Microsoft Set To Become One Of The Top Chip Buyers After The Nokia Deal

Semiconductors are not exactly the type of things one would associate with Microsoft. Though technically the company bought oodles and oodles of microchips for its Xbox console, it was not really enough to break into the top ranks.

All that is set to change once the Nokia deal is approved by the concerned regulatory authorities.

With this acquisition, Microsoft is set to break into the worldwide top ten of original equipment manufacturers (OEM) that buy semiconductors. According to the semiconductor design and spend analysis service at IHS, Microsoft is on track to become the 8th largest chip buyer in 2014.

This year Redmond ranked in at the 13th position, up from 15th place in 2012.

The Nokia buyout is expected to add around $2 billion to what Microsoft is about to spend on semiconductors in 2014. Redmond had a bill of $3.55 billion in 2012, which was bumped to $3.78 billion this year, but will hover at an estimated $5.9 billion next year.

Much of Microsoft’s chip purchasing in the past few years was related to the Xbox 360 console, though the technology titan also bought a small amount for its Surface lineup of tablets.

However the purchase of Nokia will not add to Microsoft’s revenue this year. The numbers are only set to increase by 10 percent next year. And while the revenue growth will continue, the company has stated that the acquisition will not yield profits until 2016.

This is when the net income generated by the deal will offset the acquisition and integration costs.

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