Tuning In To America Weak Dollar, Strong Domestic Market Boost U.S. Production Of TVs, Other Electronic Goods

As the electronics industry gathers for the annual showing of its latest gadgets and gizmos, more and more have the label “Made in the USA.”

Easily the biggest consumer of electronics, the United States is widely thought to satisfy its appetite by purchasing goods from Japan, Taiwan and other Asian countries.

But that is changing due to the rise of personal computers, growing spending by U.S. consumers on electronics, high productivity of American workers and an investment climate made attractive by the low value of the dollar.

Though Japan remains the world’s center for electronics production, a recent survey by the U.S.-based Electronic Industries Association yielded some surprises about how much occurs in the United States.

Based on factory dollars - the value of goods that leave manufacturing plants - 54 percent of the color TVs sold in the United States last year were made here. Sony Corp., for instance, makes virtually all of its U.S.-purchased TVs in San Diego and Pittsburgh, where production occurs in a former Volkswagen factory.

Even more of the home satellite, cellular phone and home security products sold here are made here. And of personal computers, among the most expensive electronic goods purchased by consumers, just over 70 percent sold in the United States are made here.

However, the EIA, which sponsors the Consumer Electronics Show that opens today, did not study where components of electronic items are produced, a more important measure of economic stature.

For instance, though most PCs are made here, about 45 percent of the computer’s cost is for displays and memory chips from companies overseas. The rest is in microprocessor chips, storage systems and software programs designed and made by U.S. companies.

Nonetheless, the perception of change is strong at the trade show, which will attract 80,000 visitors this weekend. It looms largest in the role U.S. companies played in the Japanese innovation that is most prominent here - a higher-capacity compact disc called the DVD.

Sony and Toshiba created different technical designs for the new CD and each gathered its own supporters. An unusual public debate lasted for more than eight months until U.S. computer companies insisted on a compromise, which was based on technical work by IBM.

Enough anecdotal evidence about the growing U.S. role in electronics manufacturing has accumulated for economists to notice.

“I think back to the mid- to late-‘80s and the notion was consumer electronics was something we couldn’t do. And now, quite a different story,” said Jeanette Garretty, vice president at Bank of America in San Francisco.

The dollar’s low value, particularly against the Japanese yen, has enticed many manufacturers to the United States since it makes production cheaper. In addition, producers want to be close to American consumers, who will spend $65 billion on electronics this year.

“If you are a big player, you want access to this market in particular,” Garretty said. “That has argued for doing an increasing amount of manufacturing in the United States.”

Americans are spending more on electronics at the expense of furniture and other big-ticket appliances, said Stephen Roach, senior economist at Morgan Stanley & Co. in New York. Consumers by last fall were devoting just under 10 percent of their discretionary income on electronics, up from 6 percent in 1991.

Roach said a key reason is the personal computer, which U.S. companies were creating in the late 1970s and early 1980s just as the country was losing its TV manufacturing industry to overseas producers.

“What constitutes consumer electronics has changed,” said Andrew Grove, chief executive of Intel Corp., the nation’s largest computer chip maker. “It has become computing and image processing. That is the large change. And where these things are made … it is palpably more U.S.-based.”