While electronics manufacturing has largely migrated to Asia, the United States remains the center of global electronics design activity. This gives the U.S. enormous influence over the global semiconductor supply chain.
Design of electronic goods leads directly to equipment production, which in turn drives semiconductor consumption. Companies that design electronic equipment also specify the use of particular chips in the products being developed. So, these companies and the nations where they operate have a huge influence on semiconductor spending.
Electronic system design in the U.S. is expected to drive 33.5% of global semiconductor purchasing in 2005, amounting to $58.7 billion worth of chip sales for the year, according to iSuppli's Design Influence Tool (DIT). Japan will come in second, with its design activity generating 26.1% of worldwide chip sales, followed by Taiwan at 9.9%, Germany at 5.8%, China/Hong Kong at 5.4%, and South Korea at 5.3%.
The fact that the U.S. is the largest nation for electronic design contrasts sharply with its propensity to outsource manufacturing to other regions. While actual production of electronic equipment is decreasing in the U.S., the influence of the nation's design activity is on the rise.
Design activity in the U.S. will drive more than 40.2% of the growth in semiconductor sales in 2005, according to the DIT. This is by far the largest growth among the top 10 design nations. Japan will be second, at 15.5%, followed closely by China/Hong Kong at 14.8%, and then Taiwan at 10.1%.
Relatively strong shipment growth in 2005 industrial and automotive equipment is aiding the U.S. design industry, although the nation has robust activity in all application markets, including consumer electronics and computers.