Samsung Electronics dethrones Apple as top global semiconductor chip buyer in 2016

Samsung Electronics has taken over the top spot and over threw Apple in the global semiconductor chip buyers in 2016. While Samsung Electronics grew by 4.4% in 2016 from the previous year, Apple saw a decline of 2.9% during the year.

However, the two companies remained the top two semiconductor chip buyers in 2016, representing 18.2% of the total worldwide market, according to a Gartner report. Samsung and Apple together consumed $61.7 billion of semiconductors in 2016, an increase of $0.4 billion from 2015.

While Samsung Electronics spend $31.6 billion on buying semiconductor chips in 2016, Apple spent $29.9 billion in the same year.

Although Samsung Electronics experienced intense competition from Chinese original equipment manufacturers (OEMs) in various markets including smartphones, LCD TV and LCD panel through 2016, the company increased its design total available market (TAM) and came back as the global top design TAM company in 2016 with 9.3% share.

Apple decreased its design TAM in 2016 for the first time since Gartner started design TAM research in 2007, ending the year with 8.8% share of the market. The iPad did not sell well through 2016 and Apple also lost market share in the PC market.

Besides these two players, Chinese-based smartphone maker Huawei saw the largest growth in semiconductor chip spends. It's semiconductor chip spends grew by 30.1% during 2016 as its spends grew to $9.8 billion from $7.5 billion in 2015. This took it one spot higher in the ranking table to No.5 from No.6 last year.

Dell too continued to be one of the biggest buyers in the semiconductor chip space. It's spends grew by 25.5% during the year from $10.6 billion in 2015 to $13.3 billion in 2016. This took its ranking to No.3 spot from No.4 last year. In fact, Lenovo moved down one spot as it saw a decline of 5.1%.

Masatsune Yamaji, principal research analyst at Gartner, “This is the sixth consecutive year that Samsung Electronics and Apple have topped the semiconductor consumption table. While both companies continue to exert considerable influence on technology and price trends for the wider semiconductor industry, their impact has lessened due to falling expectations for future growth.”

Nine of the top 10 companies in 2015 remained in the top 10 in 2016. Cisco Systems dropped out of the top 10 in 2016 to be replaced by Chinese smartphone OEM, BBK Electronics, which grew rapidly in 2016.

The top 10 now consists of four companies from the US, three companies from China, two from South Korea and one from Japan. This is the first time that three Chinese companies have ranked in the top 10, proving that even with the slowing macroeconomic situation in China, the importance of the Chinese electronics market is increasing.

Preliminary Ranking of Top 10 Companies by Semiconductor Design TAM, Worldwide, 2016 (Millions of Dollars)