[News Inside] The Origin of Silicon Valley That Left Silicon Valley

Started in a Garage with Just $500
California Named It the 'Birthplace of Silicon Valley'
Corporate Culture Becomes the Spirit of Silicon Valley
Hewlett-Packard (HP)

▲William Hewlett (left) and David Packard (right), founders of HP

[Asia Economy Reporter Kwon Jae-hee] A place where global IT companies such as Apple, Google, Intel, Nvidia, and Adobe gather. The center of the software industry stretching from Palo Alto to San Jose in California, USA. This is 'Silicon Valley.'

Now regarded as the headquarters of renowned global IT companies and a vast city-like area, its origins began in a small, humble garage. At the center of this is Hewlett-Packard (HP).

Hewlett-Packard was named after its co-founders William Hewlett and David Packard. The two, classmates at Stanford University, founded HP in a garage in Palo Alto and released an audio oscillator. This eventually became the beginning of Silicon Valley.

Hewlett and Packard first met in 1934 while majoring in mechanical engineering at Stanford University. After graduation, David Packard briefly left Silicon Valley to work at GE in New York but returned to Stanford in 1938 to continue his studies. The founding of HP was encouraged by their advisor, Professor Frederick Terman. At that time, there were few quality jobs in the West to retain talent, and many graduates moved East. To retain these talents, Professor Terman established a research park around Stanford University and encouraged his students to start companies, which led to the creation of the vast Silicon Valley complex.

HP's modest beginnings started with just $500. In 1938, Hewlett and Packard founded HP in Packard's home garage.

[Image source=EPA Yonhap News]

The first product they developed after founding the company was an audio oscillator called the '200A.' This device generates specific frequency ranges for testing purposes, and upon its release, Walt Disney's studio sound engineers showed interest. Walt Disney used this device in the 1940 film Fantasia.

In 1940, they moved out of the garage into an office, and the business expanded into producing military supplies such as radios and radar, growing rapidly in the 1950s. In 1957, HP went public, and in 1961, it was listed on the New York Stock Exchange.

As HP developed, other IT companies like Intel moved into the Palo Alto and Santa Clara areas where Stanford's research park was located, transforming the region into a hub of advanced technology.

In 1989, the state of California designated the modest garage at 367 Edison Street, where HP was born, as the 'Birthplace of Silicon Valley' and registered it as a historic site.

HP, once a symbol of Silicon Valley, is finally leaving. On the 1st of this month (local time), Hewlett Packard Enterprise (HPE), which provides enterprise cloud services, announced it would move its headquarters from San Jose, California, to Houston, Texas. This decision was made in response to the spread of remote work due to the COVID-19 pandemic.

HPE stated, "Houston, the largest employment hub in the U.S., is an attractive place to secure diverse talent," adding that it is advantageous for recruiting and retaining talent.

Local media view HPE's headquarters relocation as a symbolic event revealing the declining appeal of Silicon Valley, historically a cradle for IT startups. HPE was created in 2015 when Hewlett-Packard (HP), the first company to grow from Silicon Valley into a global enterprise, split into enterprise cloud services and personal computer businesses. However, HP decided to keep its headquarters in Palo Alto.

Although HP and HPE are now based in Palo Alto and Houston, Texas, respectively, the corporate culture established by HP has become the spirit of Silicon Valley and is widely spread.

At the time, HP's corporate culture was considered revolutionary. It provided health insurance to all employees and implemented open floor offices without walls to facilitate idea sharing. It also emphasized trust in individuals, teamwork, organizational flexibility, achievement-oriented culture, and corporate ethics. These values spread throughout Silicon Valley and became its culture.

The founders, Hewlett and Packard, passed away at the ages of 87 and 83 in 2001 and 1996, respectively.