Digital computers were developed during World War II, but the technological limitations of the period prevented the commercialization and spread of the machines outside of industrial applications. Prior to the development of the transistor, a device which uses a semiconducting material to control the flow of electricity, digital computers relied on expensive, bulky, and unreliable vacuum tubes. The use of vacuum tubes as an industry standard until the early 1950’s meant that most computers prior to that time were room-sized behemoths that required teams of people to be operated.
Under the leadership of William Shockley, two scientists at AT&T’s Bell Labs, John Bardeen and Walter Brattain, built the first working transistor, using germanium as the semiconductor. Soon after, Shockley developed an improved transistor, which used a different type of electron junction. After buying a patent license from Bell Labs to produce Shockley’s transistor in 1952, Pat Haggerty, executive vice president of Texas Instruments, showed in a 1954 demonstration that transistors made using silicon were much less expensive and more reliable than germanium alternatives. The use of silicon transistors soon became a cornerstone of the American technology industry, leading to the creation of the first small, portable electronic device: the transistor radio.
Though Shockley would win the 1956 Nobel Prize in Physics jointly with Brattain and Bardeen for the development of the transistor, his relationship with the two men quickly deteriorated after 1947, with both scientists leaving his team at Bell Labs due to a dislike of his management style. In general, Shockley experienced a high level of conflict with his collaborators and the executive officers at Bell Labs. This conflict motivated him to leave Bell Labs and form the Shockley Semiconductor Laboratory. The company, based in the Stanford Research Park in Palo Alto, CA, was the first major semiconductor production firm in the San Francisco Bay Area.
Just as Shockley’s peers at Bell Labs had disliked working with him, many of the engineers Shockley had recruited to form Shockley Semiconductor found that working with Shockley added difficulty to their jobs. In 1957, a group of eight malcontented engineers, led by Robert Noyce and Gordon Moore, left Shockley to form Fairchild Semiconductor. Along with Shockley, these engineers established a model for behavior that would become a defining trait of Silicon Valley: leaving a firm to start one’s own company. The repetition of this behavior would eventually lead to the demise of Fairchild, in spite of the company’s early success. In the late 1950’s, concurrent developments by Robert Noyce and Jean Hoerni at Fairchild led to the creation of the first microchip, containing several silicon transistors in a single circuit. From 1961 to 1963, Fairchild Semiconductor experienced remarkable growth, but after its parent company, Fairchild Camera and Instruments, took greater control of the company in 1965, many engineers left to form their own companies, known as “Fairchildren”. The most prominent of these Fairchildren was Intel, founded by Robert Noyce and Gordon Moore in 1968.
Stewart Brand, a regular participant in Ken Kesey’s Merry Prankster Acid Tests, published the first Whole Earth catalog in 1968, with the aim of marketing the concept of a personal computer to fellow counterculture computer hobbyists who distrusted centralized authority. Later that year, Brand participated in his friend Doug Engelbart's “Mother of All Demos” in San Francisco, in which concepts for technologies like email, video calling, computer mice, and graphical users interfaces were displayed. Engelbart's demo had a profound impact on the computer industry, and many of Engelbart’s ideas would be developed further at Xerox’s Palo Alto Research Center (PARC), a research institution founded in 1970.
Lee Feldstein, Fred Moore, and Gordon French, avid readers of the Whole Earth Catalog, founded the Homebrew Computer Club, a gathering of Bay Area computer enthusiasts, in 1975. It was at a meeting of this club that the founders of Apple Computer, Steve Jobs and Steve Wozniak, met for the first time. Jobs motivated Wozniak, who had been designing and building a personal computer, to begin a commercial enterprise, and soon after founding Apple in 1975, the two began selling their first computer, the Apple I. In 1977, the sales of Apple’s second computer, the Apple II, elevated the company from a hobbyist firm to a large-scale operation. During the next few years, Microsoft, a company which at the time had been recently founded by Bill Gates, would generate most of its revenue writing software for the Apple II.
After Apple introduced the Macintosh, a computer whose design was based primarily on Xerox PARC’s Alto, their commercial growth skyrocketed. With the personal computer market surging, and the development of internet products like America Online on the horizon, Silicon Valley had begun to take its modern form. From the postwar period to the beginning of the information age, the region had become the center of the nation’s technology industry, with a culture based upon the rapid growth and failure of startup firms.