SIC 3676
ELECTRONIC RESISTORS



This category covers establishments primarily engaged in manufacturing electronic resistors. Establishments primarily engaged in manufacturing resistors for telephone and telegraph apparatus are classified in SIC 3661: Telephone and Telegraph Apparatus.

NAICS Code(s)

334415 (Electronic Resistor Manufacturing)

Industry Snapshot

The value of shipments in the electronic resistors industry in 2001 was $712.9 million, down from $981.7 million in 2000 and $970.6 million in 1999. The number of establishments and the percentage with more than 20 employees was stable throughout the 1980s. During the 1990s, there was a steady consolidation of workers in larger firms. Average firm size as measured by the number of production workers per establishment was over three times as large as for the manufacturing sector as a whole. In 2001 there were 93 establishments in the industry, down from 118 in 1997.

Employment of production workers in the industry declined from 12,400 in 1982 to 6,900 in 1995. A robust U.S. economy, especially in technology sectors, accounted for an increase to 8,640 by 1997. However, the number of production workers declined through 2000, reaching 6,708 workers. The industry is relatively labor intensive, having 60 percent as much investment per production worker as that for the manufacturing sector as a whole in recent years. In 2000, production workers earned about $11.32 per hour, approximately 25 percent lower than the average manufacturing wage.

Organization and Structure

In recent years, the states with the most firms in the electronic resistors industry have been California, Florida, Pennsylvania, Texas, Massachusetts, and New Jersey. Together these states have accounted for roughly half of total employment and for about half of all industry establishments in the United States.

Some of the top 10 industries and sectors buying the outputs of the electronic components and accessories industries are: radio and TV communication equipment; exports; telephone and telegraph apparatus; electronic computing equipment; electronic components, not elsewhere classified; radio and TV receiving sets; guided missiles and space vehicles; personal consumption expenditures; X-ray apparatus and tubes; and aircraft.

There are three basic classes of resistors: fixed resistors, variable resistors, and resistor networks. Within the class of fixed resistors, the four types by product share in 2001 were cylindrical leadless resistors (348.0 million units), dual in-line package resistors (84.8 million units), wirewound resistors (73.2 million units), and carbon composition and carbon film resistors (39.3 million units). Other forms of resistors, including metal film, metal oxide, and thick cement film, accounted for a combined total of 348.0 million units.

Within the class of variable resistors, the share of wirewound devices increased from 2.2 million units in 2000 to 5.8 million units in 2001. By contrast, unit shipments of nonwirewound resistors remained relatively flat, falling slightly from 29.2 million units in 2000 to 28.6 million units in 2001. Within the class of resistor networks, the top two types by product share were single in-line package (SIP), at 54.2 million units, and dual in-line package (DIP), at 17.5 million units. Other types of resistor networks accounted for 58.3 million units.

One of the largest trade organizations serving the industry is the Electronic Industries Alliance of Arlington, Virginia. Known as the Radio Manufacturers Association when it was founded in 1924, the EIA had 2,500 members in the early 2000s. The group produced a number of publications and was involved in the development of industry standards. Another large trade organization serving the industry is the American Electronics Association of Santa Clara, California. AEA was founded in 1943 and had 3,000 member companies. In addition to organizing industry conferences and events, AEA published a variety of publications and special reports about the industry.

Background and Development

In his Basic Electricity and Electronics, Delton T. Horn defined resistors and resistance: "A resistor is a device which opposes current in a dc (direct current) circuit; a measure of this opposition is called resistance, measured in ohms…. Ohms's Law, the relationship between voltage, current, and resistance, states that current is directly proportional to voltage and inversely proportional to resistance in a circuit." Resistance is one of the three variables of Ohm's Law, and is thus a necessary precondition for any functioning circuit. Resistors are either fixed, with a designated ohm value, or variable, with a designated range of ohm values. Variable resistors are either potentiometers, which control voltage, or rheostats, which directly control resistance. Electronic transistors 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.

The first electronic resistor was patented in the United Kingdom by C.S. Bradley in 1885. This was a molded carbon composition resistor made of a carbon-rubber mixture. The earliest carbon film resistor was produced in the United Kingdom by T. E. Gambrell and A.F. Harris in 1897. As with the carbon composition resistor, this device preceded the development of broadcasting by a number of years. The first thin metal film resistor was developed in the United Kingdom by W. F. Swann in 1913. The first high-resistance metal film resistor was produced in Germany by F. Kruger in 1919.

The first cracked carbon resistor was produced by Germans Siemens and Halske in 1925. Siemens produced so many of these resistors that they became commonly referred to as "Siemens resistors." The first sprayed metal film resistor was developed in Germany by S. Loewe in 1926. This was produced by spraying an atomized solution of platinum impregnated with resin, after which the sprayed form was heated. In his Electronic Inventions and Discoveries, G. W. A. Dummer described developments in the industry around this time: "It might be considered that this period (the early 1920s) saw the birth of the components industry. Resistors were produced in large quantities and used as grid leaks, anode loads, etc., and consisted of carbon compositions of many kinds compressed into tubular containers and fitted with end caps…. Cracked-carbon film-type resistors were introduced from Germany … and by 1934 were being manufactured in quantity in the United Kingdom." The rapidly expanding use of radio and other forms of electronic communication provided an ever-growing market for resistors and other electronic components in the period between the World Wars.

