Lenovo joins chip-buying superpowers

IBM PC heir Lenovo joins the top 10, just behind Toshiba, in iSuppli's latest semiconductor spending analysis.

Michael Singer
Michael Singer Staff Writer, CNET News.com
2 min read
China's Lenovo marked a milestone this week as the PC maker joined the ranks of the world's largest buyers of semiconductors, according to market research firm iSuppli.

The company, which purchased IBM's legendary PC unit for $1.75 billion earlier this year, is expected to spend more than $4.3 billion on chips in 2005, analysts said. That would push Lenovo into ninth place on the worldwide list, just ahead of Toshiba. Last year, Lenovo spent $1 billion on chips, securing the 36th spot on the list.

Conversely, IBM's standings dipped, according to the report. The Armonk, N.Y.-based company, which held the No. 9 position last year, dropped to the No. 16 spot this year.

While the addition of IBM's PC business is helping to bolster Lenovo's growth, the report also notes Lenovo's efforts to extend its reach beyond China, where it is the leading PC maker. Lenovo ranks third, behind Dell and Hewlett-Packard, as the company with the largest number of computers shipped, according to IDC.

"As China continues to advance in the worldwide electronics industry, iSuppli expects to see more of the nation's companies enter the top chip-buying ranks," analysts with the research firm said in a statement.

Looking at the list of who is buying semiconductors, HP ranks first again this year with an estimated $13.7 billion in chip purchases in 2005. HP is followed by Dell with $12.4 billion in receipts for semiconductors. Nokia rounds out the top three with $8.7 billion chips bought. Matsushita Electric, Sony, Motorola, Siemens, Samsung Electronics and Toshiba make up the rest of the top 10.

Because of their buying power, iSuppli said these companies are able to get massive discounts when purchasing from component makers and can even make or break products and suppliers in the semiconductor industry.

In 2005, chip purchases by Dell and HP are expected to increase by more the industry average of 6.8 percent, analysts with iSuppli said.

Besides Lenovo, other top 10 companies expected to grow their chip purchasing in 2005 by a faster-than-average rate include Motorola and Samsung

iSuppli's forecast for 2005 covers worldwide chip spending data for 169 companies in all regions.