China to be largest consumer of chips by 2014

China will unseat the US to become the world's largest consumer of chips by 2014, according to Intel.

While much of the world has been languishing in recession, sales in countries like China, Brazil and Russia are driving demand for both hardware and also also for services. The industry is also having to deal with different sales strategies for these new markets that don't reflect traditional buying patterns.

“By 2014 China's consumption of chips will outpace the US,” Tom Kilroy, general manager of Intel's sales and marketing group said.

“Brazil will jump to the number three consumer, leapfrogging France and Germany, and that'll happen in this year in my opinion, or definitely by 2011.”

China, Brazil and Russia are strong growth markets, with high consumption and levels of investment. The Chinese government is rolling out massive infrastructure spending westwards away from the coastal zone he said, and the Russian government was also spending heavily.

For example, after the last terrorist bombings in Russia the government installed 200,000 cameras in the subway system, with every eight cameras linked to a Xeon server. Each camera stores around 2TB of data a month and that needs to be stored and analysed, involving more spending.

Brazil is benefiting from a widescale broadband deployment and by 2014 the country will average more than one PC per household according to Intel's data.

In the developing markets the first computer purchase is usually a desktop PC Kilroy said. In part this was because they tended to be family systems but also because, given the size of the investment for most people, buyers like a large system to make an impression.

Overall consumer demand for computers has remained solid even through the recession, rising 19 percent worldwide but enterprise sales fell dramatically last year.

“Clearly enterprise was dormant in 2009 but in 2010 we've been seeing businesses come back since end of the fourth quarter,” Kilroy said.

“It's beginning to come back, it's not a hug snap back but a healthy recovery.”