During the early 1950s, electronic engineers realized that the working portion of a resistor was only a small fraction of the total volume. For plastic-molded carbon film resistors, for example, only 3.6 percent of the total volume was actually used. This realization led to the development of early thick film and thin film circuits. One of the most important of these was the nickel-chromium (or nichrome) thin film resistor, produced in the United Kingdom by R. H. Alderton and F. Ashworth in 1957. This became the most widely used type of thin film resistor. It was also in the 1950s that automation techniques were developed for attaching traditional electronic components with wire leads to circuit boards. These processes could produce up to 10,000 finished circuit boards per day. A key development in the production of thick film resistors was the use of lasers for trimming in the late 1960s.

The first integrated circuit was produced by Texas Instruments in 1959. This device made use of components mounted on a semiconductor chip to form an entire electronic circuit. Prior to the development of integrated circuits, electronic circuits were made exclusively of discreet and separable components—combinations of vacuum or transistors and passive components. In Electronic Inventions and Discoveries, Dummer wrote, "The present explosion of integrated circuits in the form of VLSI (very large-scale integration) and VHSIC (very high-speed integrated circuit) has been the most important development in the history of electronics."

The mass production and widespread commercial viability of integrated circuits was made possible by the planar process of production, developed in the United States in 1959 by Jean Hoerni, a Swiss physicist, and Robert Noyce, an American physicist. Chip resistors are surface-mounted to circuit boards, in contrast to traditional resistors with wire leads running through circuit boards. Surface mount resistor types became even more important in the 1990s.

Overall, the U.S. resistor industry was mature by the 1990s, and profit margins were slim. This was partially attributable to the effects of consolidation on suppliers of electronic components, especially as the decade opened. Later in the decade, as the U.S. economy operated with increasing robustness, such consolidation failed to inflate prices and pricing remained competitive between competing firms.

Current Conditions

According to U.S. Census Bureau figures, shipment values for electronic resistors dropped from $981.7 million in 2000 to $712.9 million in 2001. Total unit shipments also fell. For example, shipments of dual in-line package resistors fell from 180.2 million units in 2000 to 84.8 million units in 2001. Shipments of single in-line resistor networks fell from 108.3 million units in 2000 to 54.2 million units in 2001. According to the September 30, 2002 issue of EBN , iSuppli Corp. placed industry revenues for both capacitors and resistors at $15.3 billion in 2001. While capacitors were responsible for 90 percent of these revenues, resistors represented about 7 percent of the overall total, or $1.07 billion.

During the early 2000s, end-users of so-called "passive" electronic components like resistors—namely original equipment manufacturers—were applying continuous pressure on the industry to lower prices. This had a devastating impact on profitability, as many manufacturers were forced to produce components at or below the cost of production. In addition, the industry was forced to contend with a generally weak economic climate, heightened competition from the likes of Asia, and downturns in leading end markets like telecommunications equipment, computers, and the automotive sector.

Together, these negative conditions led to workforce reductions, consolidation, plant closures, and a reduction in overall capital spending and production capacity. With manufacturers of passive components operating at anywhere from 60 to 70 percent of capacity by July of 2002, EBN reported that vendors were "swimming in excess supply and fighting for contracts." On average, resistor prices fell approximately 22 percent in roughly six months, from 4.5 cents to 3.5 cents by mid-2002, according to the publication.

In the February 10, 2003 issue of EBN , an analyst from iSuppli Corp. predicted that unit shipments of both capacitors and resistors would improve by about 22 percent in 2003, resulting in industry revenue growth of 7 percent. However, as worldwide capacity continued to decline in early 2003, there were concerns about manufacturers' ability to respond to a sudden uptick in demand.

Though technical change remained dynamic in the electronic resistors industry, growth prospects did not appear promising until 1994. Employment of production workers declined from 11,700 in 1989 to 9,700 in 1995. The peak year for employment of production workers was 1984, with 13,000. From 8,461 workers in 1997, employment fell each year through 2000, reaching 6,708.

Industry Leaders

Leading firms in the electronic resistors industry include Bourns, Inc. of Riverside, California; Vishay Dale Electronics, Inc., a part of Malvern, Pennsylvania-based Vishay Intertechnology, Inc.; and CTS Resistor Network of Berne, Indiana. Bourns, Inc. is a privately held firm founded in 1947. The company's products are distributed throughout the world. Bourns underwent a streamlining operation in 1991, which resulted in the elimination of a number of managerial positions. The firm entered into a cooperative agreement with the fourth producer, IRC Inc., in early 1992. By mid-1992, between 50,000 and 100,000 thin-film precision resistor networks were being produced each month under the agreement. Bourns announced in 1992 that it was diversifying into the production of miniature electronic switches (SIC 3679: Electronic Components, Not Elsewhere Classified). By 2003 the company served the telecommunications, computer, medical, and automotive markets, among others.

