Saturday, January 19, 2008

"Silicon" Valley gone after 50 years

In 1957, the Traitorous Eight left Shockley Semiconductor to form Fairchild. This is the first Silicon Valley spinoff, as well as the real start of the careers for Robert Noyce and Gordon Moore (Intel) and Gene Kleiner (Kleiner Perkins). The next year, Fairchild sold its first product, the 2N697 silicon transistor, and the rest as they say is history.

Saturday, the Merc reported that Intel is closing its last fab in Q3 2008.

The D2 line has been used to pilot production for fabs elsewhere in the US and the world. This is the last major semiconductor fab in Silicon Valley.

The end of the story has been obvious for a long time, even if the timing has not. Given housing costs, salaries, regulation, water and energy issues, manufacturing in the Bay Area has been heading for the exit for more than a decade.

The question raised by Merc readers (in the comment section) is whether Intel plans to eventually move all the R&D away as well. On the one hand, the Bay Area is the most expensive tech cluster in the country (perhaps second only to Tokyo in the world). There is a lot of unique software expertise here, but semiconductor expertise is more broadly dispersed.

Of course, Intel — like HP, IBM, Toyota, Ford, Sony and Nokia — will have R&D dispersed around the world. Some R&D is going to remain in the US, even if not in the valley. Could there be an Intel without R&D at its headquarters? I don’t know.

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