Computer Manufacturing Industry Overview

Excerpt from Computer Manufacturing Report

Companies in this industry manufacture computers, such as mainframes, servers, personal computers (PCs), workstations, and mobile PCs (laptops, netbooks, and tablets), as well as computer peripheral equipment, including storage devices, terminals, and input/output devices such as printers, monitors, and keyboards. Major US companies include Dell, Hewlett-Packard, and IBM, all based in the US, along with Foxconn and Quanta (both of Taiwan); Hitachi, Toshiba, and NEC (Japan); and Lenovo (China).

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 highly concentrated: the top 50 companies generate about 90 percent of revenue.

Products, Operations & Technology

The three major product categories -- computer peripheral equipment, storage devices, and computers -- each account for about one-third of US computer manufacturing industry revenue. Companies typically assemble PCs from components bought from other manufacturers. Key components like "motherboards" are specially made for a particular product, while disk drives and other components may be off-the-shelf parts. Despite automation gains, some assembly work is still labor-intensive. Manufacturers of specialized devices like printers, monitors, and hard disk drives may also buy some components from outside vendors. The manufacture of some products requires highly sophisticated machinery.