Wireless displaces computers as top semiconductor spending area for OEMs

This is not the first year that wireless spending has been larger than for computers, with wireless having led as recently as 2009. However, 2011 does mark the beginning of a period when the balance of semiconductor spending will shift decisively toward wireless and away from computing. In 2013, OEM wireless spending is projected to soar to $72.9 billion, while computers will remain flat at $53.4 billion.

“Among the 10 segments tracked for semiconductor spending, the biggest market share—at 24 percent—belonged to the wireless market, spurred by prodigious mobile handset and tablet sales exemplified by the runaway success of Apple’s popular offerings,” said Wenlie Ye, analyst for semiconductor design and spend at IHS. “Wireless will continue to generate the most growth during the next two years. A substantial portion of the segment’s increase will be due to rising tablet sales, although mobile handsets like smartphones will continue to account for the lion’s share of semiconductor segment in the wireless area.”

Meanwhile, computer semiconductor spending in 2011 rose by just 4 percent to $53.7 billion, up from $51.8 billion in 2010.

“The market for desktops and notebooks has stumbled in the shadow of smartphones and tablets, whose portability and computer-like features have usurped the position of the once-mighty PCs,” Ye said.

In the fast-growing tablet space, Apple in 2011 spent more than any other OEM on semiconductors, to the tune of $4.6 billion. The iPad continues to be unmatched in its class despite earnest efforts from rival products to loosen its hold on the market. Samsung Electronics was a very distant second after Apple with $603.2 million, followed by HTC from Taiwan with $199.2 million.

Total semiconductor spending among the industry’s major OEMs for all application markets in 2011 reached $240.6 billion, up approximately 5 percent from $230.1 billion in 2010.

Although growth last year was much more modest after the massive 32 percent expansion of 2010, overall semiconductor spending levels rose for the second straight year, and there was no indication that the industry would retrench to the dark days of 2009 when spending contracted by a steep 13 percent.

IHS iSuppli

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