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Semiconductor spending to grow by 8% this year

Posted: 01 Feb 2007     Print Version  Bookmark and Share

Keywords:consumer electronics  iSuppli  MP3 player 

Semiconductor spending by OEMs will grow 8.6 per cent this year, with the rise driven by a slew of consumer electronics products, reports iSuppli Corp.

The research firm also cited factors impacting semiconductor buying which include the rising consumption of notebook PCs, the increasing integration of multi-media features in mobile phones, the entrance of new companies into the MP3 player market and the arrival of new video game consoles.

"iSuppli now examines the spending habits of 181 OEMs, adding 14 new companies that have become big spenders and replacing the nine OEMs that were removed from our examination because of recent mergers and acquisitions," said Min-Sun Moon, analyst for OEM Semiconductor Spending and Design Influence at iSuppli. "Some of the newly-added OEMs are long-time players such as Kingston Technology, while others specialise in newer applications, such as TomTom."

The United States will still lead in electronic equipment design activity that influences chip spending, notes iSuppli. It is projected to spend Rs.3,11,348.40 crore ($68.7 billion) in design-inspired chip purchasing this year, up nine per cent from Rs.2,85,969.20 ($63.1 billion) last year. Japan comes next, with a projected spending of Rs.1,99,861.20 crore ($44.1 billion) in 2007, up 4.7 per cent from Rs.1,90,797.20 crore ($42.1 billion) in 2006.

However, countries in Eastern Europe have also experienced growth. According to the research firm, these nations are willing to give assistance to companies that eye investments in the region. For example, the government of Poland has made efforts to attract foreign investment by offering benefits on land, taxes and labour. Delphi and the Bosch Group have recently invested in R&D centres in the country for the expansion of their automotive electronics businesses.

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