Developments in Microelectronics Technology and the Economics of the Semiconductor Industry

Microelectronics and in particular microprocessors and the microcomputers of which they are a part, are capable of performing complex data processing tasks. The costs of these electronic systems has fallen to a level where they can be considered by a designer to be a part of industrial, office and even domestic goods competing with older mechanical, electrical and electronic techniques. These electronic systems have also made economically feasible new products which were previously too expensive using the alternative methods of operation. The rapid rate of development and the consequent reductions in prices of microelectronics and the products that use it particularly in the sphere of automation, on the shop floor and in the office has given academics, researchers, politicians and trade unionists a cause for concern. The worries are that new tools for production incorporating microelectronics will displace labour and that furthermore many new products that incorporate microelectronics will require fewer people to assemble smaller numbers of standardised components. At the same time many industrialists see opportunities for new products helping to raise the standard of living and employing people in their production. There is therefore a balance between employment in the production of new products and the displacement of labour as products and labour intensive production processes are made obsolescent. The debate is whether the advent of microelectronics will significantly increase unemployment or not and if it does, what the effects on society will be. However, if the advantages of microelectronics are merely temporary then the changes that have been seen so far may be the full extent of the revolution that is being presaged. This paper explains how microelectronic components are made and examines the constraints on their development to show that even though current components have not achieved their full influence there is still likely to be considerable increases in the capabilities of microelectronics, microcomputers and the electronic systems that incorporate them.