STAMFORD, Conn., February 20, 2007 — 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 athttp://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.
Feb 20, 2007
HP, Nokia, Dell, Top 10 OEM Consumed 33% of Semiconductors
Aug 20, 2006
Expect opportunity, risk in China's supply chain
Expect opportunity, risk in China's supply chain
James Carbone -- Purchasing, 5/20/2004
For many electronics purchasers, China has become a huge sourcing opportunity as well as a significant challenge. It is an opportunity because the amount of electronic components including passives, connectors, semiconductors and printed circuit boards being made in China continues to grow. For instance, the worldwide electronic connector market grew 11.2% in 2003. However, China led all regions of the world with a 30.6% growth rate, according to connector industry researcher Bishop & Associates.
Many U.S., Japanese and European suppliers have opened factories in China to take advantage of low-cost labor and to support the growing electronics equipment manufacturing industry in Asia. Some component companies have entered into joint ventures with Chinese companies to produce parts.
The growth of component manufacturing in China is the reason that component prices have continued to fall even though unit shipments are rising.
However, while many low-cost components can be sourced in China, there are issues that often can be a thorn in the side to buyers. Product quality from indigenous suppliers is often an issue. Price is often the main concern and component quality takes a back seat.
Counterfeit components continue to be a problem. In some cases components being sold in China are just shells, or sometimes a part may not have the performance requirements that they are supposed to have. In other cases, a part carries the name of a leading manufacturer, but it is in fact a knockoff.
Another challenge is a lack of understanding of how business in the West is done. Western companies often require a supplier to provide a lot of information about its operations before deciding to do business with the vendor. In China, indigenous suppliers are often leery of providing detailed information about their operations.
The issues involved in sourcing in China can be daunting for any size OEM or EMS provider. However, large OEMs are often better able to deal with the issues because they have more resources. Often they have international procurement offices (IPO) to evaluate and manage suppliers.
But purchasers at smaller companies often lack the resources to do the supplier evaluation needed to avoid getting stuck with defective or counterfeit parts. However, there are strategies that any size company can employ to reduce risk when sourcing in China...
Aug 11, 2006
Top Emerging Network Equipment Companies
- Actelis Networks, Fremont, Calif., which provides technology to boost the speed, range, and reliability of copper local loop facilities
- BitBand Technologies, Netanya, Israel, which develops and marketsAppliances for streaming video and audio over IP networks
- Callipso, Santa Ana, Calif., which provides VoIP services to telecommunications carriers and prepaid card providers
- DataPower Technology, Cambridge, Mass., which provides network infrastructure to improve XML performance and security
- Force10 Networks, Milpitas, Calif., which develops Gigabit and 10 Gigabit Ethernet switching and routing equipment for business
- Ikanos Communications, Fremont, Calif., which develops silicon products for broadband communications over copper wiring
- Nimcat Networks, Ottawa, Ontario, which provides embedded call processing software
- P-Cube, Sunnyvale, Calif., which provides products that enable network access providers to bill based on services and applications used on their networks
- Pedestal Networks, Fremont, Calif., which develops infrastructure to enable DSL over any local loop
- my favorite Vonage, Edison, NJ, which provides voice-over-IP services
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