The semiconductor chip market is a very lucrative one and Intel has been in command of it for decades now. Since 1992, Intel has been the world’s biggest chip maker. For 25 years, Intel was able to maintain itself in the top spot and make its semiconductor chips omnipresent in the PC market. With years, the market has expanded with huge demand in the mobile sector. There has been an explosion in demand for memory chips for mobile devices of all kind. Samsung has been able to take advantage of this development to fight Intel and become world’s biggest chip maker. It is important to note that, Samsung being first does not mean Intel is out of the game. The semiconductor chipset market is huge and is growing rapidly. According to Gartner, the global chipset market grew by 22% in 2017, thus, there is room for competition.
Samsung becomes world’s biggest chip maker
Samsung already beat Intel last year in quaterly reports but the final blow was dealt with the release of 2017 financial reports. Samsung’s chipset business made a total revenue of about $69.1 billion while Intel had reported a $62.8 billion revenue. This was enough to make Samsung world’s biggest chip maker. A study by Gartner showed that Samsung occupied about 14.6% of the semiconductor chip market in 2017. Following up closely, Intel controlled about 13.8% of the chipset market. This difference may not seem much, but given that global semiconductor business was valued at $419 billion in 2017, a difference of just 0.5% represents billions of dollars. Gartner predicts a 7.5% growth for the sector in 2018 to reach $451 billion. Memory chips (DRAM, NAND) were a major contributor to the the semiconductor chips market. They represented more than half of semiconductor revenue growth in 2017.
Memory chip price greatly increased last year due to shortage in supply. This played well for Samsung as it main focus in the semiconductor chipset business is on memory and flash storage. For a long time, Intel has concentrated its efforts on processors especially for PCs. In this category, we note that Intel remains a strong leader. However, the mobile chipset market is now bigger and more lucrative and demand is soaring. Thus Samsung becomes world’s biggest chip maker in terms of revenue. The South Korean giant is only consolidating its leadership in the electronics industry. Just as Intel has succeeded in making its CPUs omnipresent in the PC market, almost any mobile device (phones, tablets) today carries a Samsung chip.
What next ?
Being now world’s biggest chip maker, the immediate goal for Samsung is the long term retention of this status. For this, Samsung has plans to expand its chip business to other rapidely developing markets. One of the main focus is on cloud services, where memory is in high demand for cloud servers. There is also the demand of chips for automotive electronics and AI ad others. With this, Samsung is set to battle for its new dominant position in the semiconductor market. While it may seem normal or easy for Samsung to be World’s biggest chip maker, it has not been an easy job. Though Samsung is among the top two smartphone vendors in the world and is also a leader in the consumer electronics market, there is fierce competition in the chipset market. Apart from intel, we have Qualcomm, AMD, and other also fighting for market share.
Samsung is a very big company, weighing in about one-fifth of South Korea’s economy. While its electronics division (Samsung electronics) is most widely known, the Company has businesses in many different sectors. In fact Apple, Google, Microsoft mostly compete with Samsung electronics only. This is to say Samsung is a huge company.