This study of the applications of microelectronic devices in industry, together with an assessment of their value for use in schools, emphasizes the basic principles underlying the new technology and the practical ways in which these can contribute to associated work in computing and other disciplines in the school curriculum. Following a description of general issues relating to Scotland, the microchip, and the school, projects simulating industrial processes are described in detail, e.g., projects involving only a microcomputer (stock control system, production line monitoring, setting out road curves); applications using stepping motors (model of numerically-controlled lathe, model "milling machine," model graph plotter, computer-controlled robot arm, general duties, small model of production line); projects using analog-digital interfaces; projects using simple switches (using microcomputers as a counter, traffic light control, production monitor for using individual operator switches); and implementation of simple switch experiments. The report concludes with comments on a few aspects of the new technology and descriptions of stepping motors and their operation, input and output switch signals, and analog conversion. (LMM)