Apple is in a position to overtake Samsung as world's top chip buyer

Apple's strong iPhone sales means that the company has to buy more semiconductors

One indicator of healthy mobile device or PC sales is the amount of money a company spends on chips that go into those devices.

So it should come as no surprise that Apple was the world's second largest chip buyer last year, spending over US$29 billion, up by 7.1 percent compared to 2014, according to a study released by Gartner on Wednesday.

Apple is now in a position to reclaim its position as the top chip buyer from Samsung, which spent $29.87 billion last year, a 3.6 percent decline.

A lot of the semiconductors were purchased for the iPhone, iPad and Macs. Apple tends to buy in bulk to get better pricing on components.

But it isn't easy for Apple to pass on savings from bulk chip purchases to its mobile device and Mac buyers as it spends a lot on research and development, said Masatsune Yamaji, principal research analyst for Gartner.

Market followers can copy the innovative products and spend less on research and development, Yamaji said.

Apple purchases a portion of its A9 processors from Samsung, which fabricates the chips. Samsung makes chips for other companies  as well as for its own smartphone business. Yamaji said Samsung's chip and smartphone companies were separated for the study.

Apple is the world's second largest smartphone vendor behind Samsung, but its shipments are growing at a faster rate, according to an IDC study released on Wednesday.

Samsung's shipments in 2015 were 324.8 million, growing by just 2.1 percent compared to 2014. Apple's shipments went up by 20.2 percent to 231.5 million in 2015.

The world's third largest spender on chips was Lenovo, whose smartphone and PC shipments also went up in 2015. Dell and HP were in the fourth and fifth spots respectively as chip buyers.

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Agam Shah

IDG News Service
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