Post a CommentLenovo Joins Top OEM Chip Buyers
Online staff -- Electronic News, 7/6/2005
Marking a milestone in China’s ascension in the global electronics industry, Lenovo Group this year enters the ranks of the world’s top OEM semiconductor buyers for the first time, according to the latest data from iSuppli Corp.
Lenovo is China’s leading PC maker, and is expected to emerge this year as the world’s ninth-largest OEM semiconductor buyer, with chip purchases amounting to $4.3 billion, the El Segundo, Calif.-based company reported. Lenovo’s semiconductor buying activities have been multiplied by its purchase of IBM’s PC operations, announced in December 2004, with PC purchasing activities being shifted to Lenovo this year.
Due to the addition of IBM’s PC business, Lenovo’s semiconductor purchases are expected to increase by more than a factor of four from about $1 billion in 2004, boosting its ranking from 36th place last year, iSuppli predicted.
With its move into the top 10, Lenovo will stand shoulder to shoulder with some of the world’s top technology companies, including number-one ranked Hewlett-Packard Co., second-placed Dell Inc. and number-three Nokia.
Such companies wield enormous power in the worldwide chip market, with their capability to obtain favorable terms from component makers, iSuppli reminded, and because of this, these companies can make or break products and suppliers in the semiconductor industry.
As China continues to advance in the worldwide electronics industry, iSuppli said it expects to see more of the nation’s companies enter the top chip-buying ranks.
On the opposite end of the spectrum, IBM is expected to fall from the ranks of the top-10 chip buyers this year, declining to 16th place, down from ninth place in 2004. With the sale of its high-volume PC business, IBM’s chip-purchasing activities have been significantly diminished.
While Lenovo and IBM are seeing rapid shifts in their rankings, HP and Dell are expected to retain their customary first- and second-place positions in terms of chip buying for the year.
iSuppli predicts HP’s semiconductor spending will rise to $13.7 billion, up 9.7 percent from $12.5 billion in 2004-the second-largest increase among the top-10 OEM chip buyers. Dell’s spending is predicted to rise to $12.5 billion, up 15.9 percent from $10.7 billion in 2004, marking the largest increase among the top 10.
Dell and HP are expected to exceed the industry average of a 6.8 percent increase in OEM chip purchasing this year.
Finally, besides Lenovo, other top-10 OEMs expected to grow their chip purchasing this year by a faster-than-average rate include Motorola Inc. and Samsung Electronics Co. Ltd., iSuppli concluded.
