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Chinese OEMs Takes Dominance In Top Ten Chip Buyers

Four Chinese OEMs – Huawei, Lenovo, BBK Electronics and Xiaomi – were in Gartner’s top ten buyers of semiconductors.

Samsung was the No.1 buyer of semiconductors (as well as being the No.1 semiconductor supplier) with Apple the No.2.

Together, Apple and Samsung accounted for 17.9% of all chips sold.

Collectively, the top 10 buyers increased their share of chip spending to 40.2% in 2018 from 2017’s 39.4%.

Huawei increased its chip spending by 45%, overtaking Dell and Lenovo to take the third spot.

Eight of the top 10 companies in 2017 remained in the top 10 in 2018, with Kingston Technology and Xiaomi replacing LG and Sony.

Xiaomi rose eight places to the 10th position, increasing its semiconductor spending by $2.7 billion in 2018, a 63% growth year over year.

Table 1. Preliminary Ranking of Top 10 Companies by Semiconductor Design TAM, Worldwide, (Millions of Dollars)

2017 Ranking 2018Ranking Company 2017 2018 2018 MarketShare (%) Growth (%) 2017-2018
1 1 Samsung Electronics 40,408 43,421 9.1 7.5
2 2 Apple 38,834 41,883 8.8 7.9
5 3 Huawei 14,558 21,131 4.4 45.2
3 4 Dell 15,606 19,799 4.2 26.9
4 5 Lenovo 15,173 17,658 3.7 16.4
6 6 BBK Electronics* 11,679 13,720 2.9 17.5
7 7 HP Inc. 10,632 11,584 2.4 9.0
13 8 Kingston Technology 5,273 7,843 1.6 48.7
8 9 Hewlett Packard Enterprise 6,543 7,372 1.5 12.7
18 10 Xiaomi 4,364 7,103 1.5 62.8
Others 257,324 285,179 59.8 10.8
Total 420,393 476,693 100.0 13.4
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Source: Gartner (February 2019)

The continued market consolidation in the PC and smartphone markets had a significant impact on the semiconductor buyers’ ranking.

The big Chinese smartphone OEMs, in particular, have increased their market domination by taking out or purchasing competitors.

As a result, semiconductor spending by the top 10 OEMs increased significantly, and this trend is expected to continue, which will make it harder for semiconductor vendors to maintain high margins.

Another factor impacting the market was memory prices. While the DRAM ASP has been high in the past two years, it is now declining.

However, the impact is limited, as OEMs will increase their memory content when the ASP declines and also invest in premium models.

Gartner predicts that the share of total memory chip revenue in the total semiconductor market will be 33% in 2019 and 34% in 2020, higher than its 31% share in 2017.

Source: electronicsweekly

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