Gartner Announces Samsung Electronics and Apple as World's Largest Semiconductor Customers in 2016
Cisco Falls Out of Top 10 Purchasing Companies; Chinese Companies Enter the Rankings

Samsung Electronics and Apple have emerged as the world's top semiconductor purchasers for six consecutive years.

IT advisory firm Gartner Inc. announced that Samsung Electronics and Apple maintained their positions as the two largest semiconductor-purchasing companies, accounting for 18.2% of the global semiconductor market in 2016 (refer to Table 1). The two companies purchased a combined total of $61.7 billion in semiconductors in 2016, representing an increase of $400 million compared to the previous year.

▲Reference photo: Samsung Electronics launched the 2017 'Galaxy A5' targeting the young premium segment as its first smartphone of the year on the 19th of last month.

Masatsune Yamaji, senior analyst at Gartner, stated, "In 2016, Samsung Electronics and Apple maintained their leading positions in the semiconductor purchasing index for six consecutive years," and added, "While both companies continue to exert considerable influence on technology and pricing trends in the broader semiconductor industry as in the previous year, their influence has somewhat diminished due to uncertain future growth prospects."

Last year, Samsung Electronics engaged in fierce competition with Chinese original equipment manufacturer (OEM) companies across various markets including smartphones, LCD TVs, and LCD panels. However, the company expanded its design TAM (Total Available Market) and recorded a 9.3% market share, reclaiming the top position in the global design TAM market. In Apple's case, for the first time since Gartner began conducting design TAM research in 2007, the company experienced a decrease in its design TAM, capturing an 8.8% market share. Apple's 2016 performance was affected by sluggish iPad sales and declining PC market share.

Semiconductor Companies Need to Diversify Customer Base to Respond to Dynamics in Electronics Market

Of the top 10 companies in design TAM in 2015, nine companies remained on the 2016 list. Cisco Systems fell out of the top 10 rankings in 2016, with BBK, a Chinese smartphone OEM company that showed significant growth last year, taking its place. Among the top 10 companies, there were three each from the United States and China, and two from South Korea and one from Japan. This was the first time three Chinese companies appeared in the top 10, demonstrating that as China's macroeconomic growth decelerates, the domestic electronics market is becoming increasingly important.

Researcher Masatsune Yamaji stated, "Although the influence of the two dominant OEM players, Samsung Electronics and Apple, in the semiconductor industry has weakened, the combined design TAM of the top 10 companies exceeded the average growth rate of the entire semiconductor market in 2016."

He further noted, "However, due to rapidly changing market share dynamics, semiconductor companies can no longer rely solely on a small number of large customers. While BBK showed dramatic growth in 2016 with an increased design TAM, BBK's exceptional growth indicates that its domestic business operations are that much more unstable. Therefore, semiconductor companies' technology and product marketing managers must always make efforts to diversify their customer base while keeping in mind potential risks regarding their major customers."