October 18, 1965 Electronics
[Table of Contents]
Wax nostalgic about and learn from the history of early electronics.
See articles from Electronics,
published 1930 - 1988. All copyrights hereby acknowledged.
This is the electronics market prediction for
West Germany, circa 1966. It was part of a comprehensive assessment by
the editors of Electronics magazine of the state of commercial, military,
and consumer electronics at the end of 1965. West Germany was intent on being a
player in the Space Race with Siemens and Telefunken providing expertise. Bochumer Verein
was pushing the electronic computer frontiers forward. The article states that
only about 5% of West Germany's factories including heavy industry have anything
approaching the automation of American industry. Factory automation was viewed as
a threat to the German workers. Unless you can find a news story on the state of
the industry, detailed reports must be purchased from research companies like
Statista. Their website has a lot of charts on Germany's
current electronics market showing revenue in the consumer electronics segment
amounts of US$2,948M in 2018.
Separate reports are included for
(the Berlin Wall was still up then), the
obviously not part of Europe, is also covered.
Germany Electronics Market
Industry rides on economic crest
The West German economy heads into 1966 at its strongest level since before
World War II. And riding the crest of this economic wave will be the thriving
electronics industry, the biggest in Europe; domestic consumption reached $2
billion in 1965 and is expected to total $2.2 billion next year.
Last year, West Germany satisfied its own domestic demand for electronic
gear and ranked second only to the United States as an exporter of industrial
electronic products. West German electronic equipment has found a worldwide
market, from electronic telephone-switching equipment in Rome to automatically
controlled tankers on the high seas.
Because of restrictions imposed on West Germany by the Allied occupation
forces following World War II, the country's modern electronics industry is
really only 10 years old. So West Germany has a long way to go to catch up with
the United States in many advanced applications and advanced research and development.
Many West German research workers eye the massive infusion of U.S. government
funds into research and development with envy.
At the sprawling central laboratories in Munich of the giant
Siemens & Halske AG, the largest electronics company in Germany, a research official
says: "We cannot afford the wide-ranging projects that are possible in the U.S.
In fact, less than 1% of our research and development budget comes from the
government." But the West German electronics industry is hopeful that some year
soon it will rank as a leading innovator in the field.
Government and defense
On its own and in cooperation with other European countries, West Germany
is hard at work on such diverse projects as satellite-launching rockets, research
and communications satellites, satellite ground-control stations, vertical/short-range
take-off and landing (V/STOL) tactical fighters and transports, and helicopters.
In 1966 and the coming years, these will represent a growing market, but a market
in which the German electronics companies are going to fight harder than in
Earlier this year, the West German Ministry for Scientific Research estimated
the country's need for space projects funds at nearly $500 million for the next
five years. And in the past year or so, a number of German companies have moved
to strengthen their position in advanced applications by seeking ties with other
companies, both domestic and foreign.
West German electronics markets
For example, Telefunken AG joined a consortium led by the Hughes Aircraft
Co. to snag a North Atlantic Treaty Organization air-defense ground-environment
(Nadge) contract. Siemens joined an opposing consortium led by the Westinghouse
Electric Corp. AEG, Telefunken's parent, is working closely with the General
Electric Co. in atomic power. Siemens produces some of the Radio Corp. of America's
line of computers and sells them in West Germany.
Still, the U.S. is the major source for much of the electronic gear vital
to West Germany's defense and is likely to remain so as long as the West German
Army is considered only a part of NATO.
Last year, 30% of the radio equipment orders in West Germany were filled
by the U. S. To change this, German companies are setting up more lucrative
links with U.S. firms, tapping American know-how through licenses, exchanges
or outright acquisitions. An example of the latter is Telefunken's take-over
of the majority interest in GE's subsidiary, Electronische und Luftfahrtgerate,
GmbH, which services airborne electronic equipment.
Bucking this trend, though, are the subsidiaries of the U.S. companies actually
manufacturing in Germany. For instance, 80% of the computers manufactured in
Germany are made in American-owned plants, as are about 20% of all military
and industrial electronics equipment and about 15% of consumer electronics.
The West German electronics industry is expected to show strength across-the-board
except in some areas of consumer electronics. Sales of radio receivers will
be stimulated when the West German broadcasting companies and the post office
- which as in other European countries is responsible for radio and television
transmission - begin stereo broadcasting around the end of 1966.
Although it will not be ready before 1967 at the earliest, color television
is already far along in manufacturers' planning. The coming year will be a time
for readying production lines to avoid the pinch the U.S. industry is now feeling
because demand is far outstripping production.
But the West German electronics industry is in no real hurry to push color
television into the marketplace. Sales of black-and-white sets are strong and
more than 50% of the West German households now have at least one television
set. By the end of 1966, this should reach nearer 70% and only then will the
manufacturers feel the threat of saturation and the need for a new product.
The domestic makers know they must be ready with color-television sets because
a hefty 30% of the West German tv-set market now is filled by imports from other
European nations. Without a competitive color set, this percentage might rise.
