Silicon Valley is the southern part of the San Francisco Bay Area in California in the United States.  The term originally meant the innovators and manufacturers  of silicon chip who worked here, but now means all the high-tech businesses in the area. Even though it's not truly a valley, it is a term for the high-tech sector generally.

Silicon Valley includes the northern part of Santa Clara Valley and adjacent communities in the southern parts of the San Francisco Peninsula and East Bay. It reaches  from Menlo Park (on the Peninsula) and the Fremont/Newark area in the East Bay down to San Jose.

Currently, many locations in Silicon Valley are full of tourists.

Origin of the term
The term Silicon Valley was coined by journalist Don Hoefler in 1971. He used it as the title of a series of articles "Silicon Valley USA" in a weekly trade newspaper Electronic News which started with the January 11, 1971 issue. Valley refers to the Santa Clara Valley, located at the southern end of San Francisco Bay, while Silicon refers to the high concentration of semiconductor and computer-related industries in the area. These and similar technology firms slowly replaced the orchards which gave the area its initial nickname, the Valley of Heart's Delight.

History
The San Francisco Bay Area had long been a major site of U.S. Navy work, as well as the site of the Navy's large research airfield at Moffett Field. A number of technology firms had set up shop in the area around Moffett to serve the Navy. When the Navy moved most of its West Coast operations to San Diego, NASA took over portions of Moffett for aeronautics research. Many of the original companies stayed, while new ones moved in. The immediate area was soon filled with aerospace firms.

However, there was almost no civilian "high-tech" industry in the area. Although there were a number of excellent schools in the area, graduating students almost always moved east or south (that is, to Los Angeles County) to find work. This was particularly annoying to Frederick Terman, a professor at Stanford University. He decided that a vast area of unused Stanford land was perfect for real estate development, and set up a program to encourage students to stay in the area by enabling them to easily find venture capital. One of the major success stories of the program was that it convinced two students to stay in the area, William Hewlett and David Packard. In 1939, they founded Hewlett-Packard in Packard's garage, which would go on to be one of the first "high tech" firms in the area that was not directly related to NASA or the U.S. Navy.

Notable companies

Thousands of high technology companies are headquartered in Silicon Valley; among those, the following are in the Fortune 1000:

Adobe Systems
Advanced Micro Devices (AMD)
Agilent Technologies
Apple Inc.
Applied Materials
Cisco Systems
eBay
Electronic Arts
Facebook
Google
Hewlett-Packard (HP)
Intel
Intuit
Juniper Networks
Maxtor
Memorex (Brand of Imation)
National Semiconductor
Network Appliance
NVIDIA Corporation
Oracle Corporation
Sun Microsystems (acquired by Oracle Corporation)
Symantec
Xilinx
Yahoo!

Additional notable companies headquartered (or with a significant presence) in Silicon Valley include (some defunct or subsumed):

3Com (headquartered in Marlborough, Massachusetts)
Adaptec
Amdahl
Aricent
Atari
Atmel
Covansys
Cypress Semiconductor
Foundry Networks
Fujitsu (headquartered in Tokyo, Japan)
Hitachi Global Storage Technologies
Knight-Ridder (acquired by The McClatchy Company)
LSI Logic
McAfee
Netscape (acquired by AOL)
NeXT Computer, Inc. (acquired by Apple)
Palm, Inc.
PalmSource, Inc. (acquired by ACCESS)
PayPal (now part of eBay)
Rambus
Redback Networks
SanDisk
SAP AG
Silicon Graphics
Solectron
TiVo
VA Software (Slashdot)
VeriSign
Veritas Software (acquired by Symantec)
VMware (acquired by EMC)

Befitting its heritage, Silicon Valley is home to the high-tech superstore chain Fry's Electronics.

For a larger list of companies, see :Category:Companies based in Silicon Valley

Universities
Carnegie Mellon University (West Coast Campus)
San José State University
Santa Clara University
Stanford University
National University (San José Campus)
DeVry University (Fremont Campus)

Technically the following universities are not located in Silicon Valley, but have been instrumental as sources of research and new graduates:
University of California, Berkeley
California State University, East Bay
University of California, Davis
University of California, Santa Cruz
Monterey Institute of International Studies - Fisher Graduate School of International Business

Cities
A number of cities are located in Silicon Valley (in alphabetical order):

Cupertino
East Palo Alto
Fremont
Gilroy
Los Altos
Los Altos Hills
Los Gatos
Menlo Park
Morgan Hill
Mountain View
Milpitas
Palo Alto
Redwood City 
San Jose
Santa Clara
Saratoga
Sunnyvale

Cities sometimes associated with the region:
Newark
Pleasanton
Livermore
Scotts Valley
Santa Cruz 
Union City

Trivia 
In the James Bond film A View to a Kill, villain Max Zorin plans to destroy Silicon Valley by detonating explosives between the Hayward Fault and San Andreas Fault, causing them to flood. He dubs the operation 'Main Strike' in order to gain complete control of the microchip market by selling his own and destroying the competition.

Further reading
Hackers: Heroes of the Computer Revolution by Steven Levy, Garden City, New York: Anchor Press/Doubleday (1984)
Behind the Silicon Curtain: The Seductions of Work in a Lonely Era, Dennis Hayes, London: Free Association Books (1989)
Silicon Valley, Inc.: Ruminations on the Demise of a Unique Culture , The San Jose Mercury News (1997)
Cultures@Silicon Valley, J. A. English-Lueck, Stanford: Stanford University Press (2002)
The Silicon Valley of Dreams: Environmental Injustice, Immigrant Workers, and the High-Tech Global Economy, David Naguib Pellow and Lisa Sun-Hee Park, New York University Press (2003)
What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry, John Markoff, Viking (2005)
The Silicon Boys: And Their Valleys Of Dreams, David A. Kaplan, Harper Perinneal (April 2000), 
Cities of knowledge: Cold War science and the search for the next Silicon Valley , Margaret Pugh O’Mara, New Jersey: Princeton University Press, (2005)

References

Other websites 
California's Historic Silicon Valley 
Reference about Don Hoefler
Website focused on Silicon Valley news, backed by the San Jose Mercury News
Silicon Valley 150 for beginning of 2004 as a PDF file 
Silicon Valley Association of Startup Entrepreneurs 
The Silicon Valley Cultures Project
Stanford Linear Accelerator center
Growth of a Silicon Empire by Henry Norr published at the end of 1999 in the San Francisco Chronicle
Douglas Engelbart
Red tile roofs in Bangalore: Stanford's look copied in Silicon Valley and beyond

Business
San Francisco Bay Area