119 Monthly Lab. Rev. 6 (1996)
Semiconductors: The Building Block of the Information Revolution

handle is hein.journals/month119 and id is 668 raw text is: Coptr an Se0m0 c0 0

Semiconductors: the building blocks
of the information revolution
Driven by advances in technology
and an ever-growing demand, job growth
and earnings in the semiconductor industry
are above those of manufacturing as a whole

he U. S. semiconductor industry is re-
nowned for its record of technological
breakthroughs. These advances have in-
creased the speed and capabilities of computer
chips and led to employment growth in the in-
dustry that runs against the grain of recent U. S.
manufacturing history. On the demand side, this
feat has been sustained by an apparently insa-
tiable worldwide demand for what is the enabling
technology of computers, telecommunications
equipment, and consumer electronic products. In-
deed, semiconductor companies produce the very
building blocks of the information revolution.
Semiconductor producers are also engaged in
a costly, worldwide race of technology develop-
ment evident in the continuous flow of advanced
products, high research and development (R&D)
expenditures, and expensive fabrication facilities.
This has required a growing, highly trained work
force, with hourly earnings substantially above
the average in manufacturing. In 1995, the in-
dustry employed 236,000 workers, 10 percent
more than in 1993.
Interaction between technology and employ-
ment in semiconductor manufacturing affect
worker productivity, offshore employment, tech-
nology diffusion, and R&D employment. Follow-
ing a background section, the discussion covers
three major topics: the organization of the indus-
try (including a geographic profile of production
and employment), employment and trade, and
manufacturing technology and labor (including
the economics of chip assembly and the cost
structure of the industry). The final section con-

trasts a recent slowdown in the semiconductor
market with the positive long-term outlook based
on industry expansion plans.
What are semiconductors?
Semiconductor devices are the basic functional
components of computers and other electronic
products. They are based on materials, such as
silicon, that conduct electricity with less facility
than perfect conductors; small changes in their
physical structure often induce significant
changes in their electrical properties. This makes
these materials extremely versatile because their
electrical properties can then be customized to
create new applications or improve performance.
The industry's products include discrete semi-
conductors and integrated circuits. Discrete semi-
conductors are semiconductors with a single com-
ponent like a transistor. These products are used
as components in electronic circuits.' Integrated
circuits (IC), or computer chips, are pieces of sili-
con wafers that incorporate complex electronic
circuits. They can contain millions of transistors
and other components. In terms of shipments, the
major products are ic's, including microproces-
sors and memory chips. These products are avail-
able at several levels of integration: from chip
sets to computer motherboards and modules.
Microprocessors function as the central pro-
cessing unit of a computer. They vary in speed
and the ability to do a variety of logical and math-
ematical functions. These features are determined
primarily by the number of transistors per chip.

6  Monthly Labor Review  August 1996

Francisco A. Mods
Francisco A. Moris Is an
economist in the
Division of Monthly
Industry Employment
Statistics, Bureau of
Labor Statistics.

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