Electronic Components & Semiconductor Manufacture

The US electronic components and semiconductor manufacturing industry consists of about 5,000 companies with combined annual revenue of about $150 billion. Large companies include Intel, Texas Instruments, Micron Technology, and Advanced Micro Devices (AMD). The industry is highly concentrated: the 50 largest companies generate about 70 percent of revenue.

COMPETITIVE LANDSCAPE

The industry depends highly on demand from the computer industry and makers of telecommunications products such as cell phones, which can vary sharply from year to year. Companies can be successful producing standard parts at low cost or by producing highly specialized components. Small companies can compete effectively with large ones by producing specialized products or developing new applications. Technological expertise is extremely important. The industry is highly automated: average annual revenue per employee is about $300,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include semiconductors (computer chips); printed circuit boards; and various components like electron tubes and electronic connectors. Semiconductors account for almost 60 percent of industry revenue, circuit boards for 25 percent.

The manufacture of computer chips starts with long cylinders of pure silicon (or other semi-conducting materials, such as gallium arsenide) cut into thin "wafers." In photolithography, various layers of conducting and insulating materials are deposited on a wafer and etched away after exposure to light or other beams in patterns that trace the various elements of the integrated circuits. Hundreds of chips can be produced on one wafer. The thickness of the integrated circuit lines ...