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MacRumors
Jun 8, 2011, 10:47 AM
http://cdn.macrumors.com/im/macrumorsthreadlogo.gif (http://www.macrumors.com/2011/06/08/apple-tops-list-of-largest-semiconductor-buyers-in-2010/)


http://cdn.macrumors.com/article-new/2011/06/isuppli_semiconductor_oems.jpg
Top 10 OEM Semiconductor Buyers
(Ranking by Revenue in Billions of U.S. Dollars)

According to a new research report (http://www.isuppli.com/semiconductor-value-chain/news/pages/apple-becomes-worlds-largest-oem-semiconductor-buyer-in-2010.aspx) from IHS iSuppli, Apple became the world's largest semiconductor buyer among original equipment manufacturers (OEMs) in 2010, leaping past HP and Samsung to comfortably grab the top spot with $17.5 billion in spending. Apple's surge has seen it rise from third place in 2009 and sixth place in 2008."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. "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."Apple's lead over second-place HP, which stood at $2.3 billion in 2010, is expected to balloon to over $7.5 billion in 2011 as Apple expands its purchases to over $22 billion while other vendors remain relatively stagnant.

The report points out the marked differences between Apple's and HP's businesses, citing data showing that 61% of Apple's semiconductor spending in 2010 was on wireless products while 82% of HPs spending was on traditional computer products. That difference in focus, combined with the exploding smartphone and tablet market, has been driving Apple's run up the charts.

Apple is also cited for its ability to create an "ecosystem" of its products, with the company's tie-ins across devices leading consumers to stick with Apple for each new computer and mobile device purchase. This contrasts with the traditional PC business that offers no such ecosystem, thus leading to considerably lower brand loyalty across the range of devices and more fragmentation in purchasing patterns.

Article Link: Apple Tops List of Largest Semiconductor Buyers in 2010 (http://www.macrumors.com/2011/06/08/apple-tops-list-of-largest-semiconductor-buyers-in-2010/)



Consultant
Jun 8, 2011, 10:51 AM
Seems like Apple is leading the post-pc world, one step at a time.

The other companies are basically flatlined or suffering from negative growth, even with their wanna bee products.

trilla12
Jun 8, 2011, 10:55 AM
Wow... like i said last week, looks like it's definitely time to put some money into TSM Taiwan Semiconductor Manufacturing TSMC

chrmjenkins
Jun 8, 2011, 10:55 AM
Apple continues to rise and take over just about every metric we have for a tech company.

I hope other American companies take note. Apple is a company that takes pain to, and successfully defines itself through its product offerings and philosophy. That's what's necessary to differentiate yourself from many other companies in a global economy.

talkingfuture
Jun 8, 2011, 10:55 AM
Thats quite an impressive margin over the rest of the industry. I would have thought Sony would be further up that list with all the products that they make that use Semiconductors.

*LTD*
Jun 8, 2011, 11:05 AM
Wouldn't be good for anyone to lose Apple as a customer . . .

Mackan
Jun 8, 2011, 11:06 AM
Wonder what the world would look like if it's all an Apple ecosystem...

Consultant
Jun 8, 2011, 11:12 AM
Wouldn't be good for anyone to lose Apple as a customer . . .

Agree. Hopefully Apple can just drop Samsung.

gnasher729
Jun 8, 2011, 11:15 AM
Obvious questions: 1. What counts as "semiconductor"? Does it include LCD screens? Probably includes SSD, but not HD? 2. Some of the companies are also producers of semiconductors. Are numbers for using their own products at a reasonable market price added in? (For example, if Apple buys $1bn worth of Samsung flash memory, and Samsung uses the same amount of Samsung flash memory itself, is the second $1bn included in Samsung's numbers? )

Agree. Hopefully Apple can just drop Samsung.

There's no reason for that at all. As long as the court case between Apple and Samsung doesn't affect price and quality of Samsung parts negatively, there is no reason for that.

toddybody
Jun 8, 2011, 11:17 AM
Those numbers make total sense when youre taking Apple's line up...

