Importance of military funding

Importance of military funding

Before switching over to the events at Intel, the aspect of military funding is to be dealt with, since it has played an important role in the early days of Silicon Valley.

During World War II, after the Japanese attack at Pearl Habor in 1942, a great deal of the U.S. military forces and of the military production was moved to California. Within a few years, California - formerly an agricultural state - became a booming indus trial state and the military centre of the USA.)

After the war, in the time of the Cold War and the arms race, the Korean conflict, the "missile gap" and the space program, the Pentagon kept ordering high-technology products from the armament factories in California. Many companies established R&D depart ments and production facilities in Santa Clara County near Stanford university, which provided them with bright engineers and scientists, and were largely supported by the Pentagon's demand for electronic high-tech products.

Examples for such firms are FMC, GTE, Varian Associates, Westinghouse, and finally Lockheed, which opened its R&D department in the Stanford Research Park in 1956, and started Lockheed Missiles and Space Company (LMSC) in Sunnyvale. Lockheed's move to Nort hern California was crucial for the developments in Santa Clara County; today the company is Silicon Valley's largest employer with more than 24,000 people.)

Military funding for high-tech products was responsible for the early growth of Silicon Valley in the 1950s and 1960s. The U.S. Department of Defense was the biggest buyer of these products, e.g. its purchases represented about 70 percent of the total prod uction of ICs in 1965.)

While this share in chip demands has dropped to 8 percent today, the Pentagon remains the biggest supporter of new technologies and accounts for most of the purchases of the latest developments.

Martin Groeger
Last modified: Mon Jul 8 05:22:17 PDT