Samsung’s semiconductor revenues rose at a CAGR 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.
This raises the intriguing prospect of whether Intel can now match Texas Instruments’ record of 25 years in the No.1 spot from 1959 to 1984.
Intel became the world chip No.1 in 1991 and will achieve its quarter century as No.1 only if it can hang on in that position until 2016.
IC Insights points out that 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 nonmemory 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).
In 1998, there was about a 5x difference in semiconductor sales between Intel and
Samsung ($22.8bn vs $4.5bn). Then, in 2000, the sales gap between the two companies decreased to about 3x or 180% ($29.7bn vs $10.6bn) 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%.
In 2009, Samsung was the leading supplier of DRAM, SRAM, and flash memory devices, was ranked No.3 in MCUs (No.2 now since the merger of NEC and Renesas in 1H10), ranked No.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 now 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 widely rumored to be aggressively looking to acquire companies or IC operations that are supplying RF devices, baseband processors, and power management products to cellphone handset makers (including Infineon's prized wireless business).
Source : www.electronicsweekly.com
