Post a CommentOEM semiconductor demand out of sync with sales, Gartner says
Gartner's preliminary market share analysis indicates that 2007 semiconductor revenue grew only 2.9%, while in the same year PC shipments grew 11% and cell phone shipments grew at double-digit rates.
By Suzanne Deffree, Managing Editor, News -- Electronic News, 2/25/2008
The top 10 OEMs consumed semiconductors worth $91 billion in 2007, a 1% rise over 2006, but less than the semiconductor industry's 3% growth between 2006 and 2007, according to a new report from Gartner.
Gartner's preliminary market share analysis indicates that 2007 semiconductor revenue grew only 2.9%, while in the same year PC shipments grew 11% and cell phone shipments grew at double-digit rates.
“Thus, it appears that the major electronic applications revenue trends are out of sync with semiconductor industry sales. This underlines an ongoing issue for the semiconductor industry — significant erosion of semiconductor content and average selling prices (ASP), especially in core markets,” Gartner analysts Alfonso Velosa and Jon Erensen wrote in this morning’s Semiconductor DQ Monday Report from the market research company.
The report pointed to Hewlett-Packard as the top OEM in terms of semiconductor purchases, spending $15 billion on semiconductors last year. The report also pointed out Nintendo, which saw semiconductor consumption more than double year over year to $3.6 billion in 2007.
Gartner said Nintendo’s spending was largely based on its Wii gaming system, which employs MEMS sensors in its interactive remotes and is expected to out sell the PS3 and Xbox 360 this year.
Calling Nintendo a “trendsetter,” Gartner said few rival OEMs will be able to copy its success, as doing so would require expertise in software; a focus on ease of use and the overall user experience; relationships with major content developers; and an understanding of the overall electronic ecosystem.
“We expect many electronics firms to experiment with touch screens, nonoptical and optical sensors, and multiple wireless technologies — but many of these offerings will fail, due to poor software and user interface integration. However, these activities should result in growth opportunities for semiconductor firms that provide relevant components,” the analysts wrote.
According to Gartner, the top application areas remain data processing and communications electronics, which represented almost three-quarters of the semiconductors consumed by the top 10 OEM firms.
