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OEM chip spending returns to growth in 2013

Posted: 24 Jul 2013     Print Version  Bookmark and Share

Keywords:semiconductor spending  OEMs  Apple  Samsung  IHS 

Total semiconductor spending by major original equipment manufacturers (OEMs) is expected to rise to Rs.14.41 lakh crore ($265.2 billion) this year, up 4.2 per cent from Rs.13.83 lakh crore ($254.4 billion) in 2012.

After a flat year in 2012, global purchasing of semiconductors by the world's top electronic brands is set to return to growth in 2013, as Apple Inc. and Samsung Electronics contend to claim the title of biggest spender, said IHS Inc.

"Spending by year-end (2013-end) will be at its highest level in six years, with expenditures in 2014 forecast to make another modest jump to Rs.15.18 lakh crore ($279.4 billion)," the market research firm added.

The figures cover OEMs with annual revenue of Rs.5,434.78 crore ($1billion) or more – representing around 83 per cent of the total semiconductor market [Rs.17.33 lakh crore($318.8 billion)].

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If internal chip consumption within companies is excluded, the served available market for semiconductor spending will equate to an amount slightly lower than the total available market (TAM), at Rs.13.11 lakh crore ($241.3 billion) in 2013.

Apple is set to maintain leadership in the OEM semiconductor spending served available market in 2013. However, when also accounting for consumption of internally produced chips, Samsung will take the lead in terms of the total available market this year.

"Depending on the metric used, either Samsung or Apple will be the top chip spender for 2013," said Myson Robles-Bruce, senior analyst for semiconductor spend and design activity at IHS. "Either way, the honour does not merely signify bragging rights but also carries attendant overtones of prestige and influence, with the incumbent leader often tacitly acknowledged by all others as the industry's top semiconductor spender."

Other OEMs that make an appearance in the top ranking list include Hewlett-Packard, Lenovo, Sony, Dell, Cisco Systems, Panasonic, Toshiba, and Asustek Computer.

The greatest share of spending this year will be in wireless communications, where Samsung and Apple lord over other players. Wireless alone is forecast to gobble up 26 per cent—approximately $62 billion—of total top OEM semiconductor served available market. Wireless is also expected to be the highest growth market in 2013 after an annual projected expansion of 12.8 per cent.

Within the wireless segment, handsets continue to be the single largest market, with OEM chip spending in 2013 expected to reach Rs.2.54 lakh crore ($46.7 billion). Media tablets are next at Rs.44,565.22 crore ($8.2 billion), exceeding wireless infrastructure for the first time after the latter falls this year to Rs.38,586.96 crore ($7.1 billion).

After wireless, computer platforms representing PCs and similar computing devices collectively represent the next-largest segment, forecast to take up 23 per cent of OEM chip spending.

Among semiconductor components, OEM chip spending this year will be largest in logic integrated circuits (IC) at nearly Rs.4.08 lakh crore ($75 billion), followed by memory ICs at Rs.2.39 lakh crore ($44 billion). The rest of the categories being tracked include analogue ICs, discrete chips, microcomponent ICs, optical semiconductors, and sensors and actuators.

For more statistics and forecasts, click here.

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