EL SEGUNDO, CA — The U.S. in 2006 is expected to maintain its lead in the worldwide electronics equipment design with the nation’s activities in this area driving the most semiconductor purchasing of any country, according to new data from iSuppli Corp. However, China’s rapid growth in electronic-design-generated semiconductor purchasing activity is continuing and the country is closing the gap, the research firm said.

“Design of electronic goods leads directly to equipment production, which in turn drives semiconductor purchasing. Companies that engage in design of electronic equipment, such as PCs, mobile phones and televisions, also are responsible for specifying the use of particular chips in the products being developed,” said Min-Sun Moon, OEM spend analyst for iSuppli. “Thus, these companies and the nations where they operate have a major influence on global semiconductor spending.”

Electronic system design in the U.S. is expected to drive 34.9% of global semiconductor purchasing in 2006, amounting to $62.1 billion worth of chip sales for the year. This represents a 6.6% increase from $58.3 billion in 2005.

“The fact the United States is the largest nation for electronic design contrasts sharply with the country’s propensity to outsource actual manufacturing to other countries,” Moon said.

“While actual production of electronic equipment is decreasing in the United States, the nation’s design activity that drives semiconductor spending is on the rise. However, as a percentage of worldwide semiconductor spending, the United States’ design-inspired chip purchasing will actually decline slightly in 2006, decreasing from 35.2% in 2005.”

Japan is expected to maintain its second-place ranking in 2006, with its design activity generating 24.9% of worldwide chip sales, followed by Taiwan at 8.6%.

Of the ten largest nations, China/Hong Kong is growing the fastest, at 26.1%. Electronic design activities in the region will influence 6.5% of worldwide semiconductor purchasing in 2006, compared to 5.6% in 2005. This will cause China/Hong Kong to surpass Germany and South Korea to become the world’s fourth-largest national influencer of electronic-design generated semiconductor spending in 2006.

China/Hong Kong’s advance is being driven by its extensive work in the computer design area. Furthermore, companies increasingly are moving operations out of Western Europe and into China, boosting the nation’s activities in this area.

While China/Hong Kong in 2006 is expected to post the largest increase in design-driven semiconductor spending among the Top 10 nations that conduct these activities, India will lead all countries. India’s electronic-design influence on semiconductor spending will surge by 76% in 2006, handily beating other fast-growing nations like Poland and Slovakia, which are expected to see increases of 60% and 53%, respectively.

India’s electronic system design work tends to be focused on wireless products.