Electronic Resistors

SIC 3676

Companies in this industry

Industry report:

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

Industry Snapshot

In 2008 shipment values in the electronic resistors industry were slightly more than $574 million, down from $614 million in 2007 and $601 million in 2006. By 2007 there were 67 companies doing business in the industry. Numerous factors either helped or hindered the industry at the end of the first decade of the 2000s, including oversupply issues and the rising costs of materials, which had a negative impact on the industry. These were offset by the growing popularity of multichip resistor arrays and the increasing demand for resistors primarily driven by robust sales in the cell phone market.

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 2002, reaching 3,870 workers before increasing to more than 4,800 in 2003. In 2007 the total workforce was reported to comprise 4,703 employees following a decrease in the number of production workers to 3,493 as of 2006. The changing workforce reflected shifts within in the marketplace, industry consolidation, advanced automation, and jobs being moved overseas.

Manufacturers of electronic resistors struggled 2009 as the recession deepened. However, by late 2009 the industry had begun to turn around, and by 2010 demand for electronic resistors was revitalized, enabling manufacturers to report double-digit growth. The industry had a value of $3,496.2 million in 2010 with industry-wide employment of 4,036 workers.

Organization and Structure

During the first decade of the 2000s, the states with the most firms in the electronic resistors industry were California, Florida, Pennsylvania, Texas, Massachusetts, and New Jersey. These states account for roughly half of total employment and about half of all industry establishments in the United States.

The top 10 industries and sectors buying electronic components and accessories included 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. In the middle of the first decade of the 2000s, healthy growth in the cell phone industry drove the industry.

There are three basic classes of resistors: fixed resistors, variable and semi-fixed resistors, and resistor networks or arrays. Fixed resistors are used for general purposes and are the least expensive because the resistance variable cannot be changed. Variable resistors can change resistance values easily, such as the volume control on a radio. Semi-fixed resistors are not made for constant adjustment and can be changed, but only by a technician. Networks place multiple chips on a single board, either as a thick-film single-inline or dual-in-line. By the middle of the first decade of the 2000s multi-chip resistor arrays were becoming widely used as an efficient alternative to thick-film networks.

Resistors also are distinguished according to the material used to make them. The two most common types of resistors are carbon film and metal film. Other materials of higher quality include ceramics and tantulum. Metal film resistors have a higher tolerance and more accurate value than carbon film resistors.

One of the largest trade organizations serving the industry is the Electronic Industries Alliance, with headquarters in Arlington, Virginia. Founded in 1924 as the Radio Manufacturers Association, the EIA had 1,300 members in the middle of the first decade of the 2000s. The EIA produces 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. The AEA was founded in 1943 and had approximately 2,500 member companies. In addition to organizing industry conferences and events, the AEA publishes a variety of publications and special reports about the industry.

Background and Development

In 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, making it a necessary condition 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, because 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. It 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. This device preceded the development of broadcasting by a number of years as did the carbon composition resistor. 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 Electronic Inventions and Discoveries, G. W. A. Dummer described developments in the industry around this time, saying: "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 a continually growing market for resistors and other electronic components between World Wars I and II.

During the early 1950s, electronic engineers realized that the working portion of a resistor was only a fraction of the volume. For example, only 3.6 percent of the volume of a plastic-molded carbon film resistor 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 (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. Automation techniques for attaching traditional electronic components with wire leads to circuit boards were also developed in the 1950s. 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.

In 1959 Texas Instruments produced the first integrated circuit, which 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 that were 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, a U.S. 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 increasingly 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 at the beginning of the decade. Later in the decade, as the U.S. economy became healthier, such consolidation failed to inflate prices, and pricing remained competitive among industry firms.

Within the class of fixed resistors, the four types by product share in 2001 were cylindrical leadless resistors (348 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, together accounted for 348 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. In contrast, unit shipments of non-wirewound 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.

According to the U.S. Census Bureau, shipment values for electronic resistors dropped from $981.7 million in 2000 to $712.9 million in 2001. Unit shipments also declined, including shipments of dual in-line package resistors that dropped 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 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 market, or $1.1 billion.

