Consumer-Electronics products drive OEM spending as design activity rises in emerging regions

New applications in the consumer electronics and computer markets are driving OEMs to change their semiconductor spending habits, according to iSuppli Corp.

However, this is only one of the trends in semiconductor spending and design influence, as the electronics market experiences a spate of design activity cropping up in emerging regions where labor is cheap, a pool of engineers can be found easily and governments are handing out benefits in order to encourage OEMs locate R&D centers in their countries.

Hey, big spender
Factors impacting semiconductor buying include the rising consumption of notebook PCs, the increasing integration of multimedia features in mobile phones, the entrance of new companies into the MP3 player market and the arrival of a bevy of new video game consoles.

Semiconductor spending by OEMs is expected to grow by 8.6 percent in 2007, with the rise driven by a number of consumer electronics products that represent the fastest-growing segments for semiconductor spending.

"iSuppli now examines the spending habits of 181 OEMs, adding 14 new companies that have become big spenders and replacing the nine OEMs that were removed from our examination because of recent mergers and acquisitions," said Min-Sun Moon, analyst for OEM Semiconductor Spending and Design Influence at iSuppli. "Some of the newly-added OEMs are long-time players such as Kingston Technology, while others specialize in newer applications, such as TomTom."

A global influence
While semiconductor spending habits are changing, the leading nation in electronic equipment design activity that influences chip spending remains the United States, with a projected $68.7 billion in design-inspired chip purchasing in 2007, up 9 percent from $63.1 billion in 2006. The only country that even comes close to this is Japan, with a projected $44.1 billion in 2007, up 4.7 percent from $42.1 billion in 2006.

However, other countries, specifically those in Eastern Europe, have experienced phenomenal growth, as these nations are more than willing to give assistance to companies looking to invest in the region. For example, the Polish government has made a concerted effort to attract foreign investment by offering benefits on land, taxes and labor. Delphi and Bosch Group recently have invested in R&D centers in Poland in order to help expand their automotive electronics businesses.

-- What are the new companies on the list of big spenders?
-- Which applications are changing the landscape for global semiconductor spending?
-- How does the price of certain components such as DRAM affect spending?
-- Why is Eastern Europe one of the largest growing regions for design activity?

Find out about iSuppli's Design Influence and OEM Semiconductor Spend tools by joining Moon on Wednesday, Jan. 31 at 8:30. U.S. Pacific Time as she presents a unique Webinar event entitled: Trends in Spending and Design Influence: H2 2006 Updates.

Some of the issues the Webinar will tackle will include:
-- How mergers and acquisitions have changed the sphere of semiconductor-spend influence for certain companies.
-- The breakdown of the Top-20 semiconductor spenders.
-- The revenue growth for each of these companies in comparison to how much they spent on semiconductors.
-- Which global regions are experiencing a high rate of design activity growth.
-- Which companies are the leaders in global design activity.
-- Which new features have been added to design tools.

Attendees can call in to the Webinar to hear Moon's comments and can use an Internet browser to view the presentation slides. She will take questions from Webinar attendees.

For more information, please visit: http://www.isuppli.com/events/default.asp?EventCode=WB