Relying on government contracts doesn't sound like the behaviour of a growth company. Government processor technical requirements aren't likely to align with commercial requirements. And low risk government cheques tend to push out any higher risk commercial innovation.
This is kind of ironic, because the only reason the semiconductor industry exists as it does today is because massive amounts of defense contracts in the early days of semiconductor manufacturing. The US's massive defense spending sometimes functions in a more productive way than one would guess.
I'd be hard pressed to come with an argument that there's any other reason that today's software world is in the SF Bay Area. Government contracts attracted initial silicon startups, noncompetes ensured entrepreneurship, VC developed around the talent, eventually software became bigger than the hardware as the hardware was commoditized. Amazon and Microsoft were successful in the Seattle area, but otherwise the concentration of talent in the SF Bay is hard to beat
