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Gartner Says Apple Became the Top Semiconductor Customer in 2011

-Top 10 Original Equipment Manufacturers Represented $105.6 Billion of Semiconductor Demand, Accounting for 35 Percent of Total Semiconductor Chip Revenue in 2011

-Gartner Analysts Will Provide Insight and Advice at the Gartner CIO Leadership Forum 2012 to be held in Dubai, UAE on 27 - 28 February 2012 at the Raffles

Dubai, January 24, 2012 -- Leading electronic equipment manufacturers remained the center of the semiconductor world in 2011, accounting for $105.6 billion of semiconductors on a design total available market (TAM) basis -- 35 percent of semiconductor vendors' worldwide chip revenue, according to Gartner, Inc. This represented a year-over-year increase of $1.8 billion, or 1.8 percent from 2010.

Design TAM represents the total silicon content in all products designed by a certain electronic equipment manufacturer or in a certain region, while purchasing TAM represents the total silicon content purchased directly by a certain electronic equipment manufacturer or in a certain region. Design TAM is a useful index for semiconductor vendors when they are considering how to allocate their sales or field application engineer resources by customer or region. Purchasing TAM is a useful index for semiconductor vendors when they are considering how to establish an efficient distribution network by customer or region.

"The major growth drivers in 2011 were smartphones, media tablets and solid-state drives (SSDs)," said Masatsune Yamaji, principal research analyst at Gartner. "Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand. Media tablets were also a growth driver for the semiconductor market throughout 2011."

"Given the rapidly changing competitive structure of the IT and electronics industry, no semiconductor device vendor can afford just to monitor the requirements of the current market leaders," Mr. Yamaji said. "Vendors need to be constantly looking for new market entrants who will, in turn, be tomorrow's market leaders."

Within the top 10 rankings, three companies were from the Americas, three from Asia/Pacific, three from Japan and one from Europe, the Middle East and Africa (EMEA). Apple led the market in 2011 (see Table 1), achieving significant growth, as it has done for the past five years. As a result, Apple became the biggest customer of semiconductor chip vendors in 2011, climbing two places in the ranking, from third in 2010.

Apple gained a much greater share of the smartphone market, and its media tablet business was also highly successful in 2011. While DRAM prices fell drastically in 2011, and many PC vendors decreased their total semiconductor demand accordingly, the success of the MacBook Air enabled Apple to increase semiconductor chip demand even in its PC business.

Table 1

Top 10 Semiconductor Design TAM by Company, Worldwide 2011, Preliminary (Millions of Dollars)

Rank 2010	Rank 2011	Company	2010	2011	Growth (%)	Share (%)
3	1	Apple	12,819	17,257	34.6	5.7
2	2	Samsung Electronics	15,272	16,681	9.2	5.5
1	3	HP	17,585	16,618	-5.5	5.5
5	4	Dell	10,497	9,792	-6.7	3.2
4	5	Nokia*	11,318	9,042	-20.1	3.0
6	6	Sony*	9,020	8,210	-9.0	2.7
7	7	Toshiba	7,768	7,589	-2.3	2.5
10	8	Lenovo	6,091	7,537	23.7	2.5
8	9	LG Electronics	6,738	6,645	-1.4	2.2
9	10	Panasonic	6,704	6,267	-6.5	2.1
		Others	195,552	196,413	0.4	65.0
		Total	299,364	302,051	0.9	100.0

TAM = total available market

Source: Gartner (January 2012)

Mr. Yamaji said that as more brand-name companies are increasing their production outsourcing to original design manufacturers (ODMs) and electronics manufacturing services (EMS) providers, semiconductor procurement by ODMs and EMS providers has increased year over year. Currently, three of the top 10 purchasing TAM companies are so-called contract manufacturers.

"Semiconductor chip vendors must pay attention not just to the design TAM and purchasing TAM by company, but also by region," said Mr. Yamaji. "This is the key to avoiding inappropriate sales resource allocation. They must keep an eye on design-win opportunities in the U.S., while also establishing a strong distribution network in China."

-Ends-

*Note to Editors on Nokia and Sony

In the ranking table, two joint ventures are included as stand-alone firms, as they are independent buying centers: Sony Ericsson and Nokia Siemens Networks. They are still considered independent companies in this report. This means Nokia does not include the TAM of Nokia Siemens Networks, and Sony does not include the TAM of Sony Ericsson.

Additional information is available in the report "Market Insight: Apple Led OEM, ODM and EMS Semiconductor Demand in 2011." The report is available on the Gartner website at http://www.gartner.com/resId=1517414.

Gartner Middle East CIO Leadership Forum 2012

Gartner analysts will discuss critical business, technology and leadership strategies at the 2nd Annual Gartner Middle East CIO Leadership Forum 2012 to be held in Dubai, UAE on 27 - 28 February 2012 at the Raffles. For further information about the Gartner CIO Leadership Forum, please visit: http://www.gartner.com/technology/summits/emea/cio/

Journalists can register by contacting Sony Shetty, Gartner PR on +91 9820900036 or sony.shetty@gartner.com

Additional information from the event will be shared on Twitter at http://twitter.com/Gartner_inc and using and using #GartnerCIO

About Gartner

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a valuable partner to 60,000 clients in 11,500 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 4,500 associates, including 1,250 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.

© Press Release 2012