What Michigan is to cars, California is to printed circuit boards.
Small wonder, then, that a devastating three-year slump in the U.S. printed circuit-board industry has hit the Golden State especially hard.
In Orange County alone, at least a half-dozen circuit-board makers or their suppliers have registered big losses, laid off employees, filed for bankruptcy or shut down in the past year.
Among the afflicted: manufacturers such as Metropolitan Circuits, Data Design Laboratories and Diceon Electronics, and suppliers such as Century Laminators, Advanced Controls and Calay Systems.
Last year, 12 percent of the country's circuit-board companies closed, including more than a dozen in California, according to Kirk-Miller Associates, a Palo Alto, Calif.-based technology-research firm.
"The past three years I'd just as soon forget," said Bob Quest, president of Advanced Controls in Irvine, Calif., where sales have crumbled since 1988.
Some executives believe they're seeing the first glimmers of a recovery.
The Institute for Interconnecting and Packaging Electronic Circuits, a trade group, predicts that revenue for U.S.-made circuit boards will increase 5.5 percent to 7 percent this year, to about $6 billion. California accounts for about one-fourth of the revenue, according to Kirk-Miller.
But most experts agree that even when the crisis ends, the industry will never return to the glory days of the mid-1980s.
Then, the United States was home to about 2,000 circuit-board shops. Various sources put the current number at 700 to 800.
"There's been a cultural and technological revolution," said Larry Velie, owner of Velie Circuits, a Costa Mesa, Calif., maker that has used ingenuity and quality-manufacturing programs to stay afloat.
"In the '70s and early '80s, you could open a company with several hundred thousand dollars. Today, that's far from true. It's highly capital-intensive and takes technical and management skills."
Circuit boards are layers on which microscopic electronic circuits have been etched and semiconductors and other components are mounted. They are the building blocks of computers and are found in hundreds of other products, from fighter planes to cars to camcorders.
Making a circuit board -- also called a printed wiring board -- is a composite craft, combining machine tooling, photolithography RTC and metallurgy. The process requires more than 125 individual steps; goof up on one and a board is useless.
Today, 60 percent of the circuit boards made in the United States come from "merchant" shops that build boards under contract. The remainder are made by in-house operations at companies such as International Business Machines, Digital Equipment and American Telephone & Telegraph.
Selling printed circuit boards always has been a boom-or-bust proposition, but the latest down cycle has been one of the hardest and longest, industry experts said.
Why? To start, Japanese and other Asian competitors have grabbed a large chunk of the market, especially in simpler "commodity" boards that go into consumer electronics.
Higher capital requirements and technological innovation have squeezed some companies out of the business. Strict federal and state pollution regulations have made staying in the business too expensive for others.
The recession hasn't helped. When consumers stopped buying computers and home electronics and the government whacked defense budgets, demand for printed circuit boards plunged, too.
From 1988 to 1991, sales of U.S.-made printed circuit boards dropped 7 percent, according to the Institute for Interconnecting and Packaging Electronic Circuits, an industry trade group.
The downturn also has hurt companies that supply printed circuit-board makers with drills, laminate and other equipment and materials.
To regain customers, circuit-board shops cut prices. But lower prices meant lower profit margins, and often, the results proved disastrous.
Companies beat the downturn by pouring money into equipment, improving yields and perfecting manufacturing processes.
Velie Circuits has developed a soldering process that Larry Velie plans to market to other makers.
The company also has struck a bargain with a major customer, FileNet in Costa Mesa. In return for becoming FileNet's sole circuit-board supplier, Velie Circuits works for set fees.
Velie Circuits also stockpiles finished boards until the computer maker needs them, reducing FileNet's inventory costs, said Sam Rossiter, FileNet's purchasing and planning director.
"We share a lot of information between the companies. We've benefited from that," Mr. Rossiter said.
Trade groups are trying to help. The Institute for Interconnecting and Packaging Electronic Circuits, which has 1,800 members internationally, holds regional round tables at which company presidents and general managers can hash out common problems.
The group also is conducting its first industry study to develop benchmarks for productivity, financial controls, customer satisfaction and other areas.
"We're trying to help the independents be more competitive and increase U.S. manufacturing competitiveness," said Tony Hilvers, education and market-research director for the Chicago-based group.
Although most experts predict that orders will pick up this year, the long-term outlook is dim.
The industry will continue to shrink, with the top 10 companies accounting for more business, said Harvey Miller, president of Kirk-Miller Associates.
However, as long as there are start-up computer and technology companies, there will be a need for small printed circuit-board suppliers, Mr. Miller said.
"There's a match between vendors and customers," he said.
"Little companies who need boards can't even go to a Velie, let alone the [larger companies]. The little shops are there to serve them."