China to be largest consumer of chips by 2014

China will lead the world in chip consumption thanks to strong internal demand

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 have driven demand for hardware and services.

The industry is also having to deal with different sales strategies for these new markets that do not 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, told V3.co.uk.

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

China, Brazil and Russia are strong growth markets, seeing high consumption and strong levels of investment.

The Chinese government is rolling out major infrastructure spending westwards away from the coastal zone, Kilroy said, and the Russian government is also spending heavily.

For example, after the last terrorist bombings in Russia, the government installed 200,000 cameras in the subway system.

Every eight cameras link to an Xeon server, and each camera captures around 2TB of data a month that needs to be stored and analysed.

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

Kilroy explained that the first computer purchase in a developing market is usually a desktop PC. This is partly because they tend 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 per cent worldwide. But enterprise sales fell dramatically last year.

"Clearly enterprise was dormant in 2009, but in 2010 we have been seeing businesses come back since the end of the fourth quarter," Kilroy said. "It's beginning to come back. It's not a hug snap back, but a healthy recovery."