IPA Provides Useful Information about the Computer and Electronic Product Manufacturing Industry

Computer and Electronic Product Manufacturing


  • Employment is projected to decline 12 percent over the 2002-12 period, mainly due to productivity improvements.
  • The industry is characterized by significant research and development activity and rapid technological change.
  • Professional and related personnel account for 3 out of 10 workers.


The computer and electronic product manufacturing industry produces computers, computer-related products such as printers, communications equipment, and home electronic equipment, as well as a wide range of goods used for both commercial and military purposes. In addition, many electronics products or components are incorporated into other industries’ products, such as cars, toys and appliances.

Products manufactured in this industry include computers and computer storage devices, such as disk drives, and computer peripheral equipment, such as printers and scanners; communications equipment, such as wireless telephones and telephone switching equipment; consumer electronics, such as televisions and audio equipment; and military electronics, such as radar, communications equipment, guidance for "smart" bombs and electronic navigation equipment. This industry also includes the manufacture of semiconductors—silicon or computer "chips," or integrated circuits— which constitute the heart of computers and many other advanced electronic products. Two of the most significant types of computer chips are microprocessors, which make up the central processing system of computers, and memory chips, which store information. Technological innovation characterizes this industry more than most others and, in fact, drives much of the industry’s production. Many new products reflect a convergence of technologies. Such products include digital cameras and hand-held devices that permit wireless Internet access.

The computer and electronic product manufacturing industry differs from other manufacturing industries in that production workers account for a much lower proportion of all workers. The unusually rapid pace of innovation and technological advancement requires a high proportion of engineers, engineering technicians and other highly technical workers to continually develop and produce new products. Likewise, the importance of promoting and selling the products manufactured by the various segments of this industry requires knowledgeable marketing and sales workers. American companies manufacture and assemble many products abroad because of lower production costs and new trade agreements.

Companies producing intermediate components and finished goods frequently locate near each other because doing so allows easier access to recent innovations. Electronic products contain many components—and sometimes even major parts, such as integrated circuits—that often are purchased from other manufacturers. As a result of having the skilled workforce that fosters product improvement, some areas 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 electronics manufacturing plants throughout the country.

To a large extent, electronics manufacturing has become truly global and it is difficult to characterize many companies and their products as American or foreign. The movement of foreign companies to manufacture some goods in the United States does not change the fact that many products are being designed in one country, manufactured in another and assembled in a third. Highly sensitive and sophisticated products such as semiconductors and computers are being designed and manufactured in the United States, for example, but it remains likely that other parts of final products, such as the keyboards and outer casings, are made somewhere else and shipped to yet another site for final assembly.

Although some of the companies in this industry are very large, most are actually 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 physicist will have an innovative idea and set up a new company to develop the product. Although electronic products can be very sophisticated, it has been possible to manufacture many electronic products or components (not necessarily finished products) 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 very successful companies. Success always will depend on innovation, and, although investment costs are rising, there should continue to be opportunities to develop good ideas.

The rapid pace of innovation in electronics technology makes for a constant demand for newer and faster products and applications. This demand puts a greater emphasis on R&D than is typical in most manufacturing operations. Being the first firm to market a new or better product can mean success for both the product and the firm. Even for many relatively commonplace items, R&D continues to result in better, cheaper products with more desirable features. For example, a company that develops a new kind of computer chip to be used in many brands of computers can earn millions of dollars in sales until a competitor is able to copy the technology or develop a better chip. Many employees, therefore, are research scientists, engineers and technicians whose job it is to continually develop and improve products.

The product design process includes not only the initial design, but also development work, which ensures that the product functions properly and can be manufactured as inexpensively as possible. When a product is manufactured, the components are assembled, usually by soldering them to a printed circuit board. Often tedious, hand assembly requires both good eyesight and coordination, as many of the parts are very small. However, because of the cost and precision involved, assembly and packaging are becoming highly automated.


In general, computer and electronics manufacturing enjoys relatively good working conditions, even for production workers. In contrast to those in many other manufacturing industries, production workers in this industry usually work in clean and relatively noise-free environments. Computer chips are manufactured in "clean rooms," in which the air is filtered and workers wear special garments to prevent any dust from getting into the air. A speck of dust will ruin a computer chip.

In 2002, the rates of work-related injuries and illness per 100 full-time workers were 1.9 in computer and office equipment, 2.1 in communications equipment, 3.1 in electronic components and accessories, 5.5 in household audio and video equipment and 1.5 in search and navigation equipment. These rates were, with one exception, lower than the 5.3 average for the private sector. However, some jobs in this industry may have risks. For example, some workers who fabricate integrated circuits and other components may be exposed to potentially hazardous chemicals and working with small parts may cause eyestrain.

Most employees work regular 40-hour weeks, but pressure to develop new products ahead of competitors may result in some research and development personnel working extensive overtime to meet deadlines. The competitive nature of the industry makes for an exciting, but sometimes stressful, work environment—especially for those in technical and managerial occupations.


The computer and electronic product manufacturing industry employed 1.5 million wage and salary workers in 2002.

The industry comprised about 21,000 establishments in 2002, many of which were small, employing only one or a few workers. Large establishments of 250 workers or more employed the majority—63 percent—of the industry’s workforce.


Given the importance of R&D to the industry, it is not surprising that a large proportion—about 3 in 10—of all workers are in professional and related occupations. About 12 percent of these are engineers—predominately electrical and electronics engineers and computer hardware engineers, but also including many industrial and mechanical engineers These workers develop new products and devise better, more efficient production methods. Engineers may coordinate and lead teams developing new products. Others may work with customers to help them make the best use of the products. Computer systems analysts, database administrators, and computer scientists are employed throughout the industry as both development and production methods become more computerized. Other professionals include mathematical and physical scientists, and technical writers.

