Apple and Samsung Bought Up an Amazing $52.5 Billion Worth of Semiconductor Chips Sold in 2013

Apple and Samsung tower above all other OEMs with at least a billion dollars in revenue when it comes to buying up semiconductor chips. This has been the case for some years now, and the 2013 numbers certainly continues to showcase the two - the underlying point being that the two truly remain the giants in a game where all the players are giants in the own right. It wasn't even close between Apple, Samsung and the rest of the field.

Market details are provided in the latest IHS Technology market report, Wireless and Industrial Boost Semiconductor Spending. The IHS research tracks the semiconductor procurement of over 200 electronics companies.

Based on the numbers provided in the new report for 2013, it is safe to say that with the continuing rapid growth of the mobile device market and the ongoing competition to deliver the next superior device, these two will no doubt once again set records in 2014.

Between the two of them, Samsung and Apple were responsible for just about 14 percent of total semiconductor chip spending in 2013. It certainly isn't difficult to figure out who the rest of the top 10 on the list are, but it's hard to guess just how great the disparities are between the "bottom eight" and the top two. The following chart helps to put it all in perspective.

Hewlett-Packard sits in third place with $10.1 billion in spending, Lenovo is in fourth place with a $9.2 billion spend and Dell comes in fifth with $7.7 billion. In 2013 Apple spent roughly $7 billion more dollars as these three did combined. This is a clear sign of dominance - and looking at the 2012 numbers it also suggests continued growing dominance. Lenovo in the meantime is sneaking up on Hewlett-Packard and with its acquisition of IBM's low end server business earlier this week - combined with ongoing weakness in consumer-side PC buying - Lenovo will no doubt take over third place in 2014.

According to the IHS report the total served available market (SAM) for semiconductor spending for 2013 reached $237.2 billion. That is up nearly five percent after spending dropped overall from $231.7 billion in 2011 to $226.7 billion in 2012.

It is worth noting that the SAM metric counts only expenditures that vendor made as an external agent, which gives a truer picture of the state of chip spending in the electronics industry. This is because SAM does not factor in spending by manufacturers for chip buying done at their own internal divisions. This is especially the case with Samsung (thought there are others), who's own internal customers within the Samsung family of companies compete with external clients for Samsung-made semiconductors.

Over the next year we cannot rule out Samsung closing the gap that still exists between it and Apple per the chart above. Samsung will greatly increase its use of flexible active-matrix organic light-emitting diode (AMOLED) display technology with its upcoming new Galaxy smartphone, which will prove to be a differentiator when it appears in March or April. We're on record as suggesting that curved screen displays with multiple information streams from Samsung can in fact be a real, non-gimmicky differentiator for the company. This could turn the tide relative to devices sold, at least until Apple delivers its own next gen designs, which will likely deliver larger display sizes and elegant design.

Wireless Delivers the Big Numbers

It goes without saying that if Apple and Samsung rule the roost on semiconductor chip purchases, then it is a safe bet to make that the wireless market segment is the dominant segment for semiconductors. And sure enough, spending last year on semiconductors was strongest in the wireless segment among the seven different application categories that IHS tracks. These include wireless, computing platforms, consumer devices, industrial, automotive, wired communications and computer peripherals.

The wireless segment accounted for 31 percent of total OEM chip spending. Dollars spent on computer platforms came in a clearly distant number two at 22 percent. Consumer devices in general (non-mobile) were in third place at 16 percent. The top OEM buyers in the wireless segment were Apple, Samsung, Huawei, ZTE and LG. Of interest as well is that spending on tablets overtook that on wireless infrastructure for the first time.

Myson Robles-Bruce, senior analyst for semiconductor spend and design analysis at IHS notes that, "As in 2012, Apple and Samsung were the top semiconductor spenders in 2013 among original equipment manufacturers making more than $1 billion in revenue. Apple was again in first place with chip spending in 2013 of $30.3 billion, outspending runner-up Samsung’s $22.2 billion by more than $8 billion. However, Samsung attained the largest spending increase on chips of any Top 10 OEM last year, up almost 30 percent from 2012 levels, compared to a smaller expansion of 17 percent on the part of Apple."