Chips are up for OEMs

22 Feb 2007

Original equipment manufacturers (OEMs) like Dell and Nokia have increased the amount of semiconductors they consume, says analyst firm Gartner, with the manufacturers accounting for US$84bn in chips sold last year – up 9pc year

HP was the top semiconductor consumer with around US$12bn worth of chips bought, but Nokia and Dell have closed the gap to within US$0.5bn.

Samsung and Sony rounded out the top five semiconductor consumers, followed by Motorola, Siemens, Toshiba, LG and Apple.

“Nokia, Motorola and Siemens represented a large fraction of the increased consumption, driven by strong cell phone and communications growth,” said Alfonso Velosa, research director at Gartner.

“Data processing and telecommunications firms represented 75pc of the total semiconductor spending by the top consumers. Average semiconductor consumption by the top 10 firms grew from US$7.7bn in 2005 to $8.4bn in our preliminary estimates,” Velosa explained.

He explained that the top 10 OEMs were multinationals that have been implementing supply chain best practices for some time.

“They have experience in managing a large number of global supply chain partners. This experience is enabling these OEMs to better compete in commoditised markets by increasing the volume of products developed where product design and manufacturing may be controlled in different geographic regions by the OEM or its partners.

“Although semiconductor consumption will remain concentrated among the top OEMs, the design-in, sales, order and fulfilment channels will continue to evolve,” Velosa said.

By John Kennedy