Starting in the 1950s, high technology companies in northern California began a spectacular growth that continued through the end of the 20th century. The major products included personal computers, video games, and networking systems. The majority of these companies settled along a highway stretching from Palo Alto to San Jose, notably including Santa Clara and Sunnyvale, all in the Santa Clara Valley, the so-called "Silicon Valley", named after the material used to produce the integrated circuits of the era.

This era peaked in 2000, by which time demand for skilled technical professionals had become so high that the high-tech industry had trouble filling all of its positions and therefore pushed for increased visa quotas so that they could recruit from overseas. When the "Dot-com bubble" burst in 2001, jobs evaporated overnight, and for the first time over the next two years more people moved out of the area than moved in. This somewhat mirrored the collapse of the aerospace industry in southern California some twenty years earlier.