Computer Hardware Sector, 2007

U.S. Market Overview

The computer hardware sector includes companies engaged in manufacturing computers (ranging from supercomputers to portable handheld devices), peripheral equipment (monitors, storage devices, terminals, printers, scanners, etc.), and local area network (LAN) switches, routers and modems. This industry sector has a high concentration of small- and medium-sized enterprises that account for the majority of the establishments in the U.S. hardware sector, but large manufacturers account for more than 70 percent of industry employment and over 80 percent of shipments.

The United States is the largest single market in the world for computer hardware products. In 2006, U.S. spending on computer hardware reached $136 billion – about one-third of the global total, according to International Data Corporation (IDC) estimates. Spending on computer systems accounted for 56 percent of this total, followed by networking equipment at 19 percent, peripheral equipment, 16 percent, and storage, 9 percent.

Several major U.S. computer firms have sold their plants in the United States to U.S. and foreign electronics manufacturing services firms, and have also contracted out significant production to firms overseas, particularly to Taiwanese original design manufacturers. U.S.-based computer equipment shipments dipped 2 percent in 2006, to $76.6 billion. However, domestic demand was strong for smart handheld devices and networking equipment. Overall shipments for peripheral equipment remained moderate, with printer sales increasing, stimulated in part, by growing consumer interest in digital cameras.