Apple is the biggest chip buyer, and getting bigger

Apple buys about 50 per cent more memory, processors and other semiconductor products than its nearest rival, Samsung — which, by the way, isn't just a buyer, but also the second-biggest producer.

Apple dominates semiconductor spending, and will continue to next year, IHS iSuppli predicts.
(Credit: IHS)

The semiconductor industry produces all kinds of chips for memory, running software, communicating over networks and more. And Apple, by virtue of its booming iPhone and iPad business, is a voracious consumer, according to Dale Ford, head of IHS iSuppli's electronics and semiconductor research business. Samsung is in second place, and is also growing fast, he added, speaking at the analyst firm's Technology, Media and Telecommunications (TMT) Summit.

In 2009, Apple was one of the herd, spending about US$9 billion on semiconductors. This year, that figure should rise to a whopping US$27 billion. By 2013, Ford said, Apple will spend about US$29 billion.

Samsung, while still well ahead of its rivals, trails Apple considerably in its chip spending. Its purchases should rise from about US$10 billion in 2009 to US$18 billion in 2013, he said.

These two juggernauts are big enough to disrupt others' businesses, even if they're not competitors.

"Pretty much everybody has to take pretty conscious account of where Apple and where Samsung will be," Ford said of companies vying for the same components. "In industrial, automotive and every other sector, their reach, influence and size has been a significant change."

Last year was a tough one for the semiconductor industry because of Japan's earthquake and Thailand's flooding. Some in the industry were pleased at how well things worked out, all things considered. But Ford urged managers not to get complacent, because those disasters struck during seasonal lulls, and at a time when extra inventory was still moving through the pipeline.

"If either of those disasters had taken place in August, we would have experienced much greater pain," he said.

Intel is top dog when it comes to semiconductor sales, but it's weak in the mobile market.
(Credit: IHS)

Intel remains king of the heap in the semiconductor market, accounting for about 15 per cent of its revenue in the fourth quarter of 2011. Samsung, at about 9 per cent, was in second place, marking it a both a major supplier and a huge customer.

Intel, though, can't be complacent, Ford said — not with the mobile revolution sweeping across the computing industry, and Intel still largely absent. "Intel has no room to sit comfortably moving forward. They recognise the mobile trends," he said.

Sales in the overall semiconductor market were US$311 billion in 2011, and eventually should cross US$400 billion, Ford predicted. While that figure is a small fraction of the overall US$143 trillion world economy, semiconductors hold disproportionate influence.

There are many other sectors in the economy, and "in every one of these sectors we are a key enabler of success in the growth of the economy in our world today," Ford said.


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Im Batman posted a comment   

Do the buying stats inlude the internal "purchases" of their own chips.
i.e. Samsung makes a ton of chips for its own devices (while buying in others), are these reflected in the numbers??

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