Capital

Public demand came before private capital

Bay Area

Before the Cold War, Silicon Valley had strong universities but a small electronics industry with no large commercial market for what they produced.

The federal government, through the Department of Defense, DARPA, NASA and the US Air Force, became its major customers for semiconductors, computing and communications. The government acted as a sophisticated early customer, with contracts setting firms concrete engineering problems tied to military and space requirements. Fairchild Semiconductor and later Intel grew on repeat demand for ever more advanced components, particularly through missile guidance systems and the Apollo programme.

That early demand de-risked the technology and proved the returns, drawing private investors in behind it.