I'd think iPhone/iPad sales have to make up a large majority of those numbers.

Cheers :apple:

*LTD*
Jun 8, 2011, 11:20 AM
Agree. Hopefully Apple can just drop Samsung.

Apple has the power to do that. They're a big customer on the supply side and they can barely keep up with product demand. The question is who will fill the gap. I'm not sure who the candidates might be.

I don't really see Samsung as a problem on the supply side. Their mobile division needs to be kept in check, but that'll sort itself out in time. Apple makes money for Samsung and in turn Apple gets a reliable supplier. The mobile issues have nothing to do with it, and it would be pretty stupid for those issues to have any bearing whatsoever on the lucrative supply business they've got going.

But you're right, these days Apple has the power to direct the course of their own destiny with a reasonable chance of success.

Skika
Jun 8, 2011, 11:32 AM
Do the chips in Macbook Airs also count in this? Since they are somekind of flash?

NebulaClash
Jun 8, 2011, 11:35 AM
Wonder what the world would look like if it's all an Apple ecosystem...

A lot more efficient.

cvaldes
Jun 8, 2011, 11:45 AM
Do the chips in Macbook Airs also count in this? Since they are somekind of flash?
It includes chips in all Apple products, whether they be Macs, iDevices, or other things like Airport base stations or Apple-branded AC adapters.

Basically, if it has an Apple logo and it has parts made of silicon, it counts.

ten-oak-druid
Jun 8, 2011, 12:02 PM
It is good to see more silicon put to a good use.

Popeye206
Jun 8, 2011, 12:14 PM
It is good to see more silicon put to a good use.

I've seen a couple other good uses too! :eek: :cool:

Popeye206
Jun 8, 2011, 12:19 PM
Apple really has a trifecta of things going for them now that makes it very hard for another to compete. Great products, great support and the eco system that brings customers back for more.

Yes... there will always be individual offerings with better spec lists, or some better features, but when put in the total, Apple shines.

Looking forward to all the new toys coming out this year.

Popeye206
Jun 8, 2011, 12:21 PM
Do the chips in Macbook Airs also count in this? Since they are somekind of flash?

You're talking about the storage... Silicon is the chip or processors. This is what they are referring to.

cvaldes
Jun 8, 2011, 12:39 PM
You're talking about the storage... Silicon is the chip or processors. This is what they are referring to.
The MacBook Air uses NAND flash memory -- a silicon semiconductor -- for storage, just like the iPhone, iPad, iPods (except classic), and Apple TV.

rockinrocker
Jun 8, 2011, 12:59 PM
So all flash memory counts as a semiconductor?

Processors too?

franswa za
Jun 8, 2011, 01:01 PM
headline post

i serially smell jim jones kool-aid

SSSD

Woozman04
Jun 8, 2011, 01:10 PM
So according to this chart Apple has already bought $5billion more on semiconductors halfway through 2011 than it had through all of 2010? Something fishy here

Piggie
Jun 8, 2011, 01:10 PM
Is this just because apart from a pretty case and the OS Apple don't make anything?

So Samsung could bring out there own device and have an almost zero purchase cost as they would make most of the internals themselves.

Kind of makes this buying list a bit pointless.
Would think it would be much better to make your own product and not have to buy it all in from others.

Popeye206
Jun 8, 2011, 01:18 PM
Is this just because apart from a pretty case and the OS Apple don't make anything?

So Samsung could bring our there own device and have an almost zero purchase cost as they would make most of the internals themselves.

Kid of makes this buying list a bit pointless.
Would think it would be much better to make your own product and not have to buy it all in from others.

Yeah... only the Design and the OS make the Apple products different. Simple things.

Samsung does do their own... and they too buy parts from others. Chip and parts manufacturing is very specialized and no one makes it all. It's just not feasible given the number of parts and specialized areas.

But the two things you mention... design and OS... those are no small chunks of cheese. Obviously it's not that simple.

