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HP leads ranking of Top 20 OEM semiconductor spenders
Hewlett-Packard is projected to be the top OEM semiconductor spender in 2010, spending an estimated $12.6 billion this year, compared to $10.99 billion in 2009, according to iSuppli Corp. Total semiconductor spending in 2010 among original equipment manufacturers (OEMs) and electronic manufacturing service (EMS) providers will record double-digit increases, according to the market researcher.
iSuppli projects among electronic equipment OEMs spending in 2010 will rise to $177.9 billion, up 13 percent from $157.0 billion in 2009. iSuppli also forecasts that the total spend by EMS providers in 2010 will amount to $37.7 billion, up 15.1 percent from $32.8 billion in 2009.
iSuppli’s OEM spending projections include all chips consumed by end products regardless of how the chips are purchased including OEM direct purchases or through EMS providers or distributors.
“The increase in OEM semiconductor spending in 2010 represents a turnaround for the market from 2009,” said Min-Sun Moon, senior analyst for semiconductor spend and design at iSuppli, in a statement. “Spending last year plunged by 16.1 percent — due not only to a decline in the average selling price of chips but also because of a drop in shipments. Although still cautious, electronic OEMs this year are gearing up to gain more share in their respective markets — a strategy that will translate into greater semiconductor spending.”
After HP, the second place OEM spender for 2010 will be Samsung Electronics, expected to spend $12.5 billion, compared to $10.3 billion last year. However, iSuppli projects that Samsung will take over the No.-1 title in 2011, thanks to its broad range of businesses including new wireless handsets, thin LED-backlit TVs and 3-D TVs that will drive increased spending for the company.
Nokia follows in third place, with Apple in fourth place moving past Dell. iSuppli said Apple didn’t start appearing in the ranks of the top 10 until the introduction of the iPhone in 2007. Apple is expected to surpass Nokia in 2011, moving into the number three position.
The projected increase in spending this year for EMS providers follows a significant drop in revenue in 2009 due to big declines in OEM shipment orders, said iSuppli. However, large providers can expect to recover quickly in 2010 including top EMS spenders Foxconn, Flextronics, Jabil Circuit and Celestica.
Foxconn is clearly expected to rank No.-1 with projected spending of $22.6 billion in 2010, up 18.7 percent from $19.0 billion in 2009, boosted by the company’s manufacturing of HP products, Nintendo’s Wii, Sony’s PlayStation 3 and Apple’s iPod, iPhone and the iPad.
Flextronics follows with a projected spend of $7 billion in 2010, up 8.8 percent from $6.4 billion last year. The EMS giant, headquartered in Singapore and whose clients include Sony Ericsson, HP and Research In Motion, will continue to expand manufacturing facilities in China, said iSuppli.
The biggest markets for EMS providers include compute platforms and wireless communications. However, the share of smaller markets will increase over time, indicating that OEMs will start outsourcing other types of products besides computers and handsets, said iSuppli.
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