Hewlett-Packard remained the world's leading OEM buyer of semiconductors in 2003, according to the latest findings from iSuppli Corp.'s OEM Semiconductor Spending Analysis service.

As it did in 2002, Hewlett-Packard led the list of OEM semiconductor buyers in 2003 with $9.8 billion in purchases. Dell followed with $8.4 billion in chip spending.

Among the Top 10 OEMs, the companies that increased their semiconductor spending by the highest percentages were Hitachi, Nokia, Samsung, Dell, Hewlett Packard and Motorola. They all boosted their chip purchases by double-digit percentages. The only company among the Top 10 to decrease its semiconductor spending in 2003 was Siemens, with a 0.6 % decline.

Dell and Hewlett-Packard both benefited from increased spending by businesses and consumers on PCs, a trend that boosted their production and sent their semiconductor purchasing in 2003 up by 21.1% and 11.9% respectively.

An increase in sales and production of mobile handsets in the fourth quarter increased spending at Nokia, Samsung and Motorola with their semiconductor buying jumping by 23.7%, 21.4% and 10.8% respectively for the year.

However, Hitachi led the pack among the Top 10, as the recovery of Japan's economy and electronics industry contributed to a 27.1% increase in the company's chip purchases.

The Top 10 spenders accounted for 34.4% of all OEM semiconductor purchases in 2003. The next 10 largest purchasers bought 11.7% of all chips, with the following 80 spenders taking 25.5% and the remaining buyers accounting for 28.3%.

Among all OEM spenders the biggest increases were made by Eastman Kodak with a 153% increase, and SanDisk, up 99%. Big spending increases also were made by Chinese communications equipment makers ZTE and Huawei, with 98% and 73% hikes respectively. TCL, a Chinese maker of televisions and other products, rounded out the top five list of companies that increased their semiconductor purchasing in 2003, with its chip spending rising by 58% for the year.

Asia/Pacific remained the top destination for semiconductor shipments in 2004, with 40.4% of all chips going to the region, up from 36.9% in 2002. The continued rise of electronics production in China was the primary factor behind the considerable increase in shipments to the region.

Shipments to the Americas and to the Europe, Middle East and Africa (EMEA) region declined in 2003. However, shipments to Japan rose by one percentage point, pushing the country past the Americas and making it the world's second biggest destination for semiconductors.

In the networking market, Cisco Systems was the top purchaser of semiconductors among all networking and optical equipment OEMs. Cisco dominated chip purchasing in the networking market with $1.8 billion in spending in 2003, more than twice the level of the number-two Alcatel.

The top 15 networking equipment OEMs together accounted for one half of all semiconductor spending in the networking and optical market in 2003. The top 50 OEMs consumed nearly 70% of the total semiconductors sold into that market.

Although wired-communications OEMs in China such as Huawei have not yet attained the level of semiconductor purchasing that their competitors in the other regions have, these companies have strong growth potential.

Semiconductor companies looking to supply the wired-communications market will push to establish strong design-in capabilities in China, according to iSuppli.