Silicon Valley back on track

The world's most famous high-tech area has been going through some hard times. But it has bounced back full of ideas.

Every half-decade or so, I get a rash of media requests for a comment about the death of Silicon Valley. They come when the area is going through one of its cyclical slumps and I always point out that their questions are somewhat presumptuous.

Even I had my doubts about the Valley's ability to rebound after the bust in 2001, but I need not have worried. Remember that the area has well over 1,500 high-tech companies, led by heavyweights such as Hewlett Packard, Intel, AMD, National Semiconductor, Sun Microsystems, Oracle, Siebel Systems, BEA, Google and Yahoo.

Slowdowns are painful for companies and laid-off employees, but they focus minds on innovation and allow time for R&D projects.

Now that the Valley is in an upswing again, the fruits of these labours are starting to come to light, and some key technologies are emerging that will have an impact in the very near future.

One is in the area of high-speed communications. Technology from a new company called Powerwan is one of the first powerline architectures to solve the last mile issue: how to get data down the final stretch to the office or home.

Powerwan installs a modulator in a 200megawatt (or less) sub-station that uses the power grid to deliver high-speed internet access to any electrical socket. Its ability to distribute high-speed signals to as many as 500 homes from a single modulator sets it apart from other similar technologies.

Powerline transmission in the UK has come under fire for allegedly interfering with RF broadcasts. See our Data over the mains feature here.

Intel is working on new chips that support Wimax, AKA 802.16, a Wi-Fi-based technology that can deliver data as far as 30 miles instead of 200 feet and could provide low-cost links for entire cities. It could also provide voice-over-IP phone links in remote areas and underdeveloped nations where landline phones do not reach.

And of course Intel is making a play for the consumer market with its Entertainment PC (a digital entertainment hub similar to Microsoft's Media Center) and new Liquid Crystal on Silicon chips that could bring 42in displays capable of screening high definition TV to the market as soon as 2005.

Another device causing a lot of buzz is the Ultra Portable Computer (UPC). This is being championed by chip maker Transmeta and is a handheld computer that can run Windows XP and all its applications.

The first company to bring out a UPC is OQO, also located in Silicon Valley. Microsoft co-founder Paul Allen's investment company Vulcan Ventures, and IBM offshoot Antelope, are also working on UPCs that should hit the market later this year.

The devices are larger than a PDA but much smaller than a 10in tablet. A couple of the devices will include either a virtual keyboard or one that folds out as part of the design.

Another Silicon Valley chip maker, famous for chips that drive millions of DVD players, is creating reference designs that many consumer electronics companies are using as platforms for next-generation digital entertainment hubs.

Zoran, whose headquarters are in Sunnyvale CA, is working on a 'smart DVD' system that includes a hard drive, a DVD recordable drive and software that turns it into a personal video recorder while at the same time creating an environment that lets you turn any TV into a powerful digital media entertainment centre.

The concept of a digital entertainment hub based on this type of smart DVD platform is gaining ground, and many of the major consumer electronics companies are adopting these devices as part of their digital home initiatives.

There is one other exciting technology being cooked up in Silicon Valley that is worth mentioning, although I cannot name the company behind it at this time. However, if what it has pans out and it is able to get the technology approved worldwide for use in aircraft, it could radically change the way laptops, PDAs and even cellphones are designed in the very near future.

The company appears to have created a hydrogen fuel cell that can deliver up to 20w to a laptop, and power it for as long as 15 hours on a single replaceable fuel cell.

There are other hurdles to the broader use of this technology, such as creating low-cost cells that can be bought at any airport or corner store like alkaline batteries. But the technology looks promising enough to suggest that fuel cells will be powering small devices sooner rather than later.

Add to this important work at IBM's labs in Almaden that could give us hard drives that can handle terabytes of data, as well as electronic paper coming from Xerox Parc, and you begin to see that Silicon Valley is humming again and ready to help drive technology even deeper into our business and personal lives.