Electronics—with semiconductor devises and integrated circuitry—has revolutionized modern manufacturing and information systems. With its continuous stream of technological innovation, electronics has become the cornerstone of products, services, and processes that now pervade virtually every aspect of contemporary life. Indeed, it is difficult to think of a product or service in whose production or use has not been affected in some fashion by electronics. Numerous products and services—household appliances, motor vehicles, computers and office equipment, automated production processes, avionics, communications, complex weapons systems, and a myriad others—are wholly dependent upon electronics.

The importance of the electronic and electrical equipment industry lies in its pivotal role in the high technology orientation of the nation’s economy, in particular, the strong interrelationship that exists between economic growth and productivity on the one hand and technological innovations on the other. Beyond its technological importance, electronic and electrical equipment is one of the leading manufacturing industries of the United States. In 1998, electronic and electrical equipment employed 1.7 million workers with shipments valued in excess of $400 billion.

This industry report uses industry definitions and concepts that underlie the U.S. government’s Standard Industrial Classification (SIC) system. In the SIC system, electronic and electrical equipment and components is a major industry, one of twenty such industries that form the manufacturing sector, entitled food and kindred products. According to the Standard Industrial Classification Manual, there are thirty-seven separate electronic and electrical equipment industries. Each of the approximately 17,200 electronic and electrical equipment plants operating in the United States in 1998 was placed in one of these thirty-seven industry subsectors, and their electronic and electrical equipment products were further divided into 101 well-defined electronic and electric equipment product classes.

Electronic and electrical equipment and components (SIC 36) is organized into the following eight major groups:

• Electric transmission and distribution equipment (SIC 361)—including transformers, power switches, circuit breakers and switchboards;

• Electrical industrial apparatus (SIC 362)—including motors and generators, carbon and graphite products, relays and industrial controls, and electrical industrial apparatus;

• Housing appliances (SIC 363)—including microwave and convection ovens, barbecues, freezers and refrigerators, dryers and washers, vacuum cleaners, electric housewares and fans;

• Electric lighting and wiring equipment (SIC 364)—including electric lamp bulbs and tubes, current- and noncurrent-carrying wiring devices, electric lighting fixtures, and vehicular lighting equipment;

• Household audio and video equipment and audio recordings (SIC 365)—including household audio and video equipment and audio tapes and disks;

• Communications equipment (SIC 366)—including telephone apparatus, and radio and television broadcasting equipment;

• Electronic components and accessories (SIC 367)—including electron tubes, printed circuit boards, semiconductors, electronic capacitors and resistors, coils and transformers, and inductors and connectors; and

• Miscellaneous electric machinery, equipment and supplies (SIC 369) —including batteries, electrical equipment for internal combustion engines, magnetic and optical recording media and high energy particle acceleration (e.g., laser) systems.

Under this classification, the electronic and electrical equipment industry does not include computers and office equipment, which is classified under industrial machinery.

Figure 1

The lion’s share of U.S. and Washington employment and production in electronic and electrical equipment is found in electronic components and accessories. These semiconductors are the fundamental building blocks for the electronics industry. Numerous industries, such as computer, telecommunications, instruments, medical equipment, and transportation use these electronic component products. In 1998, 39 percent of total U.S. employment and production was in semiconductors and other components. For Washington, more than half of the state’s employment and production in electronic and electrical equipment was in semiconductors and other components.

Technological innovation is the driving force behind this leading edge semiconductor industry. The history of the semiconductor industry during its forty years of existence is one of continuous technical progress that has the enhanced component performance and reliability, increased the variety of components, and increased component integration. A major factor in accelerating demand is the significant growth in applications. The importance of semiconductors derives not so much from its pervasive use as from the fact that technological progress in many of these end-use markets (e.g., computers, telecommunications, industrial automated processes, instruments, military equipment) cannot be disassociated with semiconductor technology.

In 1998, Washington electronic and electrical equipment industry employed 18,200 workers; representing roughly 5 percent of the state’s manufacturing work force. Recent growth in electronic and electrical equipment has been explosive; since 1992 the industry has added more than two-fifths of its current work force. Recent growth of the industry has been advanced by major plant expansion announcements by world-wide leaders in the semiconductor industry—Intel, SEH America, and Matsushita. However, the Asian financial crisis has sent a chill throughout the national semiconductor industry. Semiconductor firms in Washington State have not escaped unscathed, resulting in cancelled plans and closures.

Figure 2

Employment in Washington Electronic & Electrical Equipment Industry,
1961-1998
Source: Washington Employment Security Department

For more detail of above graphic