SAN JOSE--Computer applications--mostly in PCs--continued to be the top consumers of semiconductors in 1999, but communications equipment makers moved higher in ranks of chip buyers, according to a new report released by Dataquest Inc. today.
The report on chip buying among original equipment manufacturers said four of the top OEM semiconductor users were computer companies: Compaq ($8.5 billion in chip purchases); IBM (more than $5.9 billion); Dell (nearly $5.9 billion); and Hewlett-Packard ($5.5 billion). Dataquest said communications OEMs followed: Siemens ($4.9 billion); Motorola (more than $3.2 billion); Ericsson ($2.4 billion); Nokia (nearly $2.3 billion); and Lucent ($2.2 billion).
Intel Corp. was ranked 10th among the top OEM semiconductor buyers with nearly $2.2 billion in chip purchases.
"The worldwide personal computer industry continues to post double-digit growth, and the semiconductor companies are reaping the benefits, as the top four purchasers of semiconductors spent more than $25.8 billion in 1999," said analyst Benjamin Thompson in Dataquest's Semiconductor Application Markets Worldwide program. "Wireless technology is driving strong semiconductor sales in the communications market."
Dataquest earlier estimated that about 25% of the $160 billion in chip sales last year went to PCs. Communications systems consumed about 22% of the semiconductor sold in 1999 with consumer products using 16%, automotive 6%, and other applications taking 31% of the chip sales. In 1995, only 11% of semiconductor revenues came from communications systems while PCs accounted for about 30% five years ago.
PC consumption of semiconductors will probably stay in the 22-25% range, based on sales volume, for the next couple of years because of DRAM shortages and higher memory prices, said Dataquest analyst Clark Fuhs during a presentation at this month's Industry Strategy Symposium in Pebble Beach, Calif. But later in the decade, communications' share of chip sales is expected to over take PCs as new networking applications emerge and wireless systems continue to strong growth.