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In Asia-Pacific, Local OEMs Are Biggest Buyers

Apple Inc. is the biggest semiconductor buyer in the world, but in Asia-Pacific, local OEMs are outspending the multinationals in chip purchases, says market research firm IHS. This year, local OEMs in Asia-Pacific will drive a 6 percent growth rate in semiconductor spending in the region, compared with the rest of the world’s 2.5 percent growth.

Among the Top 10 OEMs headquartered in Asia-Pacific, Taiwan’s HTC Corp. will lead the chip-spending growth spree this year at 23 percent, according to a recent report. Of all OEMs buying in the region, local companies still top the list, with ZTE Corp. of China; HTC; and TCL Corp., respectively, setting the pace:

    “Local companies have led, are leading and will lead the Asia-Pacific region in semiconductor spending growth — not the larger OEMs headquartered elsewhere, such as Apple, Hewlett-Packard Co. and Dell Inc.,” said Myson Robles-Bruce, senior analyst for semiconductor spending and design activity at IHS. “This is critical given the Asia-Pacific is the largest global region for chip purchasing — and is set to outperform the rest of the world in coming years. Apple is leading the Top 10 in growth and size worldwide during 2012 and 2013, giving it enormous advantages in terms of component supply and pricing. However, the Asia-Pacific players are playing to their home-field advantage, wielding in Asia the same kind of influence that Apple now enjoys globally.”

Although smartphone vendors ZTE and HTC trail market leaders Samsung, Apple, and Nokia worldwide, they are effectively competing in their domestic market, reports IHS. In China, ZTE has been able to match Apple’s market share. HTC has been suffering globally but still plans to fuel local chip purchasing by releasing new smartphones. TCL recently reported that its handset sales for the Chinese domestic market were up by more than 200 percent year over year, according to IHS:

    Most of this new growth was driven by the release of five new smartphone models this year. Also for 2012, the company has brought to the China market a new 7-inch tablet called the T50. TCL has publicly stated its goal of raising revenue by 30 percent for this year, a feat which will be based in part upon greater spending on semiconductors.

Local companies have outpaced chip spending in Asia-Pacific for a number of years, according to the research firm. The forecast for 2013 shows that trend will continue.

10 comments on “In Asia-Pacific, Local OEMs Are Biggest Buyers

  1. SP
    August 21, 2012

    Here in India all we see is Samsung. Their marketing strategy is really strong. Recently HTC is also coming up. Havent come across many ZTE phones.  I guess its a very tough market.

  2. Daniel
    August 21, 2012

    “Although smartphone vendors ZTE and HTC trail market leaders Samsung, Apple, and Nokia worldwide, they are effectively competing in their domestic market, reports IHS”

    Barbra, how Nokia comes to the picture: Its surprise to know that eventhough Nokia is losing their market share and sales quarter after quarter, they are still buying large source of components from the market. Nokia has any plan for new models or expansion.

  3. Houngbo_Hospice
    August 21, 2012

    @SP,

    Here in India all we see is Samsung.

    That is a surprise to me. What about Nokia, RIM and Apple? I thought that Nokia's products are more used in emerging countries and that is where they make most of their money.

  4. mfbertozzi
    August 21, 2012

    @H_H: well, it is a good question from you and also from my side I was wondering what about Nokia or RIM in that region; hence, I have experienced they are products typically for Western Market; not to say I am right, I have only reported my personal experience.

  5. Wale Bakare
    August 21, 2012

    I think, ZTE business strategy is similar to that of Huawei – focusing on enterprise sector. Both do share strenght in OEM for telecoms devices and equippment unlike in smartphone market. I also think, ZTE's nosy into smartpone market may not be too worrisome for the company, but i think it may continue operating just like Hauwei which competes with Ericsson nicely in Europe.

     

  6. Barbara Jorgensen
    August 21, 2012

    Hi Jacob: It seems Nokia has done a good job of developing and releasing feature phones, which are the most popular phone in China. I heard this from EETimes writer Junko Yoshida, who knows both China and Nokia pretty well. So even though they are floundering elsewhere, Nokia still has enough market to show up on the radar.

  7. SP
    August 22, 2012

    Hi Hospice,

    I was referring to smartphones. But I agree Nokia has a strong market too here. Almost everyone has Nokia phones (Android or simple ones). They are very user friendly. I personally like Motorola droid Razor. RIM also is also quite popular with business people.

     

  8. elctrnx_lyf
    August 22, 2012

    The semiconductor spendings from Asian oem companies is on rise due to more local companies increase their production of smartphones and tablets. I believe soon companies like Htc will increase their market share of smart phones in big way.

  9. Barbara Jorgensen
    August 22, 2012

    I would imagine IHS has data that matches the purchases made in Asia-Pac with the brand of semiconductors bought. I'll do some digging on that…

    What I wonder is, are local OEMs also buying local chips? Not those branded by EU and US companies, but from Asia-PAc-based vendors such as Samsung. Maybe not, since Intel and AMD still lead in processors. Any feedback, readers?

  10. Daniel
    August 23, 2012

    Good and its happy to know that something is there for the future. We know that, once they are the ruling king in mobile market and later lost their marker share due to various reasons. Still I believe that they can regain their market with innovative products and Smartphones with advance features.

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