13 ms·

No idea if Mr. Thiel is right in this decade, but long term silicon valley has lost its main advantage: silicon. The physical business of building computer par

No idea if Mr. Thiel is right in this decade, but long term silicon valley has lost its main advantage: silicon. The physical business of building computer parts, especially chips, involves a lot of hard science and deep magic and requires a kind of priesthood steeped in that magic. SV's original success was built on this -- it got rich because it is where the silicon priests lived. But now things have evolved so the it is the Chinese who know how to build the computers and (sometimes) the Californians program them. Except writing apps is not really deep magic, and is something that can be done anywhere. So SVs advantages move to ever more nebulous things like networking and mentorship -- which are also human universals that happen everywhere.

CalChris 9y ago
An argument can be made that when it was first called Silicon Valley it should have been called Metal Oxide Valley. Originally, SV lived off defense, then made disk drives and now Google, Apple, Facebook, Oracle, ... reign supreme. I think SV will continue to shape shift. It is however, getting kinda expensive.
abritinthebay 9y ago
Silicon Valley has not been about the raw production of silicon chips for over 30 years now. It's been about software and design of hardware for at least that long. You're also ignoring the networking advantages (personal, career, and business) that proximity provides. They are not trivial. It's why SV has stuck around post dot-com.
- B1FF_PSUVM 9y ago
  It's almost like the VCs in whatchamacallit road tell everybody else to telecommute, but they themselves don't care much about moving around to keep an eye on the troops. Lazy bas --- err, I mean, damn efficient, well done, old beans. (Screw the cattle who have to deal with the fallout. Not adding value.)
leggomylibro 9y ago
It's a shame that this happened, but you can see how it did. Those chips were built on the fervor of people imagining what we could someday do with them. They could create a connected world, solve and create so many problems on a global scale...it's not super surprising that their successors went on to do those things. What is surprising, and shameful, is how investors reacted, buying into the mania hook line and sinker. There cannot be a Bell Labs or Fairchild Semi in silicon valley today, because they could not promise 10,000,000% user growth and a massive acquisition in N years. It seems like the market equivalent of snorting pixie sticks instead of eating a balanced meal, but I'm not the person with billions of dollars to swing around.
- mi100hael 9y ago
  > There cannot be a Bell Labs or Fairchild Semi in silicon valley today, because they could not promise 10,000,000% user growth and a massive acquisition in N years. Sure there can, they just can't have VC as a part of their business plan. Thankfully, more and more startups are realizing that VC is not their only option, nor usually their best one.
  - leggomylibro 9y ago
    Good point - they will still need someone to front a lot of money, though. Talent and film-deposition facilities ain't cheap. I guess they could go with a Bajillionaire Patron, or get funding through usury. Sorry, those aren't even close to fair comparisons, but 'bootstrapping' does seem pretty out of reach these days, for people who don't already have 8-10 figures laying around.
    - mi100hael 9y ago
      Yeah, I agree. It's not like Bell Labs was ever "scrappy," though.
      - leggomylibro 9y ago
        Ha, yeah I guess they did sort of get the 'wealthy benefactor' thing with Ma Bell.
11thEarlOfMar 9y ago
Two elements of 'Silicon' remain vibrant in Silicon Valley, even if the Fabs are all gone: First, the Design software and the design itself is still largely in place here. Companies like Cadence, Synopsis, Intel, nVidia, AMD, and many other chip firms still draw on Silicon Valley's work force to design the most complex chips. Second, the equipment that is capable of fabricating the most complex chips is almost exclusively developed here. Companies like Applied Materials, Lam Research, and KLA-Tencor make the machines that perform mind boggling feats of physics and chemistry[0]. Those companies are currently dominating 3 of the 5 top spots for revenues globally. One of the other 5 is in the Netherlands (ASML), the other in Japan (Tokyo Electron). So the actual fabs (along with their Superfund legacy) are gone. But the Silicon innovators are still here and thriving. [0] https://www.youtube.com/watch?v=4G8wXQGEBrA https://www.youtube.com/watch?v=4G8wXQGEBrA
- derefr 9y ago
  Sure, design happens in SV, but "design" is something you can do on a laptop (well, as long as you have a beefy box somewhere else on the network to run the layout step.) It's similar to how NYC is the capitol of fashion design: yes, a lot of designers have congregated there, but any individual designer can still do their job anywhere else in the world without much hindrance. That's not like how SV used to be: before automated layout, design and fabrication were forced to be vertically integrated—you needed a real fab to iterate your design against. So the designers needed to stay where the fabs were, and the fabs would get built where the designers were. Uncoupling the two means that the fabs can go where it's cheap, and IC design is now just another kind of whiteboard-driven engineering, rather than a kind of monastic ritual performed within a warehouse-sized machine.
marchenko 9y ago
Andy Grove would agree with you [1]. He argued that a lot of valuable innovation occurs during the scaling/manufacturing process. If you offshore that step, all of the proficiency and innovation that occurs 'at the bench' develops - and is capitalized upon - elsewhere. [1](https://www.bloomberg.com/news/articles/2010-07-01/andy-grove-how-america-can-create-jobs https://www.bloomberg.com/news/articles/2010-07-01/andy-grov...)