During the early years of the first decade of the 2000s, end users of "passive" electronic components like resistors, especially original equipment manufacturers, applied continuous pressure on the industry to lower prices. This had a devastating impact on profitability, as many manufacturers were forced to sell 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 areas like Asia, and downturns in leading end markets like telecommunications equipment, computers, and the automotive sector.

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

During the early years of the first decade of the 2000s, the resistor industry suffered with the rest of the U.S. economy. After reaching shipment values of $981.7 million in 2000, industry revenues declined for the next three years, reaching only $647.6 million in 2003. However, by 2004 the industry was returning to profitability with significant increases in resistor shipments during the first half of the year.

Growth in the middle of the first decade of the 2000s was driven by consumer electronics, as well as by wireless technology, especially cell phones. The trend continued for miniaturization of the components and an attempt to eliminate as many components as possible to increase board space. To that end, while the mature industry sector of traditional thick-film single-inline and dual-inline resistor networks was gradually declining, the use of resistor arrays was increasing. Arrays allow more functions to be placed in a smaller component, taking the place of four or eight individual resistor chips or the larger thick-filmed network. Thin-film resistor networks are expected to continue to hold a market share due to their higher performance and the reliability necessary for high-end products. Thick-filmed resistor networks also continue to be used in applications by the military and in the telecommunications and avionics industries.

Prices for thick-filmed resistor networks were expected to fall between 5 and 8 percent because of significant supply and decreasing demand, with some price hikes for thin-filmed resistor networks experiencing due to increased costs of ceramics and precious metals. Discrete resistor prices were expected to decline approximately 10 percent. According to Gina Roos in Purchasing, the resistor industry was expected to grow during the middle of the first decade of the 2000s at a rate of 10 to 15 percent.

At the end of the first decade of the 2000s, the industry suffered along with most manufacturing segments as a result of the global economic recession. In 2007 employment dropped to a total of 4,703 employees who earned less than $187 million in wages. Shipments that year totaled just over $614 million, down from the nearly $1 billion at the beginning of the decade. As of 2008, shipments had dropped further, reaching approximately $574 million.

Current Conditions

Dun & Bradstreet listed 95 establishments primarily engaged in manufacturing electronic resistors in 2010 with shipment values totaling $3,496.2 million and industry-wide employment of 4,036 workers. On average, each establishment employed 46 workers who generated an estimated $50.7 million. The majority of operations were located in California, Florida, Pennsylvania, New York, and North Carolina. Based on shipment values, Pennsylvania accounted for the bulk of industry sales with shipments totaling $2,970.3 million in 2010. New York followed with $184 million, Nebraska had $128 million, California shipped $60.9 million, and North Carolina reported $34.9 million in shipments.

Manufacturers of electronic resistors comprised 84.2 percent of market share with a workforce of 3,630 workers and shipments totaling $3,466.9 million in 2010. Resistor networks manufacturers were responsible for 9.5 percent of industry share with revenues of $9.1 million. The thermistors, except temperature sensors, sector held 5.3 percent of market share, shipping $20.2 million in goods.

Industry leader Bourns Inc. reported a significant turnaround by 2010 when demand for resistors increased some 40 to 50 percent, which was a welcome change from the decrease in orders during 2009. Besides sluggish orders, another challenge in 2009 was the shortage of ceramics, a chief component for manufacturing electronic resistors that led into longer "lead times." While resistor manufacturers were not anticipating double-digit growth for 2011, the electronic resistor market was expected to at least remain stable, unless raw material prices jumped. Various industry sectors were projected to continue to drive innovation for devices within the electronic resistors market like smart phones, tablet computers, and various other portable devices. Other markets driving demand for resistors were "solid-state lighting" and "smart meter" manufacturers. In addition, appliance manufacturers were another niche market with especially robust demand.

Industry Leaders

Leading firms in the electronic resistors industry included Bourns Inc. of Riverside, California; Vishay Dale Electronics Inc., a part of Malvern, Pennsylvania-based Vishay Intertechnology Inc.; and CTS Corp. of Elkhart, Indiana.

