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Wireless ousts PCs as top OEM spending area

Posted: 03 Feb 2012 ?? ?Print Version ?Bookmark and Share

Keywords:wireless? computer? semiconductor spending? OEM?

Although this isn't the first year that wireless spending has been larger than for computerswith wireless having led as recently as 20092011 marked the start of a period when the balance of semiconductor spending shifted decisively toward wireless and away from computing. This is according to IHS Inc. that forecasted that by 2013, OEM wireless spending will top $72.9 billion, while computers will remain flat at $53.4 billion.

Driven by the market appeal of items such as the iPhone and iPad, the wireless communications sphere surpassed computers to lead all segments in semiconductor-related spending among the world's leading original equipment manufacturers (OEMs) in 2011, noted the market research firm. Global spending by the world's top OEMs on microchips for wireless products amounted to $58.6 billion last year, up 14.5 percent from $51.2 billion in 2010, added IHS.

OEM spending

Global Semiconductor Spending by Top OEMs for the Wireless and Computer Application Markets (Billions of U.S. Dollars).

"Among the 10 segments tracked for semiconductor spending, the biggest market shareat 24 percentbelonged to the wireless market, spurred by prodigious mobile handset and tablet sales exemplified by the runaway success of Apple's popular offerings," stated Wenlie Ye, analyst for semiconductor design and spend at IHS. "Wireless will continue to generate the most growth during the next two years. A substantial portion of the segment's increase will be due to rising tablet sales, although mobile handsets like smartphones will continue to account for the lion's share of semiconductor segment in the wireless area."

OEM spending

Global Semiconductor Spending by Top OEMs for the Wireless and Computer Application Markets (Billions of U.S. Dollars)

Meanwhile, computer semiconductor spending last year rose by just four percent to $53.7 billion, up from $51.8 billion in 2010. "The market for desktops and notebooks has stumbled in the shadow of smartphones and tablets, whose portability and computer-like features have usurped the position of the once-mighty PCs," Ye continued.

Capital spending for 4G/LTE to surge
IHS has recently released a report noting the shift toward 4G/LTE. The move toward the wireless standard by mobile carriers will drive global capital spending on the technology to almost $24.3 billion next year. This is a far cry from the $8.7 billion that is predicted to be spent on the 4G/LTE this year.

The research titled "Wireless Gaining Momentum at the Expense of Compute" revealed that total semiconductor spending among the industry's major OEMs for all application markets last year reached $240.6 billion, up about five percent from $230.1 billion in 2010. Although growth last year was much more modest after the massive 32 percent expansion of 2010, overall semiconductor spending levels rose for the second straight year, and there was no indication that the industry would retrench to the dark days of 2009 when spending contracted by a steep 13 percent.

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