In a reflection (or not ?) of their performance in the sales department, Samsung Electronics and Apple Inc. have occupied the positions of the top semiconductor buyers in the year 2015.
As per data from a Gartner report, the tech behemoths together consumed somewhere around $59.0 billion worth of semiconductors last year. The sum totals up to around 17.7 percent of the total semiconductor market in 2015. It wasn’t really surprising considering that while Samsung aced in terms of number of shipments made last year, Apple was at the top, on a revenue basis.
Meanwhile, the top 10 companies accounted for about 36.9 percent of the total semiconductor sale, marking a decrease of one percent from 2014.
Masatsune Yamaji, Principal Research Analyst at Gartner says,
Samsung Electronics and Apple have topped the semiconductor consumption table for five consecutive years, but the growth of Samsung’s design total available market (TAM) was lower than the total semiconductor market in 2014 and 2015.
He also remarked upon the possibility of decreasing revenues for major companies, a fact which has a direct bearing upon the semiconductor market as well.
Samsung and Lenovo, the fastest-growing companies over the last five years, decreased their design TAM in 2015 and the risk of revenue declines from the strongest customers for semiconductor chip vendors is increasing.
Samsung aced the category and was responsible for driving 8.9% of the total sale, Apple came a close second with 8.7%. However, while Samsung recorded a negative growth of 3.6 percent in its TAM, Apple managed to grow an impressive 7.1 percent in the same space.
Samsung and Apple, along with eight other companies — including Lenovo, Dell, HP, Sony, HP Enterprises, LG Electronics, Huawei and Cisco — bought a $123 billion worth of semiconductors and accounted for 36.9 percent of semiconductor chip vendor’s worldwide revenue in 2015.
The top 10 list saw some minor changes from the past year, mainly as a result of HP dividing itself into two different entities. Significantly, Toshiba lost its place in the ranks, thanks to the entry of HP enterprises.
HP’s spin-off and Toshiba’s departure were cumulatively responsible for the decline in the contribution of top 10 companies. While $123 billion does sound like a gigantic figure at first, its actually about $4 billion less than last years tally.
Also, as markets increasingly hover around their saturation points, the growth of the electronic device market is undergoing a slowdown. Understandably, the risk of revenue declines from customers for semiconductor chip vendors is also increasing. What’s more, with the exception of Apple and Huawei, all major manufacturers have recorded negative growths.
The slowing of Samsung’s design TAM since 2014 should be considered a big trend change. The cycle of an inflated boom and the obsolescence of electronic equipment are becoming faster, and it is also much more difficult for leading companies to maintain their position for a long time. Current winners may not always be the winners in the future.
Manufacturers are coming to understand this and are quickly adapting themselves to the new, emerging market scenarios. Apple for example, successfully pulled off its campaigns in Europe and China as a result of which, it aced in terms of revenue from smartphone sale.
Ironically though, the fact that the devices of today are more durable is in part leading to a slowdown in sales. Companies must now depend upon tactics including introducing improved tech or decreasing prices to continue driving sales.