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Semiconductor Value Chain

Chip Spending Returns to Growth as Apple and Samsung Battle for Lead

17 July 2013

After a flat year in 2012, global purchasing of semiconductors by the world’s top electronic brands is set to return to growth in 2013, as Apple Inc. and Samsung Electronics contend to claim the title of biggest spender.

The total available market, or TAM, for semiconductor spending by major original equipment manufacturers (OEM) in 2013 will rise to $265.2 billion this year, up 4.2 percent from $254.4 billion in 2012, according to Semiconductor Spend Analysis Market Tracker Report from IHS. Spending by year-end will be at its highest level in six years, with expenditures in 2014 forecast to make another modest jump to $279.4 billion.

The attached figure presents the IHS forecast of global semiconductor spending by OEMs with annual revenue of $1 billion or more. This top OEM semiconductor spending TAM represents about 83 percent of the total semiconductor market of $318.8 billion, as valued by the IHS Application Market Forecast Tool (AMFT).

If internal chip consumption within companies is excluded, the served available market for semiconductor spending, or SAM, will equate to an amount slightly lower than the TAM, at $241.3 billion in 2013.

As IHS projected in 2012, Apple is set to maintain leadership in the OEM semiconductor spending SAM in 2013. However, when also accounting for consumption of internally produced chips, Samsung will take the lead in terms of TAM this year.

“Depending on the metric used, either Samsung or Apple will be the top chip spender for 2013,” said Myson Robles-Bruce, senior analyst for semiconductor spend & design activity at IHS. “Either way, the honor does not merely signify bragging rights but also carries attendant overtones of prestige and influence, with the incumbent leader often tacitly acknowledged by all others as the industry’s top semiconductor spender.”

Other OEMs that make an appearance in both TAM and SAM lists—rankings vary depending on the roster—include Hewlett-Packard, Lenovo, Sony, Dell, Cisco Systems, Panasonic, Toshiba and Asustek Computer.

Wireless is king

Not surprisingly, the greatest share of spending this year will be in wireless communications, where Samsung and Apple lord over other players. Wireless alone is forecast to gobble up 26 percent—approximately $62 billion—of total top OEM semiconductor SAM. Wireless is also expected to be the highest growth market in 2013 after an annual projected expansion of 12.8 percent.

Within the wireless segment, handsets continue to be the single largest market, with OEM chip spending in 2013 expected to reach $46.7 billion. Media tablets are next at $8.2 billion, exceeding wireless infrastructure for the first time after the latter falls this year to $7.1 billion.

After wireless, computer platforms representing PCs and similar computing devices collectively represent the next-largest segment, forecast to take up 23 percent of OEM chip spending. China, which became the world’s biggest market for PC shipments last year, continues to account for a hefty part of PC-related chip spending even as the overall global computer market has slowed.

However, it should be noted that if the computer platforms segment is combined with the computer peripherals market, it becomes the largest single semiconductor market, beating wireless.

Following wireless and the computer platforms segment are the other smaller markets that take up the rest of OEM chip spending. In decreasing size, these segments are consumer, computer peripherals, automotive, industrial and wired communications, with share portions for each ranging from 6 to 15 percent.

Among semiconductor components, OEM chip spending this year will be largest in logic integrated circuits (IC) at nearly $75 billion, followed by memory ICs at $44 billion. The rest of the categories being tracked include analog ICs, discrete chips, microcomponent ICs, optical semiconductors, and sensors and actuators.



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