Top 10 Original Equipment Manufacturers

21. 03. 2008 | 4/2008 | Comments [0]

Top 10 Original Equipment Manufacturers Accounted for $91 Billion of Semiconductors Purchased in 2007. The top 10 original equipment manufacturer (OEM) firms accounted for $91 billion of the semiconductor market in 2007, representing a third of all semiconductor consumption, according to preliminary results from Gartner, Inc.

Top 10 Original Equipment Manufacturers Accounted for $91 Billion of Semiconductors Purchased in 2007

The top 10 original equipment manufacturer (OEM) firms accounted for $91 billion of the semiconductor market in 2007, representing a third of all semiconductor consumption, according to preliminary results from Gartner, Inc . The leading applications were PCs and mobile phones. “Given the strong revenue and unit shipment growth of most of the leading OEMs in 2007, the semiconductor consumption threshold to be in the top 10 was raised to $5.9 billion, $1 billion more than in 2006,” said Alfonso Velosa, research director at Gartner. However, there was significant average-selling- price (ASP) erosion, especially in the key PC and mobile-handset markets. This limited the growth of these firms' semiconductor consumption and thus their cost of goods sold.”

Hewlett Packard was the No. 1 consumer of semiconductors, as it accounted for $15 billion in 2007, compared with $14 billion in 2006, an 8 percent increase. As the leading PC manufacturer, HP was the leading consumer of microprocessors and memory semiconductors. Nokia was the No. 2 consumer of semiconductors, accounting for $13 billion in semiconductor consumption.

“HP and Nokia showed that even leading manufacturers can increase their revenue at double-digit rates,” Mr. Velosa said. “Nokia underwent a major shift in its semiconductor-sourcing strategy, starting to move away from designing application-specific integrated circuits (ASICs) for its handsets to using off-the-shelf application-specific standard products (ASSPs).”

Firms such as Apple (No. 9 vendor) and Nintendo (No. 15 vendor) demonstrated how innovative uses of technology and a keen understanding of consumer requirements can lead to semiconductor consumption growth exceeding 30 percent. They accounted for $5.9 billion and $3.6 billion in semiconductor brand-based total available market (BTAM) respectively, based on the strength of the Apple computers, iPhones and iPods, and the Nintendo Wii and DS. Apple's semiconductor consumption grew 32 percent, while Nintendo's grew 127 percent.

“Their integration of sensors and focus on industrial design and the 'user experience' set an example that few OEMs will find easy to emulate,” Mr. Velosa said. “Doing so will require several things: expertise in software; a focus on ease of use and the user experience; relationships with major content developers; and an understanding of the overall electronics 'ecosystem.'

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