Popeye206
Jun 8, 2011, 01:21 PM
The MacBook Air uses NAND flash memory -- a silicon semiconductor -- for storage, just like the iPhone, iPad, iPods (except classic), and Apple TV.

I'm dig'n what you're saying now.... :) It was a little confusing. I assumed just processors, but they are counting NAND memory too.

Popeye206
Jun 8, 2011, 01:22 PM
So according to this chart Apple has already bought $5billion more on semiconductors halfway through 2011 than it had through all of 2010? Something fishy here

No... ipad and iPhone sales are very strong. Plus Mac sales continue to grow... so Apple is buying way more than it has in the past.

NebulaClash
Jun 8, 2011, 01:26 PM
So according to this chart Apple has already bought $5billion more on semiconductors halfway through 2011 than it had through all of 2010? Something fishy here

No, the linked article says that the 2011 numbers are what they expect to see happen. It's an estimate at this stage, but it represents a full year and is thus a valid comparison to previous years.

cvaldes
Jun 8, 2011, 01:35 PM
So all flash memory counts as a semiconductor?

Processors too?
Yes.

They are all silicon wafers manufactured as semiconductors to contain many transistors.

Didn't you guys take physics in high school?

Woozman04
Jun 8, 2011, 01:42 PM
No, the linked article says that the 2011 numbers are what they expect to see happen. It's an estimate at this stage, but it represents a full year and is thus a valid comparison to previous years.
Ok. 2011 numbers are projected for full year. That makes much more sense.

No... ipad and iPhone sales are very strong. Plus Mac sales continue to grow... so Apple is buying way more than it has in the past.

Not so much see above.

gnasher729
Jun 8, 2011, 01:45 PM
So Samsung could bring out there own device and have an almost zero purchase cost as they would make most of the internals themselves.

No, they wouldn't have "almost zero" purchase cost. Creating silicon isn't cheap. There are immense investments to be made, and the production is definitely not free either. If Apple and Samsung use the same Samsung chip, then Samsung's cost is probably more than 95% of Apple's cost. If Samsung tried to charge Apple $100 for something that costs $90 to produce, then Toshiba would offer the same item for $95 and Apple would buy that.

paul4339
Jun 8, 2011, 02:05 PM
No, they wouldn't have "almost zero" purchase cost. Creating silicon isn't cheap. There are immense investments to be made, and the production is definitely not free either. If Apple and Samsung use the same Samsung chip, then Samsung's cost is probably more than 95% of Apple's cost. If Samsung tried to charge Apple $100 for something that costs $90 to produce, then Toshiba would offer the same item for $95 and Apple would buy that.

yes... it's a high volume, low margin business. If it's a commodity good or service typically you have to get as many orders as you can, and control costs like crazy. You may have to bring in $50 billion in orders, just to make $1-2 billion and one mistake will cost you all your profits... that's why often they locate in areas like Taiwan, where the costs are a bit lower but the service quality is still quite high.

Thunderhawks
Jun 8, 2011, 02:30 PM
Obvious questions: 1. What counts as "semiconductor"?

Everything that conducts a quarter more than a quarter conductor or 50% less than a full conductor.

It is also important whether the conductor is for an orchestra or a train.

Some conductors won't let anything through without a ticket, which makes them a non- conductor.

I just can't get excited about anything iSupply reports. Especially when it's incomplete.

They usually mention that the average price is only 12 cents give or take 2 cts.

BornAgainMac
Jun 8, 2011, 03:13 PM
I bet I am on that list somewhere in the consumer space.

caspersoong
Jun 11, 2011, 09:22 AM
Yet Apple refuses to reduce the prices on their devices with flash memory.

AppleScruff1
Jun 11, 2011, 10:30 AM
This is so exciting!!! I can't wait to tell everyone who owns HP and Samsung products. They will be absolutely crushed!! I won't be surprised if Apple is soon challenging the US government for the amount of paper clips and pens being purchased. This is just another example of Apple's world dominance.