The roots of the electronics industry go back to the late 1800s, when scientists experimented with gaseous-discharge tubes and discovered that electricity could pass through gas from one metal electrode to another. Subsequent experiments led to the discovery of the vacuum tube, a tube with all the gases removed, through which electric current could flow. In 1904, a British scientist, John Ambrose Fleming, built the first commercial vacuum tube. It was used to detect radio signals.

Three years later, Lee De Forest, an American inventor, produced a triode, or three-electrode tube, which was the first electronic amplifier. The early years of the electronics industry were known as the vacuum tube era. During this period, which lasted from the 1920s to the 1950s, the primary electronic device was the vacuum tube. At first it was used primarily in radio receivers and broadcasting equipment. As more was learned about vacuum tubes, however, they came to be used in television sets, radar, electronic computers, and sound motion pictures.

In the 1950s, the electronics industry expanded with the first commercial use of the transistor and the development of semiconductor diodes. Transistors, and other solid-state materials, allow electrons to flow through a solid material rather than through a vacuum tube. Transistors were first used as amplifiers in hearing aids and pocket-sized radios. By the 1960s, transistors and semiconductor diodes were being used instead of vacuum tubes in many electronic products. These years are often referred to as the solid-state era of electronics.

The electronics industry expanded even further with the development of integrated circuits in the late 1950s. Integrated circuits are very small semiconductor chips that can do the work of thousands of individual electron devices such as transistors. Integrated circuits revolutionized the electronics industry and made possible many new products. At first, integrated circuits were used in military equipment and spacecraft. Later, they were used in radios, televisions, computers, and many other types of electronic products.

Around 1970, researchers working in the laboratory of an electronic component manufacturer developed the first microprocessor. Microprocessors, which have been called one of the most important discoveries of the last half of the 20th century, are tiny silicon chips on which all of the arithmetic and logic functions of a computer are placed. In essence, they are tiny chips that serve as miniature computers. At first, microprocessors were used to create pocket-sized calculators, video games, and home appliances. They then led to the creation of small computers. Until that time, computers were gigantic in size and very expensive. Only the federal government and giant industries could afford them.

Microprocessors, however, allowed the development of smaller computers that could operate faster and perform many functions that larger computers could not. Today, microprocessors are used in a variety of products, such as digital watches, personal computers, microwave ovens, mobile communications and computing devices, telephone equipment, and electronic controls in automobiles.

The electronics industry is closely tied to economic conditions both within the United States and around the world. In the early 1970s and 1980s, total U.S. shipments of electronic equipment, components, and systems grew steadily and totaled many billions of dollars in sales. Exports comprised about 25 percent of the electronics industry's business. In the mid-1980s, however, despite a strong U.S. economy, the electronic components industry suffered a sharp downturn. Intense foreign competition and offshore operations by American companies contributed to a trade deficit. But high levels of research and development and capital expenditures in the late 1980s set the industry back on its feet, and by the mid-1990s, sales and exports of electronics were at record highs and the industry was once again strong. Since then, shipments by U.S. electronic components manufacturers have continued to grow.

Today, electronics manufacturing is global in scope. To compete effectively, U.S. electronics suppliers must sell to both domestic and foreign markets. Not only are foreign sales markets vital, but foreign labor markets are increasingly important, too. To stem production expenses, many U.S. electronics manufacturers have moved their assembly and testing plants to other countries where wages are lower. Even so, most manufacturers keep at least part of their operations in the United States. There are heavy concentrations of manufacturing plants along the Atlantic Coast from Baltimore northward, in the Midwest centering around Chicago, and on the Pacific Coast, with the greatest production center in southern California. One well-known area with a heavy concentration of electronics companies is Silicon Valley, an area south of San Francisco. This area developed with the growth of integrated circuits and microprocessors. During the 1960s and 1970s, many electronic component manufacturers settled their operations there and the area became known as a high-tech area with many companies doing cutting-edge research. Today, some companies are moving from the Silicon Valley and other traditional manufacturing areas to cities in Arizona, Texas, Oregon, and other states. Manufacturing plants are being established in many parts of the country.

In the 21st century, the electronics manufacturing industry continues to face many challenges. One of these challenges was to become more "green," or energy-conscious and environmentally friendly. Creating lead-free parts has become important and manufacturers had to create new materials and processes to become lead-free. Another challenge was the increasingly shorter life cycle of electronics products and parts. As companies compete, each seeks to bring an improved product to market first, leading to shorter and shorter life cycles and growing research and development budgets. Consumers are also demanding products that are environmentally friendly at the end of their life cycles, i.e., the ability to be recycled or refurbished for use rather than dumped in landfills.