September 29, 2006 – The US is still driving the most semiconductor purchases and thus wields the most influence in electronic equipment design, but emerging markets are catching up fast, according to a new report from iSuppli Corp.

Design of electronic goods directly leads to equipment production, which drives semiconductor purchasing. Thus, companies that design equipment such as PCs, mobile phones, and TVs are responsible for specifying the use of particular chips in those products, and have a major influence on global semiconductor spending, explained the El Segundo, CA-based firm.

In the US, electronic equipment manufacturing is decreasing, but design activity is on the rise. Domestic electronic systems design in the US is expected to drive 34.9% of global semiconductor purchasing in 2006, down from 35.2% in 2005, though the actual dollar amount in terms of chip sales ($62.1 billion) will be up 6.6% from a year ago. This “contrasts sharply with the country’s propensity to outsource actual manufacturing to other countries,” said Min-Sun Moon, OEM spend analyst for iSuppli, in a statement.

Japan is seen maintaining second place in the rankings, with design activity generating 24.9% of worldwide chip sales, followed by Taiwan at 8.6%.

Leveraging more work in computer design and an influx of operations from Western Europe, China/Hong Kong is expected to influence 6.5% of worldwide semiconductor purchasing this year, up from 5.6% a year ago, surpassing Germany and South Korea to be the world’s fourth-largest national influencer of electronic design generated semiconductor spending. It’s the leading region in terms of design activity growth (26.1%).

Also on the rise is India, whose electronic-design influence on semiconductor spending will lead all countries, surging 76% in 2006 thanks to a focus on wireless products. Other fast-growing nations include Poland and Slovakia, expected to see increases of 60% and 53%, respectively.

Top nations that influence semiconductor spending via electronic equipment design

(Revenues in US $M)

2006 rank……………Country…………………….2005……….2006
1……………………….US……………………………..58,311……….62,143
2……………………….Japan………………………..41,883……….44,432
3……………………….Taiwan………………………14,006……….15,342
4……………………….China/Hong Kong………..9235……….11,649
5……………………….South Korea………………10,396……….10,673
6……………………….Germany……………………..9294………….9443