Silicon Valley still tops for chip companies

September 11, 2007: 5:45 AM ET

Silicon Valley is still the headquarters location of choice for chip makers, research firm iSuppli says. In fact, the firm estimates that a quarter of all global chip companies have headquarters in the area south of San Francisco.

Last year 56 Silicon Valley semiconductor suppliers raked in $68.2 billion in sales. That's still far ahead of the second-place locale, Taiwan's Hsinchu City, which managed $50.2 billion.

"Silicon Valley chip makers serve virtually every major application market in the global electronics industry," said Dale Ford, vice president with iSuppli. "Although the region is heavily associated with the computer industry, with companies including Intel (INTC), Advanced Micro Devices (AMD) and nVidia (NVDA), semiconductor suppliers in the region also have a strong presence in the consumer electronics, wired communications and industrial segments, which represent four of

the six major markets for chips."

Silicon Valley is still weak in the automotive and wireless markets, iSuppli notes.

Also from iSuppli:

While many semiconductor companies have their headquarters located in Silicon Valley, they have moved most of their operations elsewhere. Semiconductor suppliers often locate their management and senior engineers in the Valley, while conducting production and design activities overseas or in other parts of the United States.

However, the Valley remains a hotbed for semiconductor startups that play a key role in promoting industry innovation.

Much basic innovation still occurs in the Valley. For example, most new emerging memory technologies are being developed in the region, although actual production will occur in South Korean, Taiwanese and

Japanese fabs.

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