Samsung Surpasses Apple To Become World’s Biggest Chip Buyer

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Samsung has surpassed Apple as the world’s biggest buyer of semiconductors, according to Gartner. The Korean company’s hugely popular smartphones, such as the Galaxy S III and the Galaxy Note II, led to a 29% surge in chip purchases in 2012, taking its semiconductor spending past that of any other company.

Samsung spent $23.9 billion on chips in 2012, Gartner said in a statement on Wednesday, citing its own estimates. Although Apple’s semiconductor spending also rose by 14%, its $21.4 billion bill meant it’s no longer spending more on chips than everyone else. Once again, Samsung’s wide range of devices are being credited for the increase.

Samsung offers a wide range of smartphones and tablets that cater to all three market tiers — the high end, the low end, and everything in the middle. Apple, on the other hand, has always been about making premium products for the high end of the market. This is a business model that has been called into question a lot in recent weeks as Samsung increases its share of the smartphone market.

In 2013, Samsung’s share is expected to reach 35%, making the gap between Samsung and Apple at the top of the market even greater. The only way Apple can prevent this, according to some analysts, is to reduce the profit margins of the iPhone and make it cheaper, or introduce a low-cost, “budget” smartphone.

Rumors have claimed this low-cost iPhone will make its debut before the end of the year, but other reports have dismissed those claims. Even Phil Schiller, Apple’s senior vice president of worldwide marketing, has insisted Apple will not make “cheap” products just to grab market share.

Whatever the case may be, Apple must do something to stay on Samsung’s tail. The Korean company’s phones and tablets have been so successful that it’s been able to avoid a slump in PC demand that caused global chip sales to fall 3% during 2012 to $297.6 billion.

Six of the top ten chip buyers cut spending last year because of slump in computer sales, Gartner said. HP, which was ranked third, pared expenditure 13% to $14 billion, which fourth-placed Dell cut spending by to $8.6 billion. Sony, on the other hand, saw a little boost of 1.9%, which saw its ranking rise from eighth to fifth.