This study investigates firm dynamics and productivity growth within IT manufacturing industry-specific features. The extensive business duration of vertically integrated with capital-share (VI) firms in their VI structure, despite agency costs, due to synergies from stable supply chains and lower transaction costs; new entrants in the industry and the structures; the strategic shifts that occurred in the non-VI (NVI) structure through self-selection, significantly contributed to productivity growth. The entry and exit impacts of VI firms in the industry and the structure were more pronounced than did NVI counterparts. TFP growth has been led mainly by technical progress and new entrants.