Apple to challenge top chip buyer in 2012, says iSuppli

The phenomenal success of the iPad and iPhone is expected to make Apple the world's second-largest OEM semiconductor buyer in 2011, potentially positioning the company to become the world's top chip purchaser in 2012, according to iSuppli.

With projected semiconductor spending in 2011 of US$16.2 billion, Apple will leap over Samsung Electronics, which will drop to the third spot after finishing with US$13.9 billion, said iSuppli. Apple's one-step rise in the rankings will move the company to a close second place behind Hewlett-Packard (HP), which will retain its No. 1 ranking in 2011 thanks to US$17.1 billion in spending.

"Leadership in semiconductor spending represents a position of prestige," said Min-Sun Moon, senior analyst for semiconductor spend and design at iSuppli. "An advancement in the rankings means that a company has been successful in introducing new products and that it is allocating more dollars in research and development - two factors that, incidentally, feed innovativeness as well."

In Apple's case, Moon said, the move to second place reflects the company's triumph in the iPhone 4 and iPad, two flagship products that have captured the public's imagination - and have garnered tremendous sales - on a scale unequaled by rival devices.

"Apple's expected rise to No. 2 - eclipsing Samsung and putting it within a hair's breadth of HP - means that the company's investment in its new smartphone and tablet has paid off - and will continue to do so for some time to come," Moon noted.

Apple's anticipated growth in 2011 continues the extraordinary arc of expansion enjoyed by the company in recent times. Apple recorded a 13% expansion in semiconductor spending in 2009, when most manufacturers posted negative growth, iSuppli said. In 2010, spending by Apple will expand by a staggering 54.0% to US$12.4 billion - the highest growth rate predicted for any company. Spending levels next year will be augmented by another 30.4% for the company to catapult to its vaunted second-place finish.

Barring any unforeseen mergers and acquisitions by current champion HP, Moon surmised, Apple could well snag the top spot as soon as 2012, ousting a company that has held down the pinnacle since early this millennium.

Other fast-growing manufacturers also shine in spotlight

For 2010, a number of OEM companies are set to join Apple and post rapid growth in semiconductor spending levels, iSuppli data show.

The next five companies following Apple, in descending order, are Lenovo at 47.1%; SanDisk at 44.3%; Research in Motion (RIM) at 42.9%; Cisco Systems at 37.3%; and Acer at 29.4%.

Overall, semiconductor consumption will continue to increase in the Asia-Pacific region, given the rise of manufacturing levels in the region and because of outsourcing activity flowing out from other areas. Major markets contributing to this trend include compute platforms, wireless communications and wired communications.