Silicon Valley is the southern area of San Francisco, which is located in northern California. Silicon Valley earned its name because it was the original home of the semiconductor chip making industry which uses a fine sand known as Silicon as raw materials. Silicon Valley received its name when a newspaper article used the phrase in a series of articles in 1971. Valley came from the fact that they were located in Santa Clara Valley and Silicon was because of the fact that the semiconductor chip production industry used the fine sand as raw material for making their product. Silicon Valley is important because it is the location of various headquarters for major Internet corporations.
Information from:
http://www.brighternaming.com/Silicon_Valley_name.html
http://en.wikipedia.org/wiki/Silicon_Valley