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Apple tops 2011 chip buyer list

Posted: 26 Jan 2012 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor chips? smartphone market? design TAM?

The on-going success of Apple Inc.'s iPhones, iPads and MacBook Air has driven the company to be the leading customer of semiconductor chip vendors in 2011. Apple bought $17 billion worth of chips and accounted for 5.7 percent of chips purchased on a design total available market (TAM) basis, according to market research firm Gartner Inc.

According to Gartner, Apple ascended to the No. 1 position from the No. 3 ranking in 2010, leapfrogging Hewlett-Packard Co. and Samsung Electronics Co. Ltd. IHS iSuppli, a competitor to Gartner, rated Apple as the top chip buyer in 2010 based on straight sales.

Gartner said leading electronic equipment manufacturers accounted for $105.6 billion of semiconductors on a design TAM basis in 2011, accounting for 35 percent of semiconductor vendors' worldwide chip revenue, up 1.8 percent from 2010.

Design TAM represents the total silicon content in all products designed by a certain electronic equipment manufacturer or in a certain region, as opposed to purchasing TAM, which represents the total silicon content purchased directly by a certain electronic equipment manufacturer or in a certain region, Gartner said.

"The major growth drivers in 2011 were smartphones, media tablets and solid-state drives," said Masatsune Yamaji, principal research analyst at Gartner, in a statement. "Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand."

Within the top 10 rankings, three companies were from the Americas, three from the Asia-Pacific region, three from Japan and one from Europe, Gartner said.

Semiconductor design TAM

Top 10 semiconductor design TAM by company, worldwide 2011 (in millions of dollars).
TAM = total available market
Source: Gartner (January 2012)

DRAM prices fell dramatically in 2011, resulting in many PC vendors decreasing their total semiconductor demand, Gartner said. But the success of the MacBook Air enabled Apple to increase semiconductor chip demand even in its PC business, according to Gartner.

Yamaji said that as more brand-name companies increase their production outsourcing to original design manufacturers (ODMs) and electronics manufacturing services (EMS) providers, semiconductor procurement by ODMs and EMS providers are increased year to year.

"Semiconductor chip vendors must pay attention not just to the design TAM and purchasing TAM by company, but also by region," said Mr. Yamaji. "This is the key to avoiding inappropriate sales resource allocation. They must keep an eye on design-win opportunities in the U.S., while also establishing a strong distribution network in China."

- Dylan McGrath
??EE Times

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