Computer Manufacturing Industry Profile

The US computer manufacturing industry includes about 1,200 companies with combined annual revenue of about $75 billion. Major companies include Dell, Hewlett-Packard, and IBM. The industry is highly concentrated: the top 50 companies generate about 90 percent of revenue.

Globally, computer manufacturing generates about $300 billion in annual revenue, according to Computer Industry Almanac. Manufacturing is concentrated in the Asia/Pacific region, home to industry leaders such as Toshiba Corporation (Japan), Lenovo (China), and Foxconn (a division of Taiwan-based Hon Hai Precision Industry).

COMPETITIVE LANDSCAPE

Demand is tied to consumer and business income. The profitability of individual computer companies depends on purchasing and production efficiencies, and on technological expertise. Large companies have economies of scale in purchasing and production. Small companies can compete successfully by specializing in certain products or by developing superior technology. The industry is capital-intensive: annual revenue per employee is about $460,000.

US imports of computer equipment amount to nearly $100 billion, more than half from China. Exports are about $45 billion, with more than a third going collectively to Mexico and Canada.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include PCs, printers, monitors, mainframes, servers, and disk drives. Personal computers account for about 40 percent of industry revenue; mainframes and servers, 13 percent; and storage devices, about 10 percent.

The manufacturing process for PCs consists of integrating circuit boards, disk drives, and input/output devices into a final product. Companies typically assemble PCs from components bought from other manufacturers. ...