This industry classification includes establishments primarily engaged in manufacturing electronic coils, transformers, and inductors. Establishments primarily engaged in manufacturing electrical transformers are classified in SIC 3612: Power, Distribution, and Specialty Transformers; those manufacturing transformers and inductors for telephone and telegraph apparatus are classified in SIC 3661: Telephone and Telegraph Apparatus; and those manufacturing semiconductors and related devices are classified in SIC 3674: Semiconductors and Related Devices.
334416 (Electronic Coil, Transformer, and Other Inductor Manufacturing)
According to the U.S. Census Bureau, shipments in the electronic coil, transformer and other inductor industry grew from $1.4 billion in 1999 to $1.65 billion in 2000. The cost of materials increased from $545 million to $638 million over the same time period. Employees in 2000 numbered 17,283, of whom 13,192 were production workers earning an average hourly wage of $10.38.
The pioneering figure in the industry was English chemist and physicist Michael Faraday (1791-1867): credited with discovering the phenomenon of electro-magnetic induction in 1831, he was also the first person to use a magnetic circuit to connect two electric circuits. In his experiments with induction, Faraday developed an early version of the transformer. The earliest patent for a power transformer was granted to C. Zipernowski, O. Blathy, and M. Deri of Budapest in 1885. Deri also received the first patent for a distribution transformer in 1885.
"Inductor" is a generic term for an electronic coil, sometimes referred to as an electronic choke. Inductors either filter or select certain frequencies within AC or pulsating DC circuits. In his Basic Electricity and Electronics, Delton T. Horn defined inductors and inductance as follows: "An inductor is a device capable of storing magnetic energy in a circuit. Typically it consists of a coil of wire around some type of core, which may be magnetic or nonmagnetic. Inductance is directly proportional to the square of the number of turns (of wire). An inductor opposes changes in current. It also opposes current, and this opposition increases as the frequency of the signal increases." Coil wire must be coated with an insulating material (usually varnish, lacquer, or enamel) to prevent turns of wire from coming into electrical contact. The greater the ferrous content of the core, the greater the coil's inductance. Coils with nonferrous cores are referred to as "air core" inductors.
In his Basic Concepts and Passive Components, Sy Levine defined a transformer as: "A component consisting of a group of separate and unconnected lengths of wire wound around a common core. Its purpose is to provide an efficient transfer of electrical power between circuits connected to its various sections while maintaining electrical isolation between them. This transfer of power is accomplished magnetically." Transformers serve a number of functions, and transformer types are defined by their function. Among the most important of these types are power transformers, output transformers, radio frequency (RF) transformers, and pulse transformers. Power transformers convert distribution voltages (typically 110-220 volts AC) to other levels required by electrical and electronic devices. Output transformers function to transfer signals from an audio amplifier to a loudspeaker. RF transformers function to transfer signals between stages of radio frequency amplification circuits. Pulse transformers function to transfer signals between stages of digital electronic systems.
"The chief end uses of coils and transformers are in stereos and other home entertainment equipment, computers, telecommunications equipment, and industrial and control instruments," according to the U.S. Industrial Outlook. As with other electronic components, the growth of the coil and transformer industry was tied up with the growth of radio broadcasting after World War I. Stringent demands were made on all electronic components during World War II. This led to a large number of technological improvements, among them standardization, energy efficiency, miniaturization, ease of maintenance, and reliability—especially in the face of mechanical shocks, vibration, temperature extremes, humidity, and high altitude. During these years, resin-encased transformers were developed, as were oil-filled transformers sealed in metal housings.
Electronic coils and transformers are part of a class of electronic components called passive components. They differ from active components, such as vacuum tubes and transistors, in that they can neither distinguish voltage polarity nor amplify a signal. In 1995, the top nine types of coils and transformers according to product share were, in descending order, pulse transformers, computer, and other (15.5 percent); plate and filament transformers (13.5 percent); toroidal windings (10.7 percent); audio transformers (9.2 percent); radio frequency coils (4.8 percent); radio frequency chokes (4.7 percent); low frequency chokes (3.9 percent); IF transformers (2.2 percent); and television transformers and reactors (2.2 percent). (The "other" category accounted for 33.2 percent of product share in 1991, up from 22.9 percent in 1982.)