CalChris 9y ago

An argument can be made that when it was first called Silicon Valley it should have been called Metal Oxide Valley. Originally, SV lived off defense, then made disk drives and now Google, Apple, Facebook, Oracle, ... reign supreme. I think SV will continue to shape shift. It is however, getting kinda expensive.

abritinthebay 9y ago

Silicon Valley has not been about the raw production of silicon chips for over 30 years now. It's been about software and design of hardware for at least that long. You're also ignoring the networking advantages (personal, career, and business) that proximity provides. They are not trivial. It's why SV has stuck around post dot-com.

B1FF_PSUVM 9y ago
It's almost like the VCs in whatchamacallit road tell everybody else to telecommute, but they themselves don't care much about moving around to keep an eye on the troops. Lazy bas --- err, I mean, damn efficient, well done, old beans. (Screw the cattle who have to deal with the fallout. Not adding value.)

leggomylibro 9y ago

It's a shame that this happened, but you can see how it did. Those chips were built on the fervor of people imagining what we could someday do with them. They could create a connected world, solve and create so many problems on a global scale...it's not super surprising that their successors went on to do those things. What is surprising, and shameful, is how investors reacted, buying into the mania hook line and sinker. There cannot be a Bell Labs or Fairchild Semi in silicon valley today, because they could not promise 10,000,000% user growth and a massive acquisition in N years. It seems like the market equivalent of snorting pixie sticks instead of eating a balanced meal, but I'm not the person with billions of dollars to swing around.

mi100hael 9y ago
> There cannot be a Bell Labs or Fairchild Semi in silicon valley today, because they could not promise 10,000,000% user growth and a massive acquisition in N years. Sure there can, they just can't have VC as a part of their business plan. Thankfully, more and more startups are realizing that VC is not their only option, nor usually their best one.
- leggomylibro 9y ago
  Good point - they will still need someone to front a lot of money, though. Talent and film-deposition facilities ain't cheap. I guess they could go with a Bajillionaire Patron, or get funding through usury. Sorry, those aren't even close to fair comparisons, but 'bootstrapping' does seem pretty out of reach these days, for people who don't already have 8-10 figures laying around.
  - mi100hael 9y ago
    Yeah, I agree. It's not like Bell Labs was ever "scrappy," though.
    - leggomylibro 9y ago
      Ha, yeah I guess they did sort of get the 'wealthy benefactor' thing with Ma Bell.

11thEarlOfMar 9y ago

Two elements of 'Silicon' remain vibrant in Silicon Valley, even if the Fabs are all gone: First, the Design software and the design itself is still largely in place here. Companies like Cadence, Synopsis, Intel, nVidia, AMD, and many other chip firms still draw on Silicon Valley's work force to design the most complex chips. Second, the equipment that is capable of fabricating the most complex chips is almost exclusively developed here. Companies like Applied Materials, Lam Research, and KLA-Tencor make the machines that perform mind boggling feats of physics and chemistry[0]. Those companies are currently dominating 3 of the 5 top spots for revenues globally. One of the other 5 is in the Netherlands (ASML), the other in Japan (Tokyo Electron). So the actual fabs (along with their Superfund legacy) are gone. But the Silicon innovators are still here and thriving. [0] https://www.youtube.com/watch?v=4G8wXQGEBrA https://www.youtube.com/watch?v=4G8wXQGEBrA

derefr 9y ago
Sure, design happens in SV, but "design" is something you can do on a laptop (well, as long as you have a beefy box somewhere else on the network to run the layout step.) It's similar to how NYC is the capitol of fashion design: yes, a lot of designers have congregated there, but any individual designer can still do their job anywhere else in the world without much hindrance. That's not like how SV used to be: before automated layout, design and fabrication were forced to be vertically integrated—you needed a real fab to iterate your design against. So the designers needed to stay where the fabs were, and the fabs would get built where the designers were. Uncoupling the two means that the fabs can go where it's cheap, and IC design is now just another kind of whiteboard-driven engineering, rather than a kind of monastic ritual performed within a warehouse-sized machine.

marchenko 9y ago

Andy Grove would agree with you [1]. He argued that a lot of valuable innovation occurs during the scaling/manufacturing process. If you offshore that step, all of the proficiency and innovation that occurs 'at the bench' develops - and is capitalized upon - elsewhere. [1](https://www.bloomberg.com/news/articles/2010-07-01/andy-grove-how-america-can-create-jobs https://www.bloomberg.com/news/articles/2010-07-01/andy-grov...)