Apple Topped Semiconductor Purchasers in 2010: Report

Apple became the world's largest buyer of semiconductors in 2010, buoyed by strong sales of the iPad and other mobile devices, according to a new report.

Apple, with its popular iPhones and iPads, became the world's largest buyer of semiconductors in 2010, according to new research from IHS iSuppli.

In the course of claiming that spot, Apple spent $17.5 billion on semiconductors over the course of the year, an increase of 79.6 percent from 2009. That allowed the company to surpass other OEMs, including Samsung and Hewlett-Packard, both of which had ranked ahead of Apple in 2009.

"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," Wenlie Ye, an IHS iSuppli analyst, wrote in a June 8 statement. "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."

The firm believes that demand for Apple's mobile products will help the company expand its lead over Samsung and other competitors in coming years. In contrast to a company such as HP, which spent heavily on semiconductor products for desktops and servers, Apple's semiconductor spend was concentrated largely in the mobile arena.

"This worked to Apple's benefit, with the smartphone and tablet markets massively outgrowing the computer segment in 2010," read IHS iSuppli's June 8 research note. "Smartphone shipments in 2010 rose 62 percent, while tablets exploded by more than 900 percent, driven by the introduction of Apple's iPad."

A recent research note from JP Morgan suggested that Samsung, Motorola and other manufacturers are reducing build plans for their respective tablets, following a lukewarm reception by consumers and businesses.

"Non-Apple tablet hopefuls have adjusted to the weak showing so far," JP Morgan analyst Mark Moskowitz wrote, according to the International Business Times. "In our view, the technical and form factor improvements of the iPad 2 stand to make it tougher for the first generation of competitive offerings to play catch-up, meaning actual shipments could fall well short of plan."

Apple sold 4.7 million iPads in its fiscal 2011 second quarter, which saw the release of the iPad 2. That sales surge comes just as IHS iSuppli pegged PC sales as falling 0.3 percent during the first quarter of the year. "The increasing momentum of the media-tablet market, led by the iPad, is creating a difficult environment for the PC industry," Matthew Wilkins, an analyst with the firm, wrote in a May 24 statement. "IHS believes that the jury is still out on exactly how much tablets are cannibalizing PC sales. However, the rising number of tablet models on the market, along with certain high-profile product launches during the first quarter, caused confusion among consumers as to exactly how to view the tablet platform relative to the PC platform."

That confusion, he added, "contributed to the PC sales decline in the first quarter." Whether the iPad is having a dampening effect on PC sales, though, it seems that its popularity is helping Apple's rank among semiconductor purchasers.