratory in Palo Alto. This was the beginning of the Electronics Age, and "amateur radio became an obsession") at Stanford University.Frederick Terman, who was the progenitor of the initial Silicon Valley boom, changed the state of this university fundamentally. Today he is also known as the "godfather of Silicon Valley.") Terman was born in 1900, and as the son of a Stanford professor (who developed the Stanford-Binet IQ tests) he had grown up on the campus. After his graduation from Stanford University he decided to go East to the Massachusetts Institute of Technology (MIT), which was the leading university in technology then. He studied under Vannevar Bush, who was one of America's leading scientists, and was

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