Sales are expected to rise in tape recorders and record-playing equipment
and there are also great hopes for automobile tape recorders using easily changeable
cartridges, a product introduced only this year.
Electronics in the factory is gaining fast in West Germany as the demand
from the country's prosperity outraces production capacity. A factor, too, is
the chronic labor shortage that is being met - not always successfully - by
the Gastarbeiter, as the foreign worker is called. Over 1.2 million strong,
this labor force - recruited from Greece, Yugoslavia, Italy and England-is an
important factor of many electronic plants.
So far, only about 5% of West Germany's factories including heavy industry
have anything approaching the automation of American industry. The percentage
is expected to double in the next five years, opening a large market for electronic-control,
measuring and testing equipment.
Last year, nearly half of the control, measuring and testing instrument imports
came from the U.S. Although the competition from the rest of Europe, especially
in process-control computers is growing, the American position is expected to
stay at a high level in 1966.
In just about every segment of West German commercial and industrial activity,
sophisticated controls systems are being planned and electronic devices form
their backbones. Numerical control is hurting the traditionally stolid West
German machine tool industry. Not only has numerical control fathered a new
generation of machine tools, but it is also pushing electronics into new areas
- one of particular note in West Germany is the increasing automation of automobile
Next year will see several computer-controlled steel-rolling mills operating.
One will be at the Fried. Krupp-owned
Bochumer Verein in the Ruhr that was designed
from the ground up for computer control. These mills have already triggered
competition for new control systems both in the steel industry and elsewhere
and 1966 should see an expansion of interest-and of orders - for electronic
The fast-growing, and ultimately the most lucrative industrial market, is
for process-control equipment, with the digital computer far and away the most
attractive product. International Business Machines Corp. now supplies some
70% of the West German computer market, but Siemens - with a 6% share of the
market-hopes to cut down IBM's near-monopoly in 1966. The West German company
recently announced it planned expenditures of $125 million "within the next
few years" to build up its electronic-data processing business.
Siemens intends to spend $10 million of that amount almost immediately by
building a new computer development center in Munich. Another $5 million will
be spent to expand already existing computer-production plants in that city.
Siemens signed an agreement about a year ago with RCA to share licenses and
sales facilities for RCA's Spectra 70 computer, which Siemens will distribute
in Germany as the 4004 system. About 70% of the 4004's components are U.S.-made,
but Siemens hopes to reduce this to about 30%.
Transportation is feeling the impact of electronics, too. Next year, this
market will grow as both the railroads and the various government road agencies
step up their programs for traffic-flow control. The Deutsche Bundesbahn, which
runs the railroad network, has installed electronic controls in major train
terminal switchyards and on some sections of the mainline right-of-way. The
company is also looking at block control systems. Under the direction of a computer,
these systems feed information back into the cab of a locomotive rather than
just to the signals at trackside. Similar systems are being tested for subways
in several West German cities.
And the West Germans, long-standing innovators in highway development, have
installed computer-directed traffic control systems in the heart of West Berlin
and Munich. West Berlin regulates traffic on the major road leading out of the
city to the Hanover Autobahn. The control system, made by Siemens, employs a
signal processor for routine work and a
Siemens-Halske 303 process computer
for tasks that require complex decisions. The machines cost a total of $250,000.
Siemens also has installed a control system, which uses radar detectors,
in Neu-Ulm, in southern Germany. In a previous setup in Hamburg, the company
used pneumatically operated strips to measure traffic flow and select a control
program electronically. Munich installed a specialized computer made by a British
firm, Elliott-Automation, Ltd. Costing $350,000, the machine will select programs
from a repertoire of 40 that control the timing of traffic lights.
The telephone network in West Germany, as in the United States, is going
through an evolutionary upheaval with direct distance dialing to many neighboring
countries an accomplished fact and electronic switching systems appearing-both
for central offices, such as one installed in Munich, and for private branch
Some 30 to 40% of the market for West German telephone equipment is abroad,
according to Siemens. So American companies can expect continuing competition
in foreign markets from West German equipment, which is as advanced as American
wares in many areas and in some - such as desk-top call director units - even
more advanced. For example, one Siemens desk-top director has both a memory
for each of its labeled buttons - addressed by punching the punch-button dial
on the set-and also a temporary memory to store the last number called in case
it is busy and there is a need to call again.
In components, West Germany still lags behind the United States applying
advanced products. As with many other electronic products, West Germany may
be just a bit too late with its integrated circuits. Says a Siemens executive
charged with semiconductor production: "So far, there is no real demand here
for integrated circuit production. And what interest there is can be more easily
- and more cheaply - met through licensing." Siemens is making integrated circuits
for in-house use in the computers it makes under the agreement with RCA.
Besides being a market nearly ripe for integrated circuits from the U.S.,
West Germany can absorb healthy amounts of other components, such as advanced
types of transistors, even specialty tubes. West Germany now purchases nearly
30% of her component imports from the U. S. and is expected to continue as a
strong market for U. S. components next year.
Posted October 4, 2018