Philco was one of the pioneers of transistorized computers, also known as second generation computers. After the company developed the surface barrier transistor, which was much faster than previous point-contact types, it was awarded contracts for military and government computers. Commercialized derivatives of some of these designs became successful business and scientific computers. The TRANSAC (Transistor Automatic Computer) Model S-1000 was released as a scientific computer. The TRANSAC S-2000 mainframe computer system was first produced in 1958, and a family of compatible machines, with increasing performance, was released over the next several years.
However, the mainframe computer market was dominated by IBM. Other companies could not deploy resources for development, customer support and marketing on the scale that IBM could afford, making competition in this segment difficult after the introduction of the IBM 360 family. Philco went bankrupt and was purchased in 1961 by Ford Motor Company, but the computer division carried on until the Philco division of Ford exited the computer business in 1963. The Ford company maintained one Philco mainframe in use until 1981.