Computer and Electronic Product Manufacturing Industry Profile
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Computer and Electronic Product Manufacturing Industry Profile

Employment is projected to decline 12 percent over the 2006-16 period due to productivity improvements, imports, and the movement of some jobs to lower wage countries. The industry is characterized by significant research and development activity and rapid technological change. Professional and related personnel account for 1 out of 3 workers.

This industry differs somewhat from other manufacturing industries in that production workers make up a relatively small proportion of the workforce. Technological innovation characterizes this industry more than most others and, in fact, drives much of the industry’s production. This unusually rapid pace of innovation and technological advancement requires a high proportion of engineers, engineering technicians, and other technical workers who carry out extensive research and development.

 
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The importance of promoting and selling the products manufactured by the various segments of the industry requires knowledgeable marketing and sales workers. American companies in this industry manufacture and assemble many products abroad to take advantage of lower production costs and favorable regulatory environments.

Electronic products contain many intermediate components that are purchased from other manufacturers. Companies producing intermediate components and finished goods regularly choose to locate near each other, because doing so allows companies to receive new products more quickly and lower their inventory costs. It also facilitates joint research and development projects which benefit both companies. As a result of having the skilled workforce that fosters product improvement, several regions of the country have become centers of the electronics industry. The most prominent of these centers is Silicon Valley, a concentration of integrated circuit, software, and computer firms in California’s Santa Clara Valley, near San Jose. However, there are several other centers of the industry throughout the country.

Globalization has become a major factor in the electronics manufacturing industry, often making it difficult to distinguish between American and foreign companies. Many American companies are opening plants and development centers overseas and overseas companies are doing the same in the U.S. Many products are being designed in one country, manufactured in another, and assembled in a third. The U.S. electronics industry tends to be focused on high-end products, such as computers and microchips. Even so, many components of final products manufactured in the U.S. are produced elsewhere and shipped to an American plant for final assembly.

Although some of the companies in this industry are very large, most are relatively small. The history of innovation in the industry explains the startup of many small firms. Some companies are involved in design or research and development (R&D), whereas others may simply manufacture components, such as computer chips, under contract for others. Often, an engineer or a physicist will have an innovative idea and set up a new company to develop the associated product. Once developed, the company licenses a production company to produce the product, which is then sold by the original company. Although electronic products can be quite sophisticated, production methods are generally similar, making it possible to manufacture many electronic products or components with a relatively small investment. Furthermore, investors often are willing to put their money behind new companies in this industry because of the history of large paybacks from some successful companies.

Products manufactured in this industry include computers and computer storage devices, such as DVD drives, and computer peripheral equipment, such as printers and scanners; communications equipment—wireless telephones and telephone switching equipment; consumer electronics, such as televisions and audio equipment; and military electronics—for example, radar, communications equipment, guidance for “smart” bombs, and electronic navigation equipment. The industry also includes the manufacture of semiconductor products—better known as computer chips, or integrated circuits—which are key components of computers and many other electronic products. Two of the most significant types of computer chips are microprocessors, which are the central processing units of computers, and memory chips, which store information.
[ Excerpted from Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2008-09 Edition - Computer and Electronic Product Manufacturing ]