LONDON – The top ten OEMs, led by Hewlett Packard, were responsible for $104.3 billion of semiconductor chip purchases in 2010, or 34.7 percent of the market, according to market research company Gartner Inc.
The total semiconductor market in 2010 was $300.31 billion up 33.7 percent from 2009, Gartner said.
Eight of the top 10 companies in 2009 remained in the top 10 in 2010 and it includes three companies each from the Americas, Asia/Pacific and Japan and one company from EMEA.
The major growth drivers in 2010 were mobile PCs, smartphones and LCD TVs. PC vendors such as HP, Apple, Dell and Lenovo increased their design TAM greatly in 2010 (see Table 1) thanks to strong demand for mobile PCs. Samsung Electronics succeeded in riding the trend of the smartphone boom, while Nokia struggled. Samsung, Sony, Toshiba and Panasonic enjoyed market growth from flat-panel TVs, which saw them accelerate their design TAM.
As a new-style vertically integrated company, Apple provides hardware, software and services for PCs, smartphones, portable media players and media tablets, while the production is outsourced to electronics manufacturing service (EMS) providers. While its TV business is currently small, it is continuing to invest in the TV market by shipping new Internet Protocol (IP) set-top boxes for future growth. Google also intends to expand its platform business to the TV market, and Gartner believes that the TV service platform market is a key growth segment in the coming years.
"Judging from purchasing TAM, Asia/Pacific, and especially China, offers the greatest opportunities in most of the device and application market segments," said Masatsune Yamaji, senior research analyst at Gartner. "It will be difficult for most of the semiconductor device vendors, especially replaceable general-purpose device vendors, to achieve the full design-win benefit without establishing a strong distribution network in Asia/Pacific."
Table 1: Top 10 Semiconductor Design TAM by Company, Worldwide (Millions of Dollars)
There was a list a few months ago of the top 20 semi companies. Intel is always at the top. The top ten was dominated by memory makers as you might guess by the number of computer companies on the list. The highest volume market in the world is for cellular phones which are using more memory chips as 4G phones come to market.
The last paragraph is interesting: "...to achieve the full design-win benefit without establishing a strong distribution network in Asia/Pacific."
I would go as far as saying it is not just the the distribution network in Asia/pacific, it is also the local R&D / product development that need to be put in place to realize more growth and market capture. In fact China insists on this with many foreign investors.
Interesting, but I wonder how accurate some of these numbers actually are given the amount of outsourcing by some of these companies. It is extremely difficult (impossible?) to know how much of some of the other manufacturers purchases were for products being built for each of these. Of course, knowing the BOM for those products and the number built will allow some backward calculations to get there. Overall, the numbers are probably fairly accurate.
Nokia is the one to watch. It's been a tough year of product delays, internal strife, and questioned OS plans and they slipped only slightly. If they get it together their unique approach could give them cache and cash... but another repeat performance of this type of growth rate comparisons and they'll be slipping two spots, not just one. Of course, it is hard for me to imagine their MeeGo strategy bearing substantial fruit in its first year of rollout... and harder still to imagine immediate rewards if they change horses. Stephen Elop has got his work cut out for him.
Second on my watch list is Apple v. Samsung. Apple has serious competition on the smartphone front already realized and CES shows they could see similar in tablets. What a crazy-cool industry.