Very large scale integration (VLSI) represents not only the threshold of a capability for combiningover 100 000 electronic components on a die of silicon, but also yet another stage in the growth of a volatile industry. The incredible feat of harnessing a wide range of technologies to achieve this degree of integration, and even hold out the prospect for evolution to 106elements and beyond, often tends to obscure the fact that this is also being implemented in high manufacturing volumes and at ever decreasing costs. As a result, it is expected that the characteristic rapid growth of integrated-circuit production will continue over the next decade. However, the scale of the industry has now reached a point where fundamental changes are likely and the pressures resulting from the manufacturing commitments and the market reactions will come to dominate the purely technical influences. VLSI, especially via the leverage of electronic systems, now represents a major influence on world economies, and the commitment necessary to cost-effectively produce such devices in volume stretches the resources of even the largest companies. The objective of the paper is to outline, against the background of the evolution of the integrated circuit industry, the wide consequences of VLSI technology, which, by the contribution it makes and the magnitude of the resources needed to even participate, raises issues at national ana strategic levels which are likely to be determining factors in the future direction of the industry.