Electronics Production | September 29, 2006
US Maintains Lead in Electronic Design Influence But China's Advance Continues
The United States in 2006 is expected to maintain its lead in the worldwide electronic equipment design business, with the nation's activities in this area driving the most semiconductor purchasing of any country on earth, according to new data from iSuppli Corp.'s Regional Design Influence Tool (DIT).
However, China's rapid growth in electronic-design- generated semiconductor purchasing activity is continuing and the country is closing in on the United States and the other top nations. "Design of electronic goods leads directly to equipment production, which in turn drives semiconductor purchasing. 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," said Min-Sun Moon, OEM spend analyst for iSuppli. "Thus, these companies and the nations where they operate have a major influence on global semiconductor spending." Electronic system design in the United States 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. This represents a 6.6 percent increase from $58.3 billion in 2005. "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," Moon said. "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. However, as a percentage of worldwide semiconductor spending, the United States' design-inspired chip purchasing will actually decline slightly in 2006, 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. China/Hong Kong is expected to achieve the leading growth among the Top 10 nations in 2006, with a 26.1 percent expansion. Electronic design activities in the region will influence 6.5 percent of worldwide semiconductor purchasing in 2006, compared to 5.6 percent in 2005. This will cause China/Hong Kong to surpass Germany and South Korea to become the world's fourth-largest national influencer of electronic-design generated semiconductor spending in 2006. China/Hong Kong's advance is being driven by its extensive work in the computer design area. Furthermore, companies increasingly are moving operations out of Western Europe and into China, boosting the nation's activities in this area. The table below and attached presents the iSuppli DIT's ranking of semiconductor spending driven by electronic equipment design for the Top 6 electronic-design nations in the world in 2005 and 2006. While China/Hong Kong in 2006 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. India's electronic-design influence on semiconductor spending will surge by 76 percent in 2006, handily beating other fast-growing nations like Poland and Slovakia, which are expected to see increases of 60 percent and 53 percent respectively. India's electronic system design work tends to be focused on wirelessproducts.
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