Apple is biggest IC buyer

El Segundo, Calif. — Thanks to demand for the iPhone and iPad, Apple Inc. has become the largest buyer of semiconductors among original equipment manufacturers (OEMs) in 2010 for the first time, according to a new report from IHS iSuppli.

Apple purchased $17.5 billion worth of semiconductors in 2010, a 79.6 percent increase from $9.7 billion in 2009, according to IHS. This is the highest rate of increase among the world’s Top 10 OEM semiconductor buyers, driving Apple up two positions to the number 1 rank in 2010. Apple is followed by Hewlett-Packard Co., ranked at number 2, and Samsung Electronics Co. Ltd., ranked at number 3.

“Apple’s surge to leadership in semiconductor spending in 2010 was driven by the overwhelming success of its wireless products, namely the iPhone and the iPad,” said Wenlie Ye, analyst for IHS, in a statement. “These products consume enormous quantities of NAND flash memory, which is also found in the Apple iPod. Because of this, Apple in 2010 was the world’s No. 1 purchaser of NAND flash.”
IHS indicates that Apple will likely continue to increase its semiconductor spending over the next year, which will extend its lead over HP, Samsung and other OEMs in 2011. The report forecasts that Apple’s semiconductor spending will exceed Hewlett-Packard by $7.5 billion, up from $2.4 billion in 2010.

The key reason is product portfolio. Apple spent approximately 61 percent of its semiconductor budget in 2010 on wireless products, while 82 percent of Hewlett-Packard’s 2010 semiconductor spending was dedicated to computer products like desktops, notebooks and servers, said IHS.

Tale of the tape: In 2010, smart phone shipments rose 62 percent, while the tablet market climbed by more than 900 percent driven by the introduction of Apple’s iPad, reported IHS. In comparison, global PC shipments grew only 14.2 percent in 2010.