Americas region remains leader in industrial chip purchases, emerging countries gain ground

Led by the U.S., OEMs in the Americas region accounted for 36.3% of global spending on industrial semiconductors in 2012, according to a report from IHS Inc.


Global OEM spending forecast on industrial semiconductors by region. Source: IHS Inc., November 2013Despite years of outsourcing and offshoring, the Americas region continues to lead the world in terms of spending on semiconductors for industrial electronics, although emerging economies are gaining share.

Led by the U.S., original equipment manufacturers (OEMs) in the Americas region accounted for 36.3% of global spending on industrial semiconductors in 2012, according to the Industrial Electronics Market Tracker report from IHS Inc. By 2017, the region’s share will decline by nearly one percentage point to 35.5%, as presented in the attached figure. Despite the decrease, the region will continue to lead the world in industrial semiconductor purchases.

Other established regions—Europe-Middle East-Africa (EMEA) and Japan—also are expected to see their share decline.

Meanwhile, China, including the Hong Kong region, will emerge as a powerful new force by enlarging its portion of the OEM spend market to 15.7%, up from 12.9%, or a gain of 2.8 percentage points. The rest of Asia-Pacific excluding China and Japan will also enjoy good growth, expanding its market allocation to 11.3%, up from 9.4%, or an increase of 1.9 percentage points.

“Although China has surpassed the United States as the world’s largest manufacturing country, the U.S. continues to lead in advanced production technologies,” said Robbie Galoso, principal analyst, electronics, for IHS. “Because of this, the Americas region continues to lead in the purchase of semiconductors used for industrial applications. However, as manufacturing technology advances in emerging regions, chip spending is shifting away from traditional strongholds with mature economies.”

The semiconductors covered by the industrial electronics space encompass a broad range of markets. They include including building and home control, energy generation and distribution, manufacturing and process automation, medical electronics, military and civil aerospace, and test and measurement.

Made in the USA

Looking specifically at the U.S., the country continued to be the No.1 purchaser of industrial chips among all countries, with a 31.6% share of shipments in 2012. However, the U.S. share in 2012 was down one-tenth of a percentage point from 31.7% in 2011.

Among the world’s top brands that make the U.S. their home are General Electric in lighting and metering, Honeywell in building and home control, Halliburton in energy, Johnson & Johnson in medical, Boeing and Raytheon in aerospace, and Agilent in test and measurement.

For its part, the EMEA region—powered by Europe as the principal player in the triumvirate—will see its share decline to 29.3%, down from 30.4% or a contraction of 1.1 percentage points. Japan will suffer the largest decrease in OEM spend market share, falling to 8.2%, down from 11.0%, or a 2.8 percentage point decrease.

China’s chips

When ranking individual nations, China was the world’s second-largest purchaser in 2012. Among the brands based in China with major spending power on industrial chips are Dahua, Ningbo Water Meter and Midea. Also, several global brands have significant design locations in China, including Siemens and ABB in manufacturing and process automation, as well as GE Healthcare in medical electronics.

Japan continues to be the third power of note in the market, even though its portion of OEM spending is down from 11.5%. Notable industrial OEMs based in Japan include Panasonic, Mitsubishi, Toshiba and Hitachi.

At No. 4 among the world’s major industrial chip buyers was Germany with a 9.7% market share, up from 9.6%.

Germany is home to leading OEMs like Bosch, Thyssenkrup, Osram, Siemens and Hauser.

In fifth place is France with 5.7% share, down from 6.0%. Major industrial-based French OEMs include Schneider Electric, Thales, Alstom and pan-European aircraft manufacturer EADS.

Rounding out the Top 10 in the 2012 rankings were Switzerland in sixth place, Taiwan in seventh, India in eighth, Canada in ninth and South Korea in 10th. Sitting just below the Top 10, in 11th place, was the United Kingdom.

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