Samsung, Apple still world's biggest chip buyers

The two smartphone makers accounted for 18.2 percent of global market, spending US$61.7 billion on semiconductors last year, with Samsung leading the market as top design total available market company.
Written by Eileen Yu, Senior Contributing Editor

Samsung Electronics and Apple contributed 18.2 percent to the global semiconductor in 2016, spending US$61.7 billion.

The smartphone makers had spent US$61.3 billion the previous year and occupied the top two positions for six consecutive years, according to figures from Gartner. Positions were swopped, though, with Samsung assuming the pole position while Apple fell to second.

Spending US$31.67 billion last year, Samsung grew its semiconductor design total available market (TAM) with a 9.3 percent share. The iPhone maker spent 2.9 percent less at US$29.99 billion, on decreased design TAM for the first time since Gartner began tracking the market in 2007. Its market share dropped to 8.8 percent, the research firm said, noting that Apple's iPad tablet did not sell well last year and it also lost share in the PC market.

Gartner's principal research analyst, Masatsume Yamaji, noted: "While both [Samsung and Apple] continue to exert considerable influence on technology and price trends for the wider semiconductor industry, their impact has lessened due to falling expectations for future growth."

Most of the top 10 companies in 2015 remained on last year's top 10 list, with the exception of Cisco Systems, which dropped out and was replaced by Chinese smartphone OEM, BBK Electronics.

Among the top 10 global chip buyers in 2016 were Dell, Lenovo, Huawei, and LG Electronics.

Yamaji said: "Even though the influence on the semiconductor industry of the top two strongest OEMs is weakening, the combined design TAM of the top 10 companies outperformed the average growth rate of the total semiconductor market in 2016.

"However, semiconductor chip vendors can no longer secure their businesses by relying on a few strong customers because market share changes much faster these days," he said. "BBK Electronics grew very fast in 2016 and increased its design TAM, but this extraordinarily fast growth also underlines how volatile the businesses in China can be."

The Gartner analyst underscored the need for market players to diversify their clientele to remain competitive.

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