Employment of production workers declined from 19,100 in 1988 to 16,600 in 1991, but grew to 21,300 by 1995. The U.S. Bureau of Labor Statistics made employment forecasts at the SIC 367 level for 20 occupational categories. Based on projected changes from 1990 to 2005, employment was expected to level off in five occupations, whereas nine occupations were projected to show double-digit increases by 2005—occupations accounting for 23 percent of total employment in 1990. The occupations with projected declines were those directly associated with production processes; those with projected increases included managerial, technical, and sales personnel. Projections made for the electronic capacitors industry alone would have varied from these figures, but past employment trends in the industry suggested consistency with projections made at the SIC 367 level.
Employment of production workers in the industry was 17,000 in 1995, continuing a declining trend from a peak of 21,200 in 1983. Employment of production workers was lower in 1994 than in all years of the prior decade. The industry was highly labor intensive, having only 20 percent as much investment per production worker as that for the manufacturing sector as a whole. Annual hours worked by production workers in the industry were 7 percent lower on average than those worked in the manufacturing sector at large, and hourly wages were 34 percent lower.
In the 1993 edition of their Electronic Market Data Book, the Electronic Industries Alliance (EIA) published their forecast for sales of defense-related electronics for years 1993-2002. EIA summarized their forecast as follows: "Despite the forecast of a flat budget for defense procurement, there will be increasing purchases of electronic equipment, with contractors the winners. Production will be limited to the most advanced weapon systems and high technology will be inserted into existing equipment through modifications and upgrades. In addition, a majority of the research and development investment will be in electronics. Suppliers of state-of-the-art electronic systems can therefore expect modest growth in their defense market."
The value of shipments in the electronic coils and transformers industry declined every year from 1988 to 1991. This pattern appeared to breakdown in the mid-1990s, however, with the estimated value of shipments growing to $1.56 billion in 1995, up from $1.38 billion in 1994. The U.S. Industrial Outlook noted that export growth could play an important role for the industry. It reported that "Since the primary end market for coils and transformers are consumer electronic products, such as television sets, U.S. exports will grow in conjunction with increased production in the major consumer electronics (industries) in Mexico, Japan, Singapore, Hong Kong, and Taiwan. China is expected to be a strong long-term growth market for U.S. exports." Annual capital investments showed consecutive declines between 1989 and 1991. Annual capital investments exceeded $30 million in 1982 and 1983 but in no year thereafter up to 1991 (all values in current dollars).
The United States had a trade surplus in electronic coils and transformers of $101 million in 1992, compared to a deficit of $3.11 billion for all passive components for that year. Exports of electronic resistors produced in the United States increased by 8 percent in 1992, reaching $501 million. Mexico was by far the largest export market for electronic coils and transformers produced in the United States, accounting for 67 percent of U.S. exports in 1992. The United States ran a $140 million surplus with Mexico in electronic coils and transformers in that year. Other important export markets included Canada, Singapore, Taiwan, Hong Kong, and Japan.
Imports of electronic coils and transformers into the United States increased by 23 percent in the first half of 1993. The three largest importers of electronic coils and transformers into the United States were, in order of descent, Mexico, Japan, and Taiwan. In the first half of 1993, imports from Japan increased by 39 percent, whereas imports from Taiwan decreased by 18 percent.
The most important trends in coil and transformer production were continued miniaturization and weight reduction, as well as surface mounting. Surface-mounted devices, or SMDs, offered a number of advantages over traditional components with wire leads inserted through holes in printed circuit boards. Since SMDs could be placed on both sides of a circuit board, they optimized space and thus reduced cost. SMDs were lighter than components with wire leads and enabled automated assembly techniques. SMDs made possible shorter distances between components, which reduced circuit capacitance and resistance and minimized interference. As a result of size constraints, coils with high levels of inductance were very difficult to produce in integrated circuits. Integrated coils were generally produced by forming flat spirals of metal on the face of a circuit.
