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Electronics Production | October 18, 2006

Quanta & Asustek the Biggest Chip Spenders

Quanta Computer Inc. and Asustek Computer Inc. are expected to be the leading buyers of semiconductors among all Original Design Manufacturers (ODMs) in 2006.

Although Wistron Corp. will achieve the fastest chip spending growth in the industry for the year, according to data from iSuppli Corp.'s new ODM Semiconductor Spending Analysis service. Semiconductor spending by Taiwan-based Quanta will rise to $5.2 billion in 2006, up 17.9 percent from $4.4 billion in 2005, allowing it to keep the number-one position it has held in ODM chip buying at least since 2004. Meanwhile, Asustek, also of Taiwan, will buy $4.7 billion worth of semiconductors in 2006, up 20.1 percent from $3.9 billion in 2005, solidifying its hold on second place. The figure below presents iSuppli's ranking of the top-six ODM semiconductor buyers in 2006. "Most of Quanta's chip purchasing is for making computer products, mainly notebook PCs," observed Min-Sun Moon, analyst, OEM semiconductor spending and design influence for iSuppli. "Because of this, PC-oriented chips like microprocessors, logic Application-Specific Standard Products (ASSPs) and DRAMs are the major types of semiconductors that Quanta is expected to buy in 2006." Asustek also relies heavily on the PC market, with 75 percent of its total ODM semiconductor spending in 2006 expected to be dedicated to computing-related chips, Moon noted. Wistron leads purchasing growth The ODM with the highest growth rate in semiconductor purchasing in 2006 will be number-three-ranked Wistron of Taiwan, whose spending will rise to $2.25 billion in 2006, up 89 percent from $1.98 billion in 2005. Wistron is a pure ODM provider with more than 75 percent of its semiconductor spending generated by notebook PCs. The company evidently also is increasing chip spending in the consumer segment due to its expanding LCD-TV business. Wistron's prodigious rise will allow it to rise one rank and pass Compal Electronics to take the third-place position in 2006. Inventec Appliances gets a boost from Apple "Number-six ODM Inventec Appliances of Taiwan will see its semiconductor spending soar to $1.8 billion in 2006, up 49 percent from $1.2 billion in 2005, mainly due to big orders from Apple Computer Inc. for its line of iPod MP3 music players," Moon said. "However, this represents a slowdown from 2005, when Inventec led ODM chip spending growth. The deceleration is due to Apple adding new ODM and Electronics Manufacturing Services (EMS) providers to its iPod contract-manufacturing roster. The slowdown for Inventec is expected to continue in 2007." ODM chip spending trends Semiconductor spending by the top-five ODMs increased by 26.1 percent for 2005, and is expected to rise by another 24.5 percent in 2006 and by 28.6 percent in 2007. The top-five ODMs will account for more than 60 percent of the top-25 ODMs' semiconductor spending in 2006. In 2006, the computer segment will account for 66 percent of the top-25 ODMs' semiconductor spending. About iSuppli's ODM Semiconductor Spend Analysis service The outsourcing trend to ODMs is changing the landscape of semiconductor spending. The ODMs' impact is growing as they account for a greater percentage of global semiconductor consumption each year. iSuppli's ODM Semiconductor Spend Analysis service offers a database tool that examines semiconductor spending of the top-25 global ODMs and provides semiconductor spending trends and outsourcing outlook. The data includes direct dollar spending by device type, application and year. Click Here for further details on this service.
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