According to market research firm IHS iSuppli, in 2010, , an increase of 79.6% from the $9.7 billion it spent in 2009.
"'s surge to leadership in semiconductor spending in 2010 was driven by the overwhelming success of its wireless products, namely the and the ," said iSuppli analyst Wenlie Ye. "These products consume enormous quantities of NAND flash memory, which is also found in the Apple iPod. Because of this, Apple in 2010 was the world's No. 1 purchaser of NAND flash."
While Apple is also in the top five manufacturers that purchase microprocessors, it was NAND flash that propelled it into the top spot overall, Ye said. "For Apple, which right now spends 60% of its semiconductor purchasing budget on wireless products, processors take the passenger seat when compared to NAND flash. "
In 2010, HP lead the market in microprocessor purchases with $5.3 billion spent, followed by Dell with $4.2 billion and Apple with $2.5 billion.
NAND flash, which is used to make solid-state drives (SSDs), is a nonvolatile medium, meaning when it's powered off it continues to retain data, unlike DRAM.
Earlier this year, Apple's iPad was leading an almost five-fold surge in NAND flash memory use this year as consumers gobble up tablets in increasing numbers.
According to iSuppli, shipments of NAND for tablets show no sign of slowing down, and will hit a projected 12.3 exabytes of capacity shipped by 2014. When measured against the total supply of NAND flash, memory in tablets will represent 11.8% of the supply this year, up from a 4.3% in 2010. By 2014, tablet memory will represent 16% of all NAND flash.
Apple's ranking among equipment manufacturers to get to the number one spot. It surpassed HP in the U.S. and Samsung Electronics in South Korea, which had been no. 1 and no. 2, respectively.
In 2011 and beyond, Apple is likely to continue increasing its semiconductor spending at an above-average pace, allowing the company to extend its lead over HP and Samsung, iSuppli said. In 2011 Apple's semiconductor spending is expected to exceed that of HP by $7.5 billion, up from $2.4 billion in 2010.
While traditionally hot competitors, Apple and HP's consumption levels of NAND flash is an indication that the two companies are taking fundamentally different development paths, according to iSuppli.
Apple spent about 61% of its semiconductor budget in 2010 on wireless products such as the iPhone and iPad. In contrast, HP spent 82% of its semiconductor spending on computer products like desktops, notebooks and servers.
Ultimately, the NAND landscape appears to favor and tablets over computing-oriented products using a Windows/Intel platform, iSuppli indicated.
For example, the smartphone and tablet markets vastly outgrew the computer segment in 2010 compared to the previous year. Smartphone shipments in 2010 rose 62%, while tablets exploded by more than 900%, driven by the introduction of the first iPad. Global PC shipments grew by just 14.2% in 2010.
"Apple's strength in hardware sales lies in its device and media ecosystem -- very Apple product is connected through iTunes/iOS and is synergetic with all other Apple products," iSuppli said in its report. "As a result, committed users of the Apple ecosystem derive more value from each additional Apple device they buy, and users have little interest in leaving the Apple realm."
In other words, through a common ecosystem, Apple leverages each device to sell other devices.
By comparison, the traditional PC business does not put heavy emphasis on the creation of an ecosystem.
The iPad and Amazon's Kindle electronic reader are also expected to drive an 8% increase in the embedded NOR flash memory market. Because NOR allows random access to any memory location, it typically is used as read-only memory, as opposed to NAND flash, which is repeatedly erased and re-written to.
This year, shipments of NOR memory chips for embedded applications are , up from 3.64 billion units in 2010. NOR is expected to continue to grow 7% to 9% annually over the next four years, rising to 5.41 billion units shipping in 2015.
"The use of NOR flash memory in tablets and e-book readers now may represent a mere drop in the bucket compared to total embedded NOR demand," Ryan Chien, a researcher for memory and storage at iSuppli, said in a statement. "However, shipments for NOR for tablets and e-book readers are growing exponentially. In fact, the combined category for tablets and e-book readers will generate the highest sales growth for embedded NOR of any product in 2011 and the following years."
In the embedded NOR market, tablets and e-book readers this year will consume 80 million NOR chips, a 196% upswing from the 27 million units shipping in 2010, Chien said.
However, hard drives and computers will continue to dominate the , with shipments reaching 526 million units, or 13% of the market.
Other large embedded NOR markets include optical disk drives, with 333 million units or an 8% share; networking, with 277 million units or a 7% share; and TVs, with 245 million units or a 6% share.
Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at or subscribe to . His e-mail address is .