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January 25, 2013

Samsung overtakes Apple in semiconductor consumption: Gartner

Together they consumed $45.3bn of semiconductors during the year

By CBR Staff Writer

Samsung has overtaken Apple by becoming the top global semiconductor consumer in 2012, according to a new report from Gartner.

Gartner’s design total available market (TAM) analysis reveals that both smartphone makers have collectively consumed $45.3bn of semiconductors during the year, representing a rise of $7.9bn from 2011.

Gartner principal research analyst Masatsune Yamaji said that although Samsung and Apple continue to go from strength to strength, other leading electronic equipment makers fared less well, and six of the top 10 reduced their demand in 2012.

"In addition to a weak macroeconomic situation, a dramatic change in consumer demand contributed to a reduction in semiconductor demand in 2012," Yamaji said.

"The PC market still represented the largest sector for chip demand, but desktop and mobile PCs did not sell well, as consumers’ interest shifted to new mobile computing devices like smartphones and media tablets.

"This shift caused a substantial decrease in semiconductor demand in 2012, as the semiconductor content of a smartphone or a media tablet is far less than that of a PC."

Even though both firms captured 15% of total semiconductor demand, the total semiconductor market reported an overall decline of 3%, the report revealed.

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"While the growth of new mobile computing devices, notably smartphones and media tablets, has not fully compensated for the drop in the semiconductor demand from the PC market, the data center and communications infrastructure market will keep drivingsemiconductor demand," Yamaji said.

"The limited computing and storage resources of new mobile computing devices will be compensated for by cloud computing services with light application software."

HP, Dell, Sony, Lenovo, Toshiba, LG Electronics, Cisco and Nokia followed Samsung and Apple are in the list of the top 10 firms for global semiconductor customers.

During the year, the top 10 firms demanded $106.4bn of semiconductors, accounting for 36% of total semiconductor vendors’ global revenue of $297.6bn.

According to Gartner, price competition between smartphone and media tablet vendors was severe during the year due to difficulty in achieving hardware differentiation.

"Innovations in device hardware will soon be copied by competitors, as semiconductor vendors will soon provide commercial SoC (system-on-chip), software and reference designs to hardware vendors needing to catch up with innovative market leaders," Yamaji said.

"Semiconductor vendors must aid, or at least monitor, the hardware innovations of the market leaders."

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