SAN FRANCISCO The United States remains the dominate influencer on semiconductor spending through electronic equipment design, though China continues to be a fast-rising force, according to new data from market research firm iSuppli Corp.
Electronic system design in the U.S. 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, according to data from iSuppli's regional Design Influence Tool (DIT). This represents a 6.6 percent increase from $58.3 billion in 2005, iSuppli said.
"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," said Min-Sun Moon, OEM spend analyst for iSuppli. "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."
Moon said U.S.-design-inspired chip purchasing will actually decline slightly in 2006 as a percentage of worldwide semiconductor spending, decreasing from 35.2 percent in 2005.
Japan is expected to maintain its second-place ranking in 2006, with its design activity generating 24.9 percent of worldwide chip sales, followed by third-placed Taiwan at 8.6 percent, Moon said.
iSuppli (El Segundo, Calif.) said China's rapid growth in electronic-design- generated semiconductor purchasing activity is continuing and the country is closing in on the U.S. and the other top nations.
China/Hong Kong is expected to achieve the leading growth among the Top 10 nations in 2006, with a 26.1 percent expansion, according to data from iSuppli's Regional Design Influence Tool (DIT). Electronic design activities in the region will influence 6.5 percent of worldwide semiconductor purchasing in 2006, up from 5.6 percent in 2005. China will pass Germany and South Korea to become the world's fourth-largest national influencer of electronic-design generated semiconductor spending this year, iSuppli said.
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"Design of electronic goods leads directly to equipment production, which in turn drives semiconductor purchasing," Moon said. "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. Thus, these companies and the nations where they operate have a major influence on global semiconductor spending."
China's advance is being driven by extensive work in the computer design area, iSuppli said. Companies increasingly are moving operations out of Western Europe and into China, boosting the nation's activities in this area, the firm said.
While China 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, according to iSuppli. India's electronic-design influence on semiconductor spending, generally focused on wireless products, will surge by 76 percent in 2006, besting other fast-growing nations like Poland and Slovakia, which are expected to see increases of 60 percent and 53 percent, respectively, the firm said.
iSuppli said its DIT presents design influence in terms of semiconductor purchases in U.S. dollars for 172 OEMs worldwide, representing 75 percent of the global chip market. Data is broken down by the nine major application markets: computer, computer peripheral, consumer, wireless, wired, automotive, industrial, medical and military/aerospace, the firm said. Data also is divided by 30 semiconductor device categories and by 41 countries.