Skip links
Decreasing spend on semiconductors

Economic downturn means lower spending on computer chips

After years discussing how to increase production of semiconductors to satisfy markets weakened demand for PCs and smartphones and improved chip supply and lower prices impact spending on chips. The top 10 global original equipment manufacturers (OEMs) decreased their chip spending by 7.6% and accounted for 37.2% of the total market in 2022, according to preliminary results by marketing and research firm Gartner.

“Global inflation and recession pressures sharply weakened demand for PCs and smartphones in 2022, impacting global OEMs production.”

Most of the top 10 semiconductor customers are major PC and smartphone OEMs. 

“As a result, a sharp drop in consumer demand for PCs and smartphones prevented the top OEMs from increasing unit production and shipments,” says Masatsune Yamaji, the company’s Senior Director Analyst at Gartner.

Read Also:  Inflation and political instability lead to steep fall in sale of PCs

“The zero-COVID policy in China also caused serious material shortages and short-term disruptions to the electronics supply chain. A lingering semiconductor shortage in the automotive, networking and industrial electronics markets, raised chip average selling prices and accelerated semiconductor revenue increases in these markets.” 

“Consequently, these factors resulted in the top OEMs decreasing their share of overall semiconductor spending in 2022 from that in 2021.”

All top ten companies in 2021 remained in 2022, with Apple and Samsung Electronics retaining the top two spots. Only Samsung Electronics and Sony increased their chip spending in 2022.

Gartner says Apple remained at the top of the semiconductor spending customer ranking for the fourth year in a row. The company decreased spending on computing microprocessing units by 11.7% due to the continuous shift to having its own in-house-designed application processors. However, Apple increased spending on non-memory chips by 2.8%.

Read Also:  Computer chips - from shortage to oversupply

Samsung Electronics increased chip spending by 2.2% and retained the second position. 

“The company gained more market share in the smartphone market due to its leadership in foldable phones, as well as benefiting from the zero-COVID policy in China, which affected its competitors, leading to an increase in spending on semiconductors in 2022.”

Sony showed the fastest growth in chip spending in 2022 due to sustained global consumer interest in PlayStation 5 video game consoles. 

“However, production volume could not be raised to meet the level of demand, due to continued serious chip shortages and disruption of logistic networks throughout the year.”

Read Also:  Euro 15 billion in European plan to fight shortage of computer chips

Moonshot News is an independent European news website for all IT, Media and Advertising professionals, powered by women and with a focus on driving the narrative for diversity, inclusion and gender equality in the industry.

Our mission is to provide top and unbiased information for all professionals and to make sure that women get their fair share of voice in the news and in the spotlight!

We produce original content, news articles, a curated calendar of industry events and a database of women IT, Media and Advertising associations.

    Do you want an experienced opinion on a job issue?
    Moonshot Manager is here to answer!

      Moonshot community sharing thoughts and ideas, in a anonymous, safe environment.