Analyst: Apple shifts chip balance of power

Apple is set to become the world's second-largest chip buyer in 2011, according to market researcher iSuppli.

Apple is set to become the world's second largest semiconductor buyer in 2011, another sign of the shift in the balance of power in the chip world.

Driven by the success of the iPad and iPhone, Apple is expected to pass Samsung as the world's No. 2 chip buyer in 2011, second only to Hewlett-Packard, according to market researcher iSuppli.

The firm is projecting that Apple's semiconductor spending in 2011 will hit $16.2 billion, surpassing Samsung Electronics, which is forecast to be at about $13.9 billion. HP will stay in the No. 1 position with $17.1 billion in spending, iSuppli said.

"An advancement in the rankings means that a company has been successful in introducing new products," said Min-Sun Moon, senior analyst for semiconductor spend and design at iSuppli, in a statement. It also indicates that a company "is allocating more dollars in research and development--two factors that, incidentally, feed innovativeness as well," she wrote.

Apple's iPhone 4 is replete with sophisticated features.  That means lots of chips.
Apple's iPhone 4 is replete with sophisticated features. That means lots of chips. Credit: James Martin/CNET

Apple's case also demonstrates a shift in the kind of chips that are being purchased. "The move to second place reflects the company's triumph in the iPhone 4 and iPad, two flagship products that have captured the public's imagination--and have garnered tremendous sales--on a scale unequaled by rival devices," she wrote.

Both the iPhone and iPad use Apple-branded processors based on a design from ARM, whose chips are being used in small devices with PC-like functionality--like the iPad--as well as powerful high-end smartphones such as the iPhone 4 and Motorola Droid.

"This is a an indication of where the technology is moving," said Min-Sun Moon in a phone interview. "Apple is contributing to the trend of moving away from Microsoft-Intel to ARM-based systems," she said.

Other fast-growing chip purchasers include the Lenovo Group, SanDisk, and Research in Motion.

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