Semiconductors were in especially high demand last year, with the top 10 original equipment manufacturers increasing their semiconductor spend by 10% in 2020 and accounting for 42% of the market, up from 40.9% in 2019, according to new data from Gartner.
Apple was the top purchaser of semiconductor chips last year — representing 11.9% of the total worldwide market.
This was primarily due to the continued success of its AirPods, demand for its Mac computers and iPads and increasing NAND flash consumption — all tied to the rise of remote working in the wake of the COVID-19 pandemic.
“Increasing demand for mobile PCs and tablets due to working from home significantly drove the production of Macs and iPads through 2020,” says Gartner research director Masatsune Yamaji.
“The company also began its transition to Apple silicon for its Mac product line in the second half of 2020.
Samsung Electronics was in second place for semiconductor purchasing, increasing its spending by 20.4% last year, largely due to weaker competition from Huawei and strong demand for enterprise solid-state drives (SSDs) for data centers.
Among the top 10 companies, Xiaomi increased its spending the most (26%) in 2020.
“Xiaomi's smartphone business was minimally impacted due to its primarily online-channel-driven sales model throughout the pandemic.
“Sanctions on Huawei enabled Xiaomi to gain more market share in the smartphone market. Xiaomi's strong success in a wide variety of consumer IoT devices, including smart TVs, wearables and smart home appliances, also increased its semiconductor spending in 2020,” says Yamaji.
Meanwhile, Huawei's semiconductor spending reduced significantly in 2020, down 23.5% from its 2019 figures.
“The U.S. government increased trade restrictions on Huawei in 2020, limiting its ability to purchase semiconductors, which, in turn, limited its smartphone supply and reduced its market share,” says Yamaji.
“However, the Chinese market remains important for semiconductor vendors, as other Chinese smartphone OEMs stepped in to fill the vacuum created by Huawei in the second half of 2020.
Yamaji says the unique situation and environment brought on by the pandemic had multiple implications for semiconductor spending — but other factors contributed too.
“Two major factors impacted the top OEMs' semiconductor spending in 2020, the COVID-19 pandemic and the political conflict between the U.S. and China,” he says.
“The pandemic weakened the demand for 5G smartphones and disrupted vehicle production, but drove the demand for mobile PCs and video games, as well as the investment in cloud data centers through 2020.
“Furthermore, a rise in memory prices in 2020 resulted in increased OEM chip spending through the year.