October 18, 1965 Electronics
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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.
Western 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 the past.
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 design.
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 process control.
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 exchanges.
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