Gartner Says Four Chinese OEMs Were Among the Top 10 Global Semiconductor Customers in 2018

Top 10 OEMs Increased Semiconductor Buying Power; Huawei Moved Into Top 3

STAMFORD, Conn., February 4, 2019 -- Samsung Electronics and Apple remained the top two semiconductor chip buyers in 2018, representing 17.9 percent of the total worldwide market, according to Gartner, Inc. This is a 1.6 percent decrease compared with the previous year. However, the top 10 OEMs increased their share of chip spending to 40.2 percent in 2018, up from 39.4 percent in 2017.

“Four Chinese original equipment manufacturers (OEMs) — Huawei, Lenovo, BBK Electronics and Xiaomi — ranked in the top 10 in 2018, up from three in 2017. On the other hand, Samsung Electronics and Apple both significantly slowed the growth of their chip spending in 2018,” said Masatsune Yamaji, senior principal analyst at Gartner. “Huawei increased its chip spending by 45 percent, jumping in front of Dell and Lenovo to the third spot.”

Eight of the top 10 companies in 2017 remained in the top 10 in 2018, with Kingston Technology and Xiaomi replacing LG Electronics and Sony (see Table 1). Xiaomi rose eight places to the 10th position, increasing its semiconductor spending by $2.7 billion in 2018, a 63 percent growth year over year.

Table 1. Preliminary Ranking of Top 10 Companies by Semiconductor Design TAM, Worldwide, (Millions of Dollars)

2017 Ranking	2018 Ranking	Company	2017	2018	2018 Market Share (%)	Growth (%) 2017-2018
1	1	Samsung Electronics	40,408	43,421	9.1	7.5
2	2	Apple	38,834	41,883	8.8	7.9
5	3	Huawei	14,558	21,131	4.4	45.2
3	4	Dell	15,606	19,799	4.2	26.9
4	5	Lenovo	15,173	17,658	3.7	16.4
6	6	BBK Electronics*	11,679	13,720	2.9	17.5
7	7	HP Inc.	10,632	11,584	2.4	9.0
13	8	Kingston Technology	5,273	7,843	1.6	48.7
8	9	Hewlett Packard Enterprise	6,543	7,372	1.5	12.7
18	10	Xiaomi	4,364	7,103	1.5	62.8
		Others	257,324	285,179	59.8	10.8
		Total	420,393	476,693	100.0	13.4

TAM = total available market

*BBK Electronics includes Vivo and OPPO

Note: Numbers may not add to totals shown because of rounding

Source: Gartner (February 2019)

The continued market consolidation in the PC and smartphone markets had a significant impact on the semiconductor buyers’ ranking. The big Chinese smartphone OEMs, in particular, have increased their market domination by taking out or purchasing competitors. As a result, semiconductor spending by the top 10 OEMs increased significantly, and their share reached 40.2 percent of the total semiconductor market in 2018, up from 39.4 percent in 2017. This trend is expected to continue, which will make it harder for semiconductor vendors to maintain high margins.

Another factor impacting the market was memory prices. While the DRAM average selling price (ASP) has been high in the past two years, it is now declining. However, the impact is limited, as OEMs will increase their memory content when the ASP declines and also invest in premium models. Gartner predicts that the share of total memory chip revenue in the total semiconductor market will be 33 percent in 2019 and 34 percent in 2020, higher than its 31 percent share in 2017.

“With the top 10 semiconductor chip buyers commanding an increasing share of the market, technology product marketers at chip vendors must allocate a majority of their resources to their top 10 potential customers,” said Mr. Yamaji. “It is crucial that they take advantage of the open budget that is available due to the weakening memory ASPs and encourage customers to use advanced chips or increase memory content.”

Gartner clients can get more information from “Market Insight: Top 10 Semiconductor Chip Buyers, Worldwide, 2018 (Preliminary).”

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