The top 10 original equipment manufacturer (OEM) firms accounted for $84 billion of the semiconductor market in 2006, representing a third of all semiconductor consumption, according to preliminary results from Gartner, Inc. This is a 9 percent increase from 2005 when the top 10 OEMs accounted for $77 billion of semiconductors sales.
HP was the top semiconductor consumer with approximately $12 billion, but Nokia and Dell have closed the gap to within $0.5 billion. Samsung and Sony rounded out the top five semiconductor consumers, followed by Motorola, Siemens, Toshiba, LG and Apple.
"Nokia, Motorola and Siemens represented a large fraction of the increased consumption, driven by strong cell phone and communications growth," said Alfonso Velosa, research director at Gartner. "Data processing and telecommunications firms represented 75 percent of the total semiconductor spending by the top consumers. Average semiconductor consumption by the top 10 firms grew from $7.7 billion in 2005 to $8.4 billion in our preliminary estimates."
Gartner analysts point out that the top 10 OEMs are in a diverse group of businesses. They focus on a variety of applications, ranging from large telecom equipment firms to industrial conglomerates. These OEMs operate under a variety of end market focuses. Nokia, HP and Dell are largely pure-play firms, focused on the cell phone or the PC and server markets. Sony is centered on consumer electronics, but also sells automotive and data processing products. Apple entered the top 10 for the first time, propelled by its broad mix of products, and in particular, its strong sales of portable media products.
“The top 10 OEMs in 2006 were multinational firms that have been implementing supply chain best practices over many years,” Mr. Velosa said. “They have experience in managing a large number of global supply chain partners. This experience is enabling these OEMs to better compete in commoditized markets by increasing the volume of products developed where product design and manufacturing may be controlled in different geographic regions by the OEM or its partners.”
“Although semiconductor consumption will remain concentrated among the top OEMs, the design-in, sales, order and fulfillment channels will continue to evolve,” Mr. Velosa said.
Additional information is available in the Gartner report "Top 10 Semiconductor Consumers, 2006 Preliminary Estimates". This report provides preliminary rankings for the top 10 companies worldwide. The report is available on Gartner’s Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=501076&subref=simplesearch. Later this year, Gartner Dataquest will publish an analysis of the top 50 OEM semiconductor consumers by application for 2006. This report will contain an in-depth analysis of each company’s semiconductor supply chain, including manufacturing and design locations.
This research is produced by Gartner's Semiconductors Worldwide group. This research group combines memory, microcomponents, logic, ASIC, analog, discrete device, RF and optical segments into a complete industry picture. Products, suppliers, startups, technologies, regional consumption, applications and emerging technologies are all covered in this broad program. To subscribe to this service, please contact Becky Tonnesen at 408-468-8287 or at firstname.lastname@example.org.
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