Consumer electronics drive OEM spending
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 labour is cheap, a pool of engineers can be found easily and governments are handing out benefits in order to encourage OEMs locate R&D centres in their countries.
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 per cent 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 OEMsadding 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 Technologywhile others specialise in newer applicationssuch as TomTom."
While semiconductor spending habits are changingthe leading nation in electronic equipment design activity that influences chip spending remains the United Stateswith a projected $68.7 billion in design-inspired chip purchasing in 2007up 9 per cent from $63.1 billion in 2006. The only country that even comes close to this is Japanwith a projected $44.1 billion in 2007up 4.7 per cent from $42.1 billion in 2006.
Howeverother countriesspecifically those in Eastern Europehave experienced phenomenal growthas these nations are more than willing to give assistance to companies looking to invest in the region.
For examplethe Polish government has made a concerted effort to attract foreign investment by offering benefits on landtaxes and labour. Delphi and Bosch Group recently has invested in R&D centres in Poland in order to help expand their automotive electronics businesses.
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