BENGALURU: Startups and small electronics companies spent $78.3 billion on semiconductors in 2014, representing 23 percent of the total market, compelling semiconductor companies to revisit their sales strategy to focus on the large number of smaller organizations than relying on big deals from large customers, research firm Gartner said.

Gartner estimates that there are more than 165,000 companies that buy semiconductor chips around the world: The top 10 spend nearly 40 percent of the total semiconductor revenue; the top 11 to 100 spend about 30 percent; and the remainder spend 30 percent.

Despite the top 10 accounting for such a large percentage of the market, some of the largest customers have decreased orders in the past five years, challenging the semiconductor vendors that mainly supplied to them. While Samsung and Apple have significantly increased orders in the same period due to success in the smartphone market, semiconductor vendors are concerned about the risk of relying on large customers such as these.

“The industry has seen some fairly significant disruption in recent years, which has highlighted the risks associated with semiconductor vendors putting all of their focus on a limited number of large customers, when small companies offer highly profitable and stable growth,” said Masatsune Yamaji, Principal Research Analyst at Gartner.

“To overcome the risk, some semiconductor vendors have tried to increase their business with small customers, while others are also realizing that they should adjust their strategies to do this.”

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