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(December 18, 2006) EL SEGUNDO, Calif. — China's top 60 OEMs are expected to average revenue-growth at 13% in 2006, lower than the 34% experienced in 2005, due to a slowing market of international mergers and acquisitions. Domestic mergers and acquisitions will occur more frequently in the future, according to the "Market Watch: China" report by Byron Wu of iSuppli Corp.
The research firm estimates that 23% of China's total electronics-production revenue in 2005 came from domestic OEMs. Foreign multinational OEMs accounted for about 41%. Total multinational OEM revenue declined in percentage of overall manufacturing, reaching 41% in 2005. iSuppli estimates that the portion will be 32% in 2010. China's electronics OEM (EOEM) factories are expected to increase revenues, generating 27% of total production in 2010 — up from 23% in '05.
Wu observes that about 12 Chinese OEMs are leaving low-price business for high-tech product markets. OEMs in emerging markets, such as automotive electronics, will need to monitor demand closely to gauge growth potential in the region.
In semiconductor-consumption trends, iSuppli found that OEMs consume 17% of the total ($10B) semiconductors in China. Wu notes that computer-industry OEMs generate large consumption volumes, but purchase fewer semiconductors. This results from OEMs buying subsystems and finished assemblies from Taiwanese original design manufacturers (ODMs). Those OEMs producing white goods purchase fewer chips due to lower semiconductor quantities in their products. The largest semiconductor buyers are telecom-equipment and mobile-handset manufacturers.
iSuppli lists the top China OEMs as, in order, Lenovo, Huawei, TCL, Haier, ZTE, Hisense, Gree, Midea, Changhong, and Skyworth.
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