Saturday, November 12, 2011

SME: Profile of a Globalizing Industry

Working on another project, I chanced across some data on the Semiconductor Manufacturing Equipment (SME) industry. In 2009, the last year for which we have hard Census data, it was 5.6 percent of the $98.3 billion domestic electronics industry, at least as measured in shipments. Herewith a profile of it from 1992 through 2011:


This industry makes the tooling for other sectors of the electronics industry. Thus in a sense it stands in relation to electronics as a whole like the machine tool industry stands in relation to all manufacturing. Electronics got its start in 1958 with the invention of the integrated circuit; a decade later Intel was launched. This fundamentally American technology has been globalizing, globalizing, globalizing—and what that means for the domestic industry is plainly visible in the graphic above.

Now, of course, we’re looking at what is undoubtedly a natural phenomenon, if our faith in the Hidden Hand is unflagging. Indeed, with the very best of efforts, technologies can never be held close and protected from spreading around the globe. But the downward trend visible here also represents employment decline from 81,900 people in 1992 to 19,362 people in 2009. This illustrates the inherent conflict that arises when we let nature take its course on the one hand and protect the domestic employment on the other. At best, of course, we can only slow things down.

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