Tuesday, October 21, 2014
Search
  
Monday, August 30, 2010
 Samsung Poised to Overtake Intel as Largest Semiconductor Maker Leader in DRAM by 2014
You are sending an email that contains the article
and a private message for your recipient(s).
Your Name:
Your e-mail: * Required!
Recipient (e-mail): *
Subject: *
Introductory Message:
HTML/Text
(Photo: Yes/No)
(At the moment, only Text is allowed...)
 
Message Text: As preposterous as it might have seemed 5-10 years ago, Samsung Electronics is on track to catch up with Intel in terms of total annual revenues for semiconductors and will most likely become the world's largest IC maker before the middle of this decade.

The prospect of Samsung overtaking Intel can be seen in analysis of data contained in IC Insights' Strategic Reviews Online database of worldwide semiconductor companies and the five-year market forecasts in the McClean Report 2010 Mid-Year Update.

Samsung, the world's largest memory IC supplier, has seen its semiconductor revenues rise at compound annual growth rate of 13.5% from 1999-2009, while Intel's sales have increased at a CAGR of just 3.4% in the same period. Extrapolating these growth rates, Samsung would pass Intel in semiconductor sales in 2014!

Samsung has managed to exceed Intel's growth rate by aggressively increasing its marketshare in DRAMs as the PC market has grown and by taking the lead in flash memory sales, but it's also expanding in non-memory segments, including microcontrollers, application processors for cellphones and portable systems, CMOS image sensors, and IC foundry services. For decades, Intel's growth has been primarily hitched to microprocessor and chipset sales in PC and server markets, but the company is now aiming to expand its business into consumer, cellphones, and embedded-computing applications with new system-on-chip designed based on its low-cost Atom processor architecture.

For the most part of the past two decades, the IC industry's two largest companies have coexisted, expanding without competing directly with each other, but increasingly these semiconductor titans are clashing in NAND flash for non-volatile storage and microprocessors in handheld devices. Intel now competes head-on with Samsung in NAND flash memories through its IM Flash joint venture with Micron Technology. In the past five years, Samsung has become a major supplier of application processors based on cores licensed from ARM, which now compete with Intel's Atom processors in new smartphone designs. It cannot go unnoticed that Samsung has spent more on semiconductor capital expenditures than any other supplier, including Intel, in six of the past seven years (2004-2010F).

Figure 1 shows that in 1998, there was about a 5x difference in semiconductor sales between Intel and Samsung ($22.8B vs $4.5B). Then, in 2000, the sales gap between the two companies decreased to about 3x or 180% ($29.7B vs $10.6B) when DRAM average selling prices jumped due to the increased amount of memory required to adequately run Microsoft's Windows 98 and XP operating systems on PCs, built with Intel's Pentium III processors. With few exceptions, the difference in semiconductor sales has dwindled since then and, in 1H10, stood at 27%, as seen in Figure 1.



In 2009, Samsung was the leading supplier of DRAM, SRAM, and flash memory devices, was ranked #3 in MCUs (#2 now since the merger of NEC and Renesas in 1H10), ranked #3 in sales of CMOS image sensors, and was a top supplier of several other integrated circuit devices. Furthermore, it has allocated significant resources to boost its ARM-based MPU business, and is upgrading its foundry business to be a leading competitor in that arena as well. IC Insights believes there is a greater than 50% chance that Samsung will move up from No. 2 and become the world's largest semiconductor supplier in the 2014-2015 timeframe. This projection is based on IC Insights' five-year forecasts, which show no major downturn in Samsung's core memory markets, and an assumption that Intel will not significantly expand the scope of its IC businesses through a major acquisition?such as the purchase of a wireless IC operation that serves cellphones. However, it must be noted that Intel and Samsung are both aggressively looking to acquire companies or IC operations that are supplying RF devices, baseband processors, and power management products to cellphone handset makers. Intel today announced the acquisition of Infineon's prized wireless business, and this could change IC Insights' estimations and projections.

While acquisitions can be a factor in growth rates, Intel's ability to internally develop new technologies and businesses is significant. Intel remains the industry leader in R&D spending and, in fact, had a larger budget for R&D in 2006-2009 than it did for capital expenditures. The same is forecast to hold true in 2010. Intel's R&D expenditures have increased from slightly more than $5 billion in 2005 to a budget of $6.6 billion in 2010. Meanwhile, from 2005-2009, Samsung's R&D expenditures ranged from $1.5 billion to $2.5 billion less per year compared to Intel's R&D budget.
 
Home | News | All News | Reviews | Articles | Guides | Download | Expert Area | Forum | Site Info
Site best viewed at 1024x768+ - CDRINFO.COM 1998-2014 - All rights reserved -
Privacy policy - Contact Us .