Apple Is World’s Largest Buyer of Semiconductors

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In 2010, Apple became the world’s largest purchaser of semiconductors, eclipsing HP, Samsung, Dell, Nokia, Sony…and every other tech giant on the planet. In a report released Wednesday, IHS iSuppli said that Apple’s chip consumption grew 79.6% during 2010 compared to 2009, pushing Apple two spots up the rung, and that 2011’s chip needs are even larger.

According to the report, Apple bought US$17.5 billion worth of semiconductors in 2010, 79.6% up over the prior year. Much of the growth was driven by demand for iPhone and iPad, though we’ll also note that Mac sales saw double digit growth throughout the year, as well.

iSuppli Chart

Chart by The Mac Observer, data from IHS iSuppli, June 2011

“Apple’s surge to leadership in semiconductor spending in 2010 was driven by the overwhelming success of its wireless products, namely the iPhone and the iPad,” Wenlie Ye, Analyst for IHS, said in a statement. “These products consume enormous quantities of NAND flash memory, which is also found in the Apple iPod. Because of this, Apple in 2010 was the world’s No. 1 purchaser of NAND flash.”

The firm also projected that Apple’s chip needs would continue to outgrow the market as a whole “in the coming years.” In 2011, IHS iSuppli projects that Apple will spend $22.4 billion on semiconductors, more than tripling its lead over HP from $2.4 billion to $7.5 billion year over year.

The report also delved into the nature of Apple’s and HP’s business. The company said that 61% of Apple’s semiconductor budget was for wireless devices (i.e. iPhone and iPad), while HP spent 82% of its own chip budget on more traditional computers (i.e. notebooks, laptops, servers).

Lo and behold, smartphone shipments for 2010 rose 62% and tablet shipments (i.e. iPad) rose 900%, while computer shipments rose all of 14.2%, meaning that Apple’s path was the smart money for growth.

The last thing we’ll note is that IHS iSuppli specifically touted the whole widget aspect of Apple’s ecosystem as a driving factor in its rising sales. “Every Apple product is connected through iTunes/iOS and is synergetic with all other Apple products,” the company wrote. “As a result, committed users of the Apple ecosystem derive more value from each additional Apple device they buy, and users have little interest in leaving the Apple realm.”

In comparison, the rest of the PC industry doesn’t bother with the notion of an ecosystem. According to the report, “A buyer that once purchased a Hewlett-Packard PC would just as likely purchase a Dell PC next if the price was better, given that there is little or no value in purchasing another Hewlett-Packard.”

Comments

wab95

Every Apple product is connected through iTunes/iOS and is synergetic with all other Apple products,?...In comparison, the rest of the PC industry doesn?t bother with the notion of an ecosystem

Which is why, although these graphs outwardly reflect the same thing, purchase of semiconductors over time by company, they also convey information about something else, namely the effect of corporate models on growth - not only who’s growing, but which ones are tapped into actively growing sectors - in this case ultraportable wireless devices.

Unless HP and Dell et al change their lineups, expect this graph to look similarly a year from now.

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