Apple to Become World’s #2 Semiconductor Buyer in 2011

| Analysis

Apple is on pace to become the world’s second largest semiconductor buyer in 2011, just behind current #1 HP, and moving ahead of current #2 Samsung. This is the conclusion reached by research firm iSuppli, which said that Apple will spend some US$16.2 billion on semiconductors in 2011, while HP, the world’s largest PC manufacturer, will spend $17.1 billion, and Samsung, one of the world’s largest manufacturer of electronic components and devices, will spend some $13.1 billion.

The report looked at the semiconductor spending of the top 180 original equipment manufacturers (OEMs), the top 28 original design manufacturers (ODMs), and the top 10 electronics manufacturing services firms (EMS), and found that Apple has transformed into one of the world’s biggest consumers of chips and processors on the planet.

According to iSuppli, Apple will spend some $12.4 billion on semiconductors during calendar 2010, and that spending will leap to $16.2 billion in 2011. Apple’s 2010 expenditures are enough to currently occupy the #3 spot, just behind the $12.8 billion that Samsung will spend.

We’ll note that’s not bad for a company that the beleaguered PC maker Dell’s CEO, Michael Dell, once suggested close up shop, sell of its assets and give that money to its shareholders.

iSuppli Chart

Source: iSuppli

Apple uses a number of semiconductors in its products, everything from CPUs from Intel, to WiFi chips, various chips used for the cellular capabilities in its iPhone line, to GPUs, to power management chips, to…and the list is quite large.

Even with Apple’s own Apple A4 processor used in the iPad and iPhone, Apple outsources the manufacturing of the process to companies like Samsung. iSuppli counted the dollars spent in outsourcing that manufacturing as a purchase for Apple, while the design is handled mostly in-house.

While Apple remains an important, niche computer manufacturer, it’s clear that the company has become a powerhouse in the broader category of electronic device maker. The success of the iPod, iPhone, and iPad has been a large part of that transformation.

On a purely economic issue, Apple’s cumulative buying power means that Apple can squeeze its suppliers for the best prices and lock up important supply for components that are in more limited availabilities. This power also translates into Apple being even more capable of getting their way when it comes to the future direction of some components.

Lastly, it doesn’t take a huge leap of logic to project that Apple could easily surpass HP to become the world’s largest semiconductor consumer if the Mac platform continues to grow (17 quarters in a row of outgrowing the PC market as a whole), and the iPad and iPhone continue their phenomenal successes.

Comments

mhikl

How do you like them Apples, Bill ‘n Michael! Of course, unlike I, Steve’s too much the gent to think such a though. Not!

Ha ha!

singer

“niche computer manufacturer”  LOL Mac growth + iPad growth > WinPC + Netbook!

Log-in to comment