Gartner: Top 10 OEMs Accounted for $91B of Semiconductors Purchased in 2007
March 13, 2008 // Published as a news service by IHS
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The top 10 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, accounting for $15 billion in 2007, compared with $14 billion in 2006, an 8% 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, Gartner said.
"HP and Nokia showed that even leading manufacturers can increase their revenue at double-digit rates," 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 an understanding of consumer requirements can lead to semiconductor consumption growth exceeding 30%, Gartner said.
They accounted for $5.9 billion and $3.6 billion in semiconductor brand-based total available market (BTAM), respectively, based on the Apple computers, iPhones and iPods, and the Nintendo Wii and DS. Apple's semiconductor consumption grew 32%, while Nintendo's grew 127%.
"Their integration of sensors and focus on industrial design and the user experience set an example that few OEMs will find easy to emulate," 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," he said.
For more information about the Gartner report Top 10 Semiconductor Consumers, 2007 Preliminary Estimates, visit http://www.gartner.com/DisplayDocument?ref=g_search&id=609316&subref=simplesearch.
Source: Gartner Inc.