Silicon Valley becomes unpopular? Why did the "Silicon Hill" Austin emerge rapidly?

Since Bill Hewlett and David Packard, who founded Hewlett-Packard in 1938, started their businesses in Silicon Valley in northern California and southern San Francisco Bay Area, the local area has become a major technology industry center. However, after the epidemic broke out and the work-at-home model became common, there was a trend of tech giants leaving, including Oracle and HPE moving their headquarters to Texas, and Tesla's Elon Musk also moving to Austin, Texas.

Working from home reduces Silicon Valley's advantage

Because Austin gathers many well-known technology companies, and because the city has a hilly terrain, it is called "Silicon Hill" in the United States, which echoes the Western Silicon Valley.

According to LinkedIn data, from April to October of this year, Austin, Texas, attracted the most people to move in, followed by Phoenix in Arizona, Nashville in Tennessee, and Tampa in Florida.

One of the reasons why Silicon Valley companies and wealthy individuals moved out was the high local housing prices and rents. The number of people moving out of the city this year is higher than in 2019, reflecting the trend of working from home, many people are moving to other cities for lower living costs.

For example, if we compare the cost of living rankings of major cities by the American Community Economic Research Council, New York City and the San Francisco Bay Area rank first and third. Austin and Phoenix, which attracted the most people to emigrate, ranked 77 and 76, and Nashville and Tampa were even behind 100.

In terms of housing prices, the average house price in Austin is US$371,475 and the average rent is US$1,517, which is much lower than the US$1,385,194 and US$4,081 in the San Francisco Bay Area, and the US$2,248,750 and US$4,876 in New York City.

The giants of Dell, Samsung and Apple gather

As the capital of Texas, Austin has an area of only about 704 square kilometers and a population of less than 2 million. As a large number of technology giants such as Dell, Samsung, Nvidia, Intel, Apple, AMD, ARM, Google, and NXP gather here, the semiconductor and computer industries have developed rapidly in recent years and have attracted a large number of local and overseas engineers to work and start businesses.

According to statistics from the Austin Chamber of Commerce, a total of 39 companies have entered the local area this year, such as the venture capital firm 8VC opened by the founder of Palantir, Joe Londonsdale, and the e-cigarette manufacturer Juul Labs. Tesla is also building a 4 million square foot factory near Austin, which is estimated to bring 5,000 jobs.

Laura Huffman, CEO of the Austin Chamber of Commerce, once said that "Austin is the capital of talent." There are currently 25 colleges and universities in the district, and 47% of the population holds a university degree.

As more and more science and technology companies are stationed in Austin, they also attract talented people. In fact, the US technology industry has long been thirsty for talent. According to a survey by Career Advisory Board, a job market consulting firm, the US software development talent shortage will reach 1.4 million in 2020.

It is reported that the average annual salary of a software engineer in Austin is approximately US$76,998; an annual salary of a senior software engineer is approximately US$106,434. The starting salary of a hardware engineer who graduated with a master's degree is generally around US$100,000.

For example, Zhao Xinjie, who works at the Samsung Austin R&D Center, went to North Carolina State University to study for a master's degree in computer engineering after graduating from a major university in Beijing with a bachelor's degree in electronic engineering.

After graduating in 2015, he spent several months to find his current job, and successfully obtained the H1B visa, with an annual salary of US$90,000 before tax. Austin, Los Angeles and Washington are gradually rivaling the San Francisco Bay Area in salary. Last year, the salary of Austin's technology staff increased by 7% compared to 2016. Globally, salaries in this industry have increased by 5% to $135,000.