Local OEMs to drive chip spending in APAC region

CALIFORNIA, USA: According to market research firm, IHS iSuppli, original equipment manufacturers (OEMs) based in the Asia-Pacific region are increasing chip spending in the area at a faster rate and the semiconductor spending among OEMs headquartered in the Asia Pacific region is expected to rise by an average of 6 per cent in 2012.

The market research firm has also estimated that, Apple will post the second-highest growth among the Top 10 biggest chip-buying OEMs in the Asia-Pacific region in 2012, at 15 per cent. Companies like Taiwan's HTC and China's ZTE and TCL will be the fastest growing companies in the region.

"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 and Dell. 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,'' said Myson Robles-Bruce, senior analyst, semiconductor spending and design activity, IHS.

IHS estimates that chip spending in the Asia Pacific region will increase by 9.4 per cent in 2013 but if the local companies headquartered in the region will be considered, the growth rate will become higher, increasing to 15.5 per cent for the year.

"The phenomenon of domestic OEMs increasing their Asia-Pacific chip spending at a faster rate than their global rivals represents a consistent long-term trend. This trend has persisted regardless of whether overall growth rates for Asia Pacific semiconductor spending have increased or decreased,” says IHS.

ZTE is expected to show the highest growth in Asia-Pacific chip spending at 26 per cent, followed by HTC at 23 per cent and TCL at 22 per cent in 2012. After Samsung, Apple, and Nokia, both and HTC are considered among the top smartphone vendors across the world. Both the companies have a combined share of slightly more than 10 per cent.

ZTE that has been very competent in the Chinese domestic smartphone market has declared its plans to double its smartphone shipments for this year by dramatically increasing sales to the U.S. and Chinese markets.

Though HTC has not yet achieved the branding it needs in order to reach greater success, the company continues to press forward with plans to challenge the market leaders with newer products like the HTC One X, as well as the upcoming Rio, Accord, and Zenith Windows phones.

TCL had released five new smartphones this year and the company had recently reported that its handset sales for the Chinese domestic market were up by more than 200 per cent year over year. TCL has also claimed that it aims at raising revenue by 30 per cent for this year.