Following a weak market in 2009, the semiconductor industry will be the beneficiary of double-digit spending gains this year, says new research unveiled Thursday by iSuppli.
Original equipment manufacturers (OEMs) are expected to boost their chip spending 13 percent to $177.9 billion in 2010, while electronic manufacturing service (EMS) providers will spend $37.7 billion this year, a gain of 15.1 percent from 2009.
Among OEMs, Hewlett-Packard will be the top spender on semiconductors this year, says iSuppli, paying around $12.6 billion for its stock of chips. In second place will be Samsung Electronics, spending $12.5 billion, followed by Nokia and then Apple.
In 2011, Samsung is likely to take the lead in spending as it unveils a host of new products ranging from wireless handsets to. And bumping Nokia for the No. 3 spot next year will be , which has boosted its chip spending since the debut of the iPhone in 2007.
EMS providers, which make electronic components for OEMs, survived a tough 2009 as customer orders plummeted. But as demand rises this year, the EMS market is expected to stage a quick rebound. OEMs are also expected to begin outsourcing other products beyond just computers and mobile phones, providing additional revenue to EMS companies.
Foxconn, whose iPad, will spend $22.6 billion on semiconductors this year, a rise of 18.7 percent from 2009, says iSuppli. The company also supplies components for the iPod, the Nintendo Wii, Sony's PlayStation 3, and a variety of Hewlett-Packard products.used in Apple's new
Following Foxconn will be Flextronics in second place, likely to spend $7 billion on chips in 2010, notes iSuppli. With increased business from Sony Ericsson, HP, and Research In Motion, Flextronics is also expected to expand its manufacturing plants in China.