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Silicon Valley and Finland 55the financier could acquire the whole company at a low set price after threeyears, the engineers left the company to spin-off their own businesses todevelop the new technology and reap the financial rewards. Bob Noyce,Gordon Moore, and Andy Grove started Intel, again with venture capital organizedby Arthur Rock, but without the earlier option so that the innovatorownerswould be fully rewarded for their risk-taking. In fact, half of the largestAmerican semiconductor companies, such as Advanced Micro Devices, can betraced back to a round of spin-offs from Fairchild. The same is also true ofmany of the leading venture capital and business services companies in SiliconValley. For example, in addition to Arthur Rock, who was behind Fairchilditself, Intel and Apple, two Fairchild employees Donald Valentine and EugeneKleiner started two of the biggest venture capital firms in Silicon Valley:Sequoia (e.g. Apple) and Kleiner, Perkins, Caufield, and Byers. The leadinghigh-tech marketing firm McKenna Group, which made global brands of Inteland Apple, for example, is also rooted in one of the Fairchild spin-offs whenRegis McKenna decided to start his own company.In 1971, Intel engineers Ted Hoff and Federico Faggin developed the firstmicroprocessor, an invention that Steve Wozniak took advantage of when hestarted the personal computer revolution by building the Apple Computer andfounding the company with Steve Jobs in 1976. Sun Microsystems and CiscoSystems spearheaded the computer networking revolution in the 1980s. Themass breakthrough of the Internet also began in Silicon Valley, with theNetscape graphical web browser in 1994 and the creation of companies likeYahoo! Since the start of the revolution with Fairchild, Silicon Valley hasbecome the world’s leading information technology cluster, which has diversifiedfrom semiconductors to computers, data storage, networking (includingthe Internet), and a whole array of information and communication technologies.Table 2.2 presents the revenue figures for the five biggest companies inSilicon Valley.Table 2.2Top five Silicon Valley information technology companies(revenues for 2003)Company Industry Revenues (US$ billion)1 Hewlett-Packard Computers 73.12 Intel Semiconductors 30.13 Cisco Systems Networking 18.94 Solectron EMS 11.75 Sun Microsystems Computers 11.4Source: Based on Fortune 500 (2004)