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© Infineon (For illustration purposes only!) Electronics Production | June 09, 2011

Apple heads OEM chip buyers in 2010

Spurred by booming demand for the iPhone and iPad, Apple in 2010 became the largest buyer of semiconductors among original equipment manufacturers (OEMs) for the first time ever, reports IHS iSuppli.
Apple in 2010 bought USD 17.5 billion worth of semiconductors, a 79.6% increase from USD 9.7 billion in 2009. This represented the highest rate of increase among the world’s Top10 OEM semiconductor buyers, allowing Apple to rise up two positions to take the No. 1 rank in 2010. Apple in 2009 was the third-largest semiconductor purchaser, behind Hewlett-Packard Co. of the United States and Samsung Electronics Co. Ltd. of South Korea; it was sixth in 2008.

Apple is likely to continue increasing its semiconductor spending during the coming years at an above-average pace, allowing the company to extend its lead over Hewlett-Packard, Samsung and other OEMs in 2011 and beyond. In 2011 Apple’s semiconductor spending is expected to exceed that of Hewlett-Packard by USD 7.5 billion, up from USD 2.4 billion in 2010.

© IHS iSuppli

Apple vs. Hewlett-Packard

Although Apple and Hewlett-Packard have been rivals in the computer space for many years, an examination of their respective semiconductor expenditures shows that the two companies are fundamentally different.

Apple is more a wireless devices maker than a computer maker. The company spent approximately 61% of its semiconductor budget in 2010 on wireless products such as iPhones and iPads. In contrast, 82% of Hewlett-Packard’s 2010 semiconductor spending was dedicated to computer products like desktops, notebooks and servers.

This worked to Apple’s benefit, with the smart phone and tablet markets massively outgrowing the computer segment in 2010. Smart phone shipments in 2010 rose 62%, while tablets exploded by more than 900%, driven by the introduction of Apple’s iPad.

In contrast, global PC shipments grew a relatively weak 14.2% in 2010.

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