But China’s growth in electronic design generated semiconductor activity continues and country closes on US and other top nations
The United States in 2006 is expected to maintain its lead in the worldwide electronic equipment design business, with the nation’s activities in this area driving the most semiconductor purchasing of any country on earth, according to new data from iSuppli Corp.’s Regional Design Influence Tool (DIT).
However, China’s rapid growth in electronic design generated semiconductor purchasing activity is continuing and the country is closing in on the United States and the other top nations.
“Design of electronic goods leads directly to equipment production, which in turn drives semiconductor purchasing. Companies that engage in design of electronic equipment, such as PCs, mobile phones and televisions, also are responsible for specifying the use of particular chips in the products being developed,” said Min-Sun Moon, OEM spend analyst for iSuppli. “Thus, these companies and the nations where they operate have a major influence on global semiconductor spending.”
Electronic system design in the United States is expected to drive 34.9 percent of global semiconductor purchasing in 2006, amounting to $62.1 billion worth of chip sales for the year. This represents a 6.6 per cent increase from $58.3 billion in 2005.
“The fact the United States is the largest nation for electronic design contrasts sharply with the country’s propensity to outsource actual manufacturing to other countries,” Moon said.
“While actual production of electronic equipment is decreasing in the United States, the nation’s design activity that drives semiconductor spending is on the rise. However, as a percentage of worldwide semiconductor spending, the United States’ design-inspired chip purchasing will actually decline slightly in 2006, decreasing from 35.2 per cent in 2005.”
Japan is expected to maintain its second-place ranking in 2006, with its design activity generating 24.9 per cent of worldwide chip sales, followed by third-placed Taiwan at 8.6 per cent.
China/Hong Kong is expected to achieve the leading growth among the Top 10 nations in 2006, with a 26.1 per cent expansion. Electronic design activities in the region will influence 6.5 per cent of worldwide semiconductor purchasing in 2006, compared to 5.6 per cent in 2005. This will cause China/Hong Kong to surpass Germany and South Korea to become the world’s fourth-largest national influencer of electronic design generated semiconductor spending in 2006.
China/Hong Kong’s advance is being driven by its extensive work in the computer design area. Furthermore, companies increasingly are moving operations out of Western Europe and into China, boosting the nation’s activities in this area.
The table below and attached presents the iSuppli DIT’s ranking of semiconductor spending driven by electronic equipment design for the Top 6 electronic-design nations in the world in 2005 and 2006.
iSuppli Table: Top-Six Nations that Influence Semiconductor Spending Via Electronic Equipment Design in 2005 and 2006 (Ranking by Revenue in Millions of US.Dollars)
2006 Rank Country 2005 2006
1 United States 58,311 62,143
2 Japan 41,883 44,432
3 Taiwan 14,006 15,342
4 China/Hong Kong 9,235 11,649
5 South Korea 10,396 10,673
6 Germany 9,294 9,443
Source: iSuppli Corp. September 2006
While China/Hong Kong in 2006 is expected to post the largest increase in design-driven semiconductor spending among the Top 10 nations that conduct these activities, India will lead all countries. India’s electronic-design influence on semiconductor spending will surge by 76 per cent in 2006, handily beating other fast-growing nations like Poland and Slovakia, which are expected to see increases of 60 per cent and 53 per cent respectively.
India’s electronic system design work tends to be focused on wireless products.
For more information, visit www.isuppli.com
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