There's a vocal minority of individuals who claim silicon is no longer at the heart of Silicon Valley. The innovation and resources that once went into semiconductors, they say, is now being directed predominantly at the likes of social biosciences, networking and gaming. These new growth areas overshadow the technological foundation of this amazing place, they argue, adding that the trend of moving engineering to Asia will put the final nail in the coffin.

Let me set the so-called pundits straight: There's still a whole lot of silicon left in Silicon Valley. Market-making innovation abounds at the device level right here. We are not yet done building wonderful castles of sand.

What is true is that, in a departure from the hyper-growth days of the '80s and '90s, this storied region is now more cautious in investments, more amenable to consolidating companies to get a greater return, and ever more willing to move selected development overseas.

It is concerning that the venture capitalists who have seeded the fields with entrepreneurs are placing their focus in other areas. The amount of capital needed to create a chip company and the relative payout no longer fit their model. Exit strategies for their portfolio companies rely more and more on strategic acquisition at lower valuations. Further, the number of IPOs has been cut by a third since the 1990s, while the time to exit has doubled, to between seven and nine years.

These trends are positive neither for the VC limited partners nor for the overall economy, as post-IPO companies tend to hire at more than twice the national rate.

There are many who believe this has made us uncompetitive against some of our fierce silicon rivals in greater China. Their public markets raise capital at lower financial metrics. The Taiwanese exchange is now even wooing private companies in the United States by billing itself as the "real" tech market of the future. Approximately 30 percent of companies on the Gre Tai Securities Market are involved in semiconductors. The region's financial muscle is behind the industry, providing capital to let it grow and prosper--mirroring the early days of Silicon Valley.