After declining for three consecutive years in the late 1990s—from $1.52 billion in 1997 to $1.50 billion in 1998 and to $1.40 billion in 1999—the value of industry shipments recovered in 2000, reaching $1.65 billion. The total number of industry employees declined from 19,034 in 1998 to 17,283 in 2000; as a result costs associated with payroll dropped from $467 million to $463 million.
Industry leaders included Valor Electronics Inc. of San Diego, California; American Precision Industries Inc. (API) of Buffalo, New York; Products Unlimited Corp. of Stirling, Illinois; and Midcom Inc. of Watertown, South Dakota. API, founded in 1946, generated net sales of $58.1 million in the third quarter of 1999, an increase of 5.6 percent over 1998 third quarter sales of $55.0 million. API earnings of $2.0 million for the third quarter of 1999 represented an increase of 6 percent over 1998 third-quarter earnings of $1.9 million. The publicly held firm's secondary activities included the manufacture of heat transfer products, electromagnetic clutches, and brakes used in rotary control applications. Products Unlimited, a privately held firm founded in 1978, purchased a line of electrical contactors from Cooper Industries in 1992. Midcom was a privately held firm operating since 1968. It had total employment of 2,210 in 1997. It built additional factories in Huron, South Dakota in 1992; Aberdeen, South Dakota in 1994; Waverly, Iowa in 1995; and Nogales, Mexico in 1996.
There was a considerable amount of new product development in the electronic coil and transformer industry in the 1990s. Beta Transformer Technology introduced a series of surface-mount transformers that were only 0.13 inch thick. The J.R. Miller Division of Bell Industries began the production of four new series of surface-mount inductors. Schaffer EMC announced the development of a new series of toroidal inductors. Ohmite Manufacturing, primarily a producer of electronic resistors, began production of miniature high-current radio-frequency inductors. The Signal Transformer Co. announced its development of a high-power transformer that was the first in its class to meet international certification standards.
Significant developments were made in the production of thermoplastic encapsulated coils, which the May 1993 issue of Appliance described as follows: "Recent developments include the first successful encapsulation of integrated circuit chips in an electrical device; further increases in the production of thermoplastic-encapsulated solenoids, sensors, transformers, motor components and other coil devices; new wire-friendly nylon resins that minimize magnet wire corrosion; and direct encapsulation of components with crimped connections as a low-cost alternative to the potting of complex circuits." Thermoplastic encapsulated coils were one of the more promising products the industry had to offer, and demand for these devices was rising.
The U.S. Department of Energy's Argonne National Laboratory and the Intermagnetics General Corp. announced the development in 1993 of a superconducting coil with a magnetic field 50 thousand times as strong as that produced by Earth. The American Superconductor Co. received a $1.9 million, three-year contract from the U.S. Department of Commerce in 1992 to manufacture superconducting magnetic coils.
American Precision Industries. "API Reports Solid Third Quarter Results with Record Level of Bookings." Available from http://www.apicorporate.compr/pr_3qy99.html . 10 December 1999.
"Appliance Coil Winding: Advances in Thermoplastic Encapsulation of Transformers and Small Wound Coils." Appliance, May 1993.
Electronic Industries Alliance. "Factory Sales of Electronics 9 Percent First Half of 1999, Reaching $244 Billion." Available from http://www.eia.org/PAD/PRESS/FILES/99-38.html . 10 December 1999.
——. "First Quarter 1999 U.S. Electronics Sales Reach Nearly $126 Billion, Up 7.4 Percent over 1998." Available from http://www.eia.org/PAD/PRESS/FILES/99-25.htm . 10 December 1999.
Horn, Delton T. Basic Electricity and Electronics. Westerville, OH: Glencoe Division, 1993.
Levine, Sy. Basic Concepts and Passive Components. Plainview, NY: Electro-Horizons Publications, 1986.
United States Census Bureau. Annual Survey of Manufacturers. Washington, DC: GPO, 1995.
United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .
U.S. Department of Commerce. International Trade Administration. U.S. Industrial Outlook 1994. Washington, DC: GPO, 1994.