Apple coming to dominate electronics supply chain, says IHS

Apple coming to dominate electronics supply chain, says IHS

SAN FRANCISCO—Apple Inc. is expected to buy nearly $28 billion worth of semiconductors in 2012, up 15 percent from the $24 billion it spent on chips in 2011, according to market research firm IHS iSuppli.

According to IHS, Apple is increasing semiconductor spending at a faster rate than other top chip buyers, increasing its dominance over the market, according to IHS. Apple is expected to lengthen its lead in chip spending over No. 2 chip buy Samsung Electronics Co. Ltd., which is expected to spend about $14.9 billion on chips this year, up from $14.8 billion last year, according to IHS.

Apple is maintaining its lead in semiconductor purchasing because of continuing strong demand for its products, combined with the company’s capability to maintain beneficial relationships with more than 150 suppliers that provide components or offer manufacturing and assembly services, IHS said.

Apple is also outgrowing the other OEMs and making gains in the various regions of the world, giving Apple competitive advantages when it comes to manufacturing electronic products, IHS said.

"It’s well known that Apple has already conquered the smartphone and tablet segments—but behind the scenes the company is engaging in another kind of conquest: the dominance of the electronics supply chain," said Myson Robles-Bruce, senior analyst for semiconductor spending and design activity at IHS, in a statement.

Robles-Bruce said such a dominant position gives Apple increased ability to dictate semiconductor pricing, control product roadmaps and obtain guaranteed supply and delivery. "For Apple, these benefits translate into competitive advantages, letting it offer more advanced products at lower prices, faster and more reliably than the competition," Robles-Bruce said.

IHS has ranked Apple as the top chip buyer worldwide since 2010.



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