Vishay Dale Electronics, Inc. was founded in 1951. In addition to electronic resistors, the firm also produced electronic capacitors (SIC 3675: Electronic Capacitors) and nonelectronic power transformers (SIC 3612: Power, Distribution, and Specialty Transformers). Dale Electronics is a subsidiary of Dale Holdings, Inc., itself a subsidiary of Vishay Intertechnology, Inc. of Malvern, Pennsylvania. Vishay Intertechnology is a manufacturer of resistor-based stress measurement sensors (SIC 3829: Measuring and Controlling Devices, Not Elsewhere Classified), inductors (SIC 3677: Electronic Coils, Transformers, and Other Inductors), and specialized connectors (SIC 3678: Electronic Connectors). Dale Electronics represented part of Vishay's strategy of acquiring electronic components producers around the world and selling components under their original brand names.

CTS Corporation commanded a significant portion of the market by 2002 with 5,313 employees and $457.8 million in 2002 sales, down from $577.7 million in 2001 and $866.5 million in 2000. The firm produces a wide variety of electronic components in addition to resistors. Once known as CTS Resistor Network, the CTS Corporation moved dramatically from the fifth position in 1996 with 500 employees and $30 million in sales. No doubt their meteoric rise in the resistor industry can be attributed to competitive success in major resistor markets with leaders within those markets. Additionally, CTS' success as a major player in the resistor manufacture market also resulted from international expansion into European telecommunications markets and domestic acquisition of aerospace and defense contracts with the U.S. government.

America and the World

Exports of electronic resistors produced in the United States more than doubled between 1992 and 1998, from $242.5 million to $522.2 million. Chip resistors experienced rapid export growth throughout the 1990s. The three largest export markets for resistors produced in the United States were Mexico, Canada, and Japan. Mexico and Canada by themselves accounted for 45 percent of all U.S. resistor exports in 1992. Reflecting an increasing dependence on overseas manufacturers that required resistors, the most rapidly growing export markets for U.S. resistors were in East Asia and Latin America, with growth rates between 1996 and 1998 of 26 and 50 percent, respectively.

Imports of electronic resistors into the United States peaked in the mid-1990s from $411 million in 1992 to $666 million in 1995. Yet by 1998, imports remained relatively flat at $623.2 million. Imports from Mexico accounted for 33 percent of this total, and from Japan, 17 percent.

By the early 2000s, both imports and exports of electronic resistors were down. After climbing almost 20 percent in 1999 and more than 25 percent in 2000, exports dropped almost 24 percent in 2001, declining from about $782 million to $598 million. Imports, which increased more than 7 percent in 1999 and more than 50 percent in 2000, fell more than 29 percent in 2001, declining from $980 million to $693 million.

Research and Technology

By the end of the century, demand for smaller resistors continued to accelerate despite technical problems associated with miniaturization of electronic devices. Consumer demand for smaller, easily portable electronics products such as compact cellular phones, lightweight laptop computers, and personal digital assistants drove market research toward miniaturization of electronics components such as resistors. Such miniaturization heralded increasing integration of resistors, capacitors, inductors, and logic circuitry into chip products via thin-film-on-silicon technology. Industry executives expected that devices based on that technology would account for a 20 percent compound annual growth rate through 2005. By comparison, (discrete) resistor sales were projected to increase by 13 percent during the same time period.

Further Reading

Chin, Spencer. "Passives Budgets Seen as Light." EBN, 10 February 2003.

——. "Passives Vendors Diversify to Avert Commodity Status." EBN, 30 September 2002.

Company Intelligence Database. Farmington Hills, MI: Gale Group, 2000.

Electronic Market Data Book. Arlington, VA: Electronic Industries Alliance, 1998.

Fjelstad, Joseph. "Embedded Resistors." CircuiTree, May 2002.

Horn, Delton and Abraham Pallas. Basic Electricity and Electronics. New York: Macmillan/McGraw-Hill, 1993.

Ojo, Bolaji. "Passives Suppliers Balking at Further Price Slices." EBN, 22 July 2002.

"Resistors." EBN, 19 October 2001.

Roos, Gina. "Passive but Not Inert." EBN, 13 August 2002.

U.S. Census Bureau. Annual Survey of Manufactures. Washington, D.C.: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, February 2002. Available from http://www.census.gov .

——. "Semiconductors, Printed Circuit Boards, Other Electronic Components: 2001.". Current Industrial Reports. Washington, D.C.: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau. August 2002. Available from http://www.census.gov .

U.S. Department of Commerce: Bureau of the Census; International Trade Administration (ITA). "Trade and Economy: Data and Analysis." 1 March 2003. Available from http://www.ita.doc.gov .

U.S. Department of Commerce. "Electronic Resistor Manufacturing." 1997 Economic Census, Manufacturing, Industry Series. Washington: GPO, 1999.

——. "U.S. Exports of Electronic Resistors (SIC 3676), 1992-1998." Microelectronics Web Site, 2000. Available from http://www.ita.doc.gov .

——. "U.S. Imports of Electronic Resistors (SIC 3676), 1992-1998." Microelectronics Web Site, 2000. Available from http://www.ita.doc.gov .



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