SAN FRANCISCO—Apple Inc. is expected to buy nearly $28 billion worth of semiconductors in 2012, up 15 percent from the $24 billion it spent on chips in 2011, according to market research firm IHS iSuppli.
According to IHS, Apple is increasing semiconductor spending at a faster rate than other top chip buyers, increasing its dominance over the market, according to IHS. Apple is expected to lengthen its lead in chip spending over No. 2 chip buy Samsung Electronics Co. Ltd., which is expected to spend about $14.9 billion on chips this year, up from $14.8 billion last year, according to IHS.
Apple is maintaining its lead in semiconductor purchasing because of continuing strong demand for its products, combined with the company’s capability to maintain beneficial relationships with more than 150 suppliers that provide components or offer manufacturing and assembly services, IHS said.
Apple is also outgrowing the other OEMs and making gains in the various regions of the world, giving Apple competitive advantages when it comes to manufacturing electronic products, IHS said.
"It’s well known that Apple has already conquered the smartphone and tablet segments—but behind the scenes the company is engaging in another kind of conquest: the dominance of the electronics supply chain," said Myson Robles-Bruce, senior analyst for semiconductor spending and design activity at IHS, in a statement.
Robles-Bruce said such a dominant position gives Apple increased ability to dictate semiconductor pricing, control product roadmaps and obtain guaranteed supply and delivery. "For Apple, these benefits translate into competitive advantages, letting it offer more advanced products at lower prices, faster and more reliably than the competition," Robles-Bruce said.
IHS has ranked Apple as the top chip buyer worldwide since 2010.
A detailed look at Apple's purchasing activities shows it is making gains against nearly all of its competitors and in almost all regions, IHS said. The company is expected to achieve the strongest growth in chip spending among the world's top 10 OEM chip buyers, IHS said. Apple is set to increase its chip buying nearly three times faster than the next-fastest growing buyer, Canon, which is expected to increase chip buying by 4.6 percent this year, IHS said.
Regionally, Apple is expected to grow faster than any other top chip buyer in the Americas and the Middle East/Africa, IHS said. The company is the top chip buyer in the Asia-Pacific region, now is the world’s dominant electronics producer, the second-largest buyer in the Americas and No. 6 in the Middle East/Africa, IHS said. Only in Japan is Apple not among the fastest-growing chip purchasers, IHS said.
Cisco Systems Inc. is expected to remain the top chip buyer in the Americas region in 2012, despite being expected to decrease chip buying by 5 percent in 2012, IHS said. Still, Cisco holds a more than $1 billion lead over Apple is U.S. chip purchasing, according to IHS.
Cisco leads Apple in the U.S. because it maintains a larger number of design centers there, according to IHS. The company also has higher spending on consumer electronics-related chips for set-top boxes, and it makes large semiconductor purchases in support of its business in wired communications equipment in the region, IHS said.
IHS expects Apple to further increase chip buying in 2013, with growth forecast of about 12 percent, again the highest rate of growth expected among top 10 OEM chip buyers, according to IHS.
"Apple will continue to outgrow the other major OEMs in chip purchasing because of its clear vision of the future, which extends a few years out," Robles-Bruce said. "This vision includes a strategy to not only update currently popular products but also achieve success in other areas of interest like the television segment.
Dylan : Apple's larger market share in chip purchase is not exactly news.
What could be news though is that this may not continue if Apple cannot get chips with the latest technology. When are you guys going to cover the technical aspects of the Apple - Samsung relationship and how that might affect major supplier patterns ?
Case in point, up to the iPad 3( Mar 2012 ) Apple has been forced to use Samsung's 40 nm non HKMG Fab technology. This has complicated the SoC to DRAM integration ( key to performance ) in the iPad 3 ( having to use older Fab technology for the quad GPU design in the A5X has ramped the heat generation to the extent that it has prevented tighter integration with memory - unlike in iPad 2 or iPhone 4s ). Yet just 2 months later Samsung brought out their new Galaxy S3 phone with a quad core processor built with their best technology ( 32 nm, HKMG ) runs faster ( 40 % higher clock ) yet cool and tightly coupled to the DRAM chips ( their own of course ) !
Seems to me that a pull in of 3 months for Apple would not have been such a big deal for Samsung which had switched back to gate last HKMG ( a la Intel, after getting misled by IBM into gate first HKMG ) way back in early 2010. Clearly Apple did not get the best Fab service from Samsung. So what are they going to do to make sure that they keep getting the best ? Perhaps second sources with no such conflict of interest ?
What is the scuttlebutt on what Apple is doing with alternative sources ? Now that would be a lot more interesting topic than just tired old sales figures.
We've heard about the TV strategy of Apple for some while but we still didn't see any new stuff yet. How long should we wait? TV is a piece of cake for Samsung and Japanese, how can Apple kick their ass? I guess Apple won't be willing to sit at the forth or even lower position in this market.
January 2016 Cartoon Caption ContestBob's punishment for missing his deadline was to be tied to his chair tantalizingly close to a disconnected cable, with one hand superglued to his desk and another to his chin, while the pages from his wall calendar were slowly torn away.122 comments