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elctrnx_lyf
Samsung could overtake the Intel only if they can make a challenging application ...
resistion
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IC rankings show Samsung gaining on Intel
Dylan McGrath
12/8/2010 1:11 PM EST
SAN FRANCISCO—As expected, Intel Corp. will retain its No. 1 position in semiconductor sales for the 19th consecutive year in 2010, though the Santa Clara, Calif.-based giant's share of global chip sales is expected to decrease slightly to 13.8 percent from 14.2 percent in 2009, according to market research firm Gartner Inc.
Intel's sales are projected to grow 24.6 percent this year to $41.4 billion, according to Gartner (Stamford, Conn.), below the overall chip industry's projected 31.5 percent growth from a dismal 2009. Meanwhile, No. 2 player Samsung Electronics Co. Ltd.'s chip sales are projected to grow 60 percent this year to nearly $28.3 billion, according to Gartner. Samsung's share of overall chip sales is expected to grow to 9.4 percent this year from 7.9 percent last year, according to the firm.
Gartner's estimates show the continuation of a trend in recent years whereby Samsung's chip sales have been growing faster than Intel's. In August, market research firm IC Insights Inc. illustrated the trend, saying Samsung's chip sales grew at a compound annual growth rate (CAGR) of 13.5 percent from 1999 to 2009, while Intel's grew by a 3.4 percent CAGR over the same period. IC Insights (Scottsdale, Ariz.) said Samsung is likely to overtake Intel in overall chip sales by the 2014 to 2015 timeframe.
Intel and Samsung have little competitive overlap. Intel is the dominant supplier of microprocessors, with market share of around 85 percent. Samsung is the leader in DRAM and NAND flash memory, a major player in microcontrollers and is expanding its efforts in microprocessors, wireless communication chips and foundry services.
After contracting in 2009, the chip market has bounced back in 2010 for growth that is estimated to be 31.5 percent, Gartner said. Overall chip market revenue will cross the milestone $300 billion mark this year, hitting $300.3 billion, according to Gartner. The year will be the fourth on record in which the semiconductor market grew by more than 30 percent in one year—joining 1988, 1995 and 2000, according to Gartner.
Gartner's 2010 market growth estimate is consistent with rivals iSuppli Corp., which projects 32 percent growth in 2010, and VLSI Research Inc., which predicts 30.9 percent growth.
Stephan Ohr, semiconductor research director at Gartner, said the 2010 chip market was driven by pent-up demand as system makers scrambled against depleted inventories to obtain parts. This prompted chip makers, including both foundries and IDMs, to scramble to put new capacity in place, Ohr said.
"With slowing demand and a weakening consumer confidence in the third quarter, lead times are coming down and inventories are slowly starting to build," Ohr said. "Still, semiconductor vendors are working on fulfilling backlog orders, and 2010 will go on record as a banner year for the semiconductor industry."
Intel saw strong growth in the first half of 2010 as the PC market stocked up inventory in anticipation of a strong second half of the year, but third quarter growth weakened as consumer sentiment began to flag, Gartner said. Sales of netbooks—a segment in which Intel is practically the exclusive supplier—were particularly disappointing, Gartner said.
Intel's sales are projected to grow 24.6 percent this year to $41.4 billion, according to Gartner (Stamford, Conn.), below the overall chip industry's projected 31.5 percent growth from a dismal 2009. Meanwhile, No. 2 player Samsung Electronics Co. Ltd.'s chip sales are projected to grow 60 percent this year to nearly $28.3 billion, according to Gartner. Samsung's share of overall chip sales is expected to grow to 9.4 percent this year from 7.9 percent last year, according to the firm.
Gartner's estimates show the continuation of a trend in recent years whereby Samsung's chip sales have been growing faster than Intel's. In August, market research firm IC Insights Inc. illustrated the trend, saying Samsung's chip sales grew at a compound annual growth rate (CAGR) of 13.5 percent from 1999 to 2009, while Intel's grew by a 3.4 percent CAGR over the same period. IC Insights (Scottsdale, Ariz.) said Samsung is likely to overtake Intel in overall chip sales by the 2014 to 2015 timeframe.
Intel and Samsung have little competitive overlap. Intel is the dominant supplier of microprocessors, with market share of around 85 percent. Samsung is the leader in DRAM and NAND flash memory, a major player in microcontrollers and is expanding its efforts in microprocessors, wireless communication chips and foundry services.
After contracting in 2009, the chip market has bounced back in 2010 for growth that is estimated to be 31.5 percent, Gartner said. Overall chip market revenue will cross the milestone $300 billion mark this year, hitting $300.3 billion, according to Gartner. The year will be the fourth on record in which the semiconductor market grew by more than 30 percent in one year—joining 1988, 1995 and 2000, according to Gartner.
Gartner's 2010 market growth estimate is consistent with rivals iSuppli Corp., which projects 32 percent growth in 2010, and VLSI Research Inc., which predicts 30.9 percent growth.
Stephan Ohr, semiconductor research director at Gartner, said the 2010 chip market was driven by pent-up demand as system makers scrambled against depleted inventories to obtain parts. This prompted chip makers, including both foundries and IDMs, to scramble to put new capacity in place, Ohr said.
"With slowing demand and a weakening consumer confidence in the third quarter, lead times are coming down and inventories are slowly starting to build," Ohr said. "Still, semiconductor vendors are working