About 6 percent of workers are engineering technicians, many of whom work closely with engineers. They help develop new products, work in production areas, and sometimes help customers install, maintain and repair equipment. They also may test new products or processes to make sure everything works correctly.

Despite the relatively high proportion of professional and technical workers in electronics manufacturing, more than 3 out of 10 employees are production workers. Many are assemblers, who place and solder components on circuit boards or assemble and connect the various parts of electronic devices. Semiconductor processors initiate and control the many automated steps in the process of manufacturing integrated circuits or computer chips. Electrical and electronic equipment assemblers are responsible for putting together products, such as computers and appliances, telecommunications equipment and even missile control systems. Some assemblers are highly skilled and require significant experience and training to assemble major components. A skilled assembler may put together an entire subassembly, or even an entire product, especially when products are made in relatively small numbers. Other, less skilled assemblers often work on a production line, attaching one or a few parts and continually repeating the same operation. Increasingly, as production work becomes more automated, assemblers and other production workers monitor the machinery that actually does the assembly work. Inspectors, testers, sorters, samplers, and weighers use sophisticated testing machinery to ensure that devices operate as designed.

About 14 percent of workers in the industry are in management, business, and financial operations occupations. In this industry, top management is much more likely to have a technical background than are its counterparts in other industries. This is especially true in smaller companies, which often are founded by engineers, computer scientists or other technical professionals.

About 14 percent of workers in this industry hold office and administrative support or sales and related jobs. Sales positions require technical knowledge and abilities and as a result, engineers and technicians often may find opportunities in sales or sales support.


Workers with different levels of education find employment opportunities in the computer and electronic product manufacturing industry. Entry to engineering occupations generally requires at least a bachelor’s degree in engineering, although those with 4-year degrees in physical science, computer science, or other technical areas can sometimes qualify as well. Some positions, however, may require a master’s degree or higher, or relevant work experience. Computer systems analysts or scientists usually need a degree in computer science or a related field and in many cases, they also must have considerable programming experience. Because companies often are founded by professionals with technical backgrounds, opportunities for advancement into executive or managerial positions may arise for experienced workers who keep up with rapid changes in technology and possess the business expertise necessary to succeed in the rapidly changing economy.

Training for engineering technicians is available from a number of sources. Although most employers prefer graduates of 2-year postsecondary training schools—usually technical institutes or junior colleges—training in the U.S. Armed Forces or through proprietary schools also may meet employer requirements. Engineering technicians should have an aptitude for math and science. Entry-level technicians may begin working with a more experienced technician or engineer. Advancement opportunities for experienced technicians may include supervisory positions or movement into other production and inspection operations.

Though assembly workers generally need only a high school diploma, assemblers in the computer and electronic product manufacturing industry may need more specialized training or experience than do workers in other manufacturing industries. Precision assembly work can be extremely sophisticated and complex, and some precision assembly jobs may even require formal technical training. A 1-year certificate in semiconductor technology is good preparation for semiconductor processor operator positions; for more highly skilled technician positions, an associate degree in electronics technology or a related field is necessary. Again, advancement opportunities depend not only on work experience, but also on the level of technical training and the ability to keep up with changing technology.


In general, earnings in the computer and electronic product manufacturing industry are high although this is partly because many of the lower wage production jobs have been automated or exported to other countries. Average weekly earnings of all production or non-supervisory workers in the industry were $643, higher than the average of $506 for all industries in 2002.


Wage and salary employment in the computer and electronic product manufacturing industry is expected decline by 12 percent between 2002 and 2012, compared with a 16 percent projected increase in all industries. Although the output of this industry is projected to increase more rapidly than that of any other industry, employment will still decline as a result of continued rapid productivity growth—the ability of the industry to produce more and better products with fewer employees. Employment also will be adversely affected by continued increases in imports of electronic and computer products, and by a more recent trend—outsourcing of some professional functions, such as computer programming and engineering, to lower-wage countries. Despite the overall projected decrease in employment, the technological revolutions taking place in computers, semiconductors and telecommunications, as well as the need to replace the many workers who leave the industry due to retirements or other reasons, should continue to provide many employment opportunities in this industry, especially in research and development. Products of this industry, especially powerful computer chips, will continue to enhance productivity in all areas of the economy.

The projected change in employment over the 2002-12 period varies by industry segment. Although demand for computers should remain relatively strong worldwide, employment is expected to decline 27 percent in computers and peripheral equipment and 15 percent in semiconductor and other electronic component manufacturing due to the introduction of new technology and automated manufacturing processes and due to a slowdown in growth of output in these segments from previously high levels. These segments also will continue to face strong import competition. Employment in navigational, measuring, electromedical and control instruments manufacturing also is expected to decrease 12 percent due to automation of the production of increasingly sophisticated equipment. Employment in audio and video equipment manufacturing also is expected to decrease, by 8 percent, largely due to continued import competition as well as productivity improvements. However, employment in communications equipment manufacturing is expected to increase 5 percent due to strong demand and rapid technological developments such as wireless phones. Ownership of wireless phones has grown quickly in recent years; continuing improvements in quality and services should lead to even greater growth between 2002 and 2012. The only other segment expected to increase employment, by 11 percent, is the manufacturing and reproduction of magnetic and optical media.

Industry data is republished with permission by the Bureau of Labor Statistics

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