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Korea Times

Samsung to unseat Intel for chip crown

Forecasts show Intel will lose its place at the top of the computer chip market for the first time in 24 years

PUBLISHED : Monday, 03 July, 2017, 12:48pm
UPDATED : Monday, 03 July, 2017, 12:48pm

By Kang Seung-woo 

Samsung is expected to become the largest chipmaker in the world amid rising demand for memory chips, bringing to a halt Intel’s decades-long dominance in the semiconductor industry, according to market reports, Sunday.

Since Intel released the Pentium CPU for PCs in 1993, the U.S.-based company has dominated the market without losing the top spot. Back then, Samsung was the No. 7 player in the world.

According to a recent report by Japan’s Nomura Securities, Samsung is forecast to chalk up US$15.1 billion (17.2 trillion won) in chip sales for the second quarter of the year in comparison with Intel’s US$14.4 billion.

The Korean company is also expected to outpace its American rival in its full-year forecast — US$63.6 billion to US$60.5.

The Japanese brokerage house said surging demand for DRAM and solid state drives has led to a price hike, adding that the memory chip market has outgrown the CPU market.

DRAMs are used widely in personal computers and solid state drives are emerging as the replacement of hard disk drives.

The Nomura report is not the first market watcher to predict that Samsung could pass Intel in chip sales during the April-June period.

Industry tracker IC Insights said in May that Samsung, the world’s largest memory chipmaker, is expected to generate sales of US$14.94 billion against Intel’s US$14.4 billion.

“If memory market prices continue to hold or increase through the second quarter and the balance of this year, Samsung could charge into the top spot and displace Intel, which has held the Number one ranking since 1993,” IC Insights said at the time.

In the same month, NH Investment and Securities also said Samsung is likely to defeat Intel in the second quarter thanks to the mounting demand for data centers and solid state drives.

If Samsung nudges past Intel in chip sales, it would be another milestone in the history of the company, which launched the company’s semiconductor business in 1983 despite strong opposition.

Samsung founder Lee Byung-chul made the bold decision and made big investments in chips, prompting worries that the move might end up shutting the company down.

Chairman Lee Kun-hee, Lee Byung-chul’s third son, took charge of the group in 1987 and made a big bet on semiconductors. Based on his deep knowledge of high-tech businesses, he spearheaded preemptive moves.

Under his leadership, Samsung saw its rankings steadily rise in the global chip industry from the seventh in 1993 to fourth in 2000 and second in 2006.

Thereafter, it took more than a decade for Samsung to exceed Intel if market trackers are right in their second quarter estimates.

Read the original article at Korea Times