Claim: Silicon Valley includes the southern half of the San Francisco Peninsula and southern portions of the East Bay.

Silicon Valley is a nickname for the southern portion of the San Francisco Bay Area , in the northern part of the U.S. state of California . The `` valley '' in its name refers to the Santa Clara Valley in Santa Clara County , which includes the city of San Jose and surrounding cities and towns , where the region has been traditionally centered . The region has expanded to include the southern half of the San Francisco Peninsula in San Mateo County , and southern portions of the East Bay in Alameda County .   The word `` silicon '' originally referred to the large number of silicon chip innovators and manufacturers in the region , but the area is now the home to many of the world 's largest high-tech corporations , including the headquarters of 39 businesses in the Fortune 1000 , and thousands of startup companies . Silicon Valley also accounts for one-third of all of the venture capital investment in the United States , which has helped it to become a leading hub and startup ecosystem for high-tech innovation and scientific development . It was in the Valley that the silicon-based integrated circuit , the microprocessor , and the microcomputer , among other key technologies , were developed . As of 2013 , the region employed about a quarter of a million information technology workers .   As more high-tech companies were established across the Santa Clara Valley , and then north towards the Bay Area 's two other major cities , San Francisco and Oakland , the `` Silicon Valley '' name eventually came to refer to all high-tech businesses in the region . The term is now generally used as a synecdoche for the American high-technology economic sector . The name also became a global synonym for leading high-tech research and enterprises , and thus inspired similar named locations , as well as research parks and technology centers with a comparable structure all around the world .