Bourns Inc. is a privately held firm that was founded in 1947. The company's products are distributed worldwide. When Bourns streamlined operations in 1991, a number of managerial positions were eliminated. 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 produced each month under the agreement. In 1992 Bourns announced plans to diversify by producing miniature electronic switches (see SIC 3679: Electronic Components, Not Elsewhere Classified). By the middle of the first decade of the 2000s, the company served the telecommunications, computer, medical, and automotive markets, as well as others. In 2008 estimated sales were $343 million, and the company reported 4,000 employees. For 2010, Bourns revenues increased to $389 million, and the workforce increased to 4,200 employees.
Vishay Dale Electronics Inc. was founded in 1951. In addition to electronic resistors, the firm also produces electronic capacitors (see SIC 3675: Electronic Capacitors) and nonelectronic power transformers (see SIC 3612: Power, Distribution, and Specialty Transformers). Dale Electronics is a subsidiary of Dale Holdings Inc., which itself is a subsidiary of Vishay Intertechnology Inc. Vishay Intertechnology is a manufacturer of resistor-based stress measurement sensors (see SIC 3829: Measuring and Controlling Devices, Not Elsewhere Classified), inductors (see SIC 3677: Electronic Coils, Transformers, and Other Inductors), and specialized connectors (see SIC 3678: Electronic Connectors). Dale Electronics was part of Vishay's strategy to acquire electronic components producers around the world and sell components under their original brand names. In 2008 parent company Vishay Intertechnology had 24,800 employees and sales of more than $2.8 billion. In October 2009, Vishay announced it was going to spin off its foil technology products division, including foil resistors, into an independent, publicly traded company. That spin-off was completed on July 6, 2010, and the new company was named Vishay Precision Group, Inc. (VPG). Vishay Intertechnology reported revenues totaling $2.7 billion in 2010, up 33.4 percent from $2 billion in 2009. In addition, the company increased its workforce 11 percent, or 2,300 workers. Vishay Precision Group, Inc. posted sales of $177.9 million in 2010 with 1,900 employees.
CTS Corporation commanded a significant portion of the market by 2008, with 5,044 employees and nearly $692 million in sales, which was down from $866.5 million in 2000 but up from the prior few years. 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 fifth in the industry in 1996 with 500 employees and $30 million in sales. Its meteoric rise can be attributed to competitive success in major resistor markets with leaders within those markets. CTS' success as a major player in the resistor manufacturing market also resulted from international expansion into European telecommunications markets and domestic acquisition of aerospace and defense contracts with the U.S. government. CTS Corporation's revenues fell to $552.6 million in 2010 as a result of the economic recession. The company reported 4,369 employees, a decline from 5,044 in 2008.

America and the World

Exports of electronic resistors produced in the United States more than doubled between 1992 and 1998, from $243 million to $522 million. Chip resistors reported rapid export growth throughout the 1990s. The three largest export markets for resistors produced in the United States were Mexico, Canada, and Japan. 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. Nonetheless, by 1998, imports remained relatively flat at $623.2 million. Imports from Mexico accounted for 33 percent of the total, and imports from Japan were at 17 percent.

By the early years of the first decade of the 2000s, imports and exports of electronic resistors had decreased. 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. Exports fell another 23 percent in 2002 to $461 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. In 2002 imports were down slightly to $656 million. In 2006 imports were $983 million, up a significant 40 percent over 2005. However, U.S. exports were $692 million, up 17 percent from the previous year. In 2008 the U.S. trade deficit continued with imports decreasing to $800 million while exports totaled approximately $700 million.

Research and Technology

By the end of the twentieth century, demand for smaller resistors continued to accelerate despite technical problems associated with the miniaturization of electronic devices. Consumer demand for small, easily portable electronics products like compact cellular phones, lightweight laptop computers, and personal digital assistants drove market research to miniaturization of electronics components, such as resistors. Miniaturization indicated increasing integration of resistors, capacitors, inductors, and logic circuitry into chip products via thin-film-on-silicon technology.

New market competition from integrated passive devices (IPDs) was projected for the end of the first decade of the 2000s for transistor networks and arrays. IPDs contain up to 70 components, about 40 to 50 percent of which are resistors, allowing OEMs to reduce costs by facilitating easy component installation. As of the middle of the first decade of the 2000s, IPDs could not compete in terms of price with networks and arrays, but as the industry continued to develop smaller, faster, and less expensive devices, IPD use was expected to increase, which would eventually push prices lower.

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