Apple's buying power relegates Samsung to distant second

Apple's dominance over the global chip "supply chain" is increasing, fast enough that nobody's even close, says iSuppli.

Here's another category where Apple and Samsung go head to head: chip buying. And Apple's dominance is expanding rapidly.

Rip off the plastic, metal, and glass on any consumer device, and it's pretty much all chips. And if you're the No. 1 buyer of those chips, as Apple is, that means you hold a lot of sway over global chip manufacturing.

More sway than chip kingpin Samsung (which Apple, ironically, buys lots of chips from).

"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," Myson Robles-Bruce, an analyst IHS iSuppli, said in a report released today.

The supply chain is the global web of manufacturers and assemblers: think Foxconn and Pegatron.

Top-10 Ranking of Global OEM Semiconductor Purchasers (Ranking by Revenue in Billions of U.S. Dollars).
Top-10 Ranking of Global OEM Semiconductor Purchasers (Ranking by Revenue in Billions of U.S. Dollars). IHS iSuppli

Apple this year is expected to buy nearly $28 billion worth of semiconductors, up 15 percent from $24 billion in 2011, according to an IHS iSuppli.

"This means that Apple will dramatically outperform the No. 2 purchaser, Samsung," iSuppli said, allowing it to continue its hegemonic ways.

Apple, in short, is on a tear. Apple will increase its chip buying at a rate nearly three times faster than the next-fastest-rising purchaser, No. 8 ranked Canon, which will see a 4.6 percent increase this year, iSuppli said.

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.


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