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Top 10 semiconductor buyers increased chip spending by 25.2% in 2021, says Gartner

Top 10 semiconductor buyers increased chip spending by 25.2% in 2021, says Gartner

02 Feb 2022

The semiconductor shortage and the COVID-19 pandemic disrupted global original equipment manufacturers’ (OEMs) production in 2021, but the top 10 OEMs increased their chip spending by 25.2% and accounted for 42.1% of the total market.

In a statement on Tuesday (Feb 1), technology and consulting firm Gartner Inc research director Masatsune Yamaji said semiconductor vendors shipped more chips in 2021, but the OEMs’ demand was far stronger than the vendors’ production capacity.

Gartner said the semiconductor shortage prevented OEMs from increasing production of not just those for vehicles but also various electronic equipment types, including smartphones and video game consoles.

However, it said the chip shortage significantly increased selling prices, which meant OEMs spent much more on semiconductor procurement in 2021 than in prior years.

Yamaji said the average selling prices (ASPs) of semiconductor chips, such as microcontroller units, general-purpose logic integrated circuits, and a wide variety of application-specific semiconductors, increased by 15% or more in 2021.

“The semiconductor shortage also accelerated OEMs’ double booking and panic buying, causing a huge spike in their semiconductor spending,” he said.

Gartner said Apple and Samsung Electronics retained the top two spots since 2011 while swapping ranks through the years.

Huawei struggled to buy chips and dropped down from the No 3 spot to the No 7 position in 2021.

Other Chinese smartphone OEMs, such as BBK Electronics and Xiaomi, significantly increased their semiconductor spending as they successfully compensated for the loss of market share by Huawei in the smartphone market in 2021.

Apple remained at the top of the semiconductor spending customer ranking in 2021. Apple increased its spending on memory chips by 36.8% and on non-memory chips by 20.2% in 2021.

However, it decreased its demand for computing microprocessing units due to the shift to its own in-house-designed application processors.

Samsung Electronics increased its memory spending by 34.1% and non-memory chip spending by 23.9% in 2021.

The increase of memory spending was the result of not just a rise of memory price, but also Samsung’s growth in its target electronic equipment markets, especially the smartphone and solid-state drive markets.

Source: The Edge Markets

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