Mon, Oct 30, 2006 - Page 12 News List

Chip spending by five major ODMs to post double-digit rise: iSuppli report

By Jason Tan  /  STAFF REPORTER

Aggregate semiconductor spending by the nation's five major original design manufacturers (ODMs) is expected to rise by an annual growth rate of 24.5 percent this year, fueled by demand in computer manufacturing, according to market researcher iSuppli Corp.

The figure, a slight slowdown from last year's 26.1 percent growth rate, is expected to recover and rise 28.6 percent next year, iSuppli said in a recent report.

The five major ODMs are Quanta Computer Inc (廣達電腦), the world's largest notebook maker, and its smaller notebook rivals Compal Electronics Inc (仁寶電腦) and Wistron Corp (緯創), as well as Asustek Computer Inc (華碩電腦), the world's largest motherboard maker, and Inventec Appliances Corp (英華達), a major handset maker.

"The ODMs' impact is growing as they account for a greater percentage of global semiconductor consumption each year," the report said.

Together, the five firms will account for more than 60 percent of semiconductor spending by the world's top 25 ODMs, it said.

Among the top makers, Quanta and Asustek will lead the chip buying.

Quanta's spending is poised to rise to US$5.2 billion this year, up 17.9 percent from US$4.4 billion last year, cementing its leadership since 2004, iSuppli said.

"Most of Quanta's chip purchasing is for production of computer products, mainly notebook PCs," analyst Min-sun Moon said in the report.

Its big purchases will therefore be PC-related semiconductors such as microprocessors and dynamic random access memory chips, Moon said.

Meanwhile, Asustek will buy US$4.7 billion worth of semiconductors this year, up 20.1 percent from US$3.9 billion last year, according to iSuppli's projections.

About 75 percent of Asustek's total chip spending this year will go to computing-related chips as well, Moon said.

In terms of growth rate, Wistron is forecast to top the list, with its chip spending rising 89 percent to US$2.25 billion from US$1.98 billion last year.

Of the total, more than 75 percent will be spent on notebook PC chips, it said.

At the same time, the company "evidently is also increasing chip spending in the consumer segment due to its expanding liquid-crystal-display TV business," the report added.

Inventec Appliances will see its semiconductor spending surge 49 percent to US$1.8 billion this year, mainly owing to big orders from Apple Computer Inc for its iPod MP3 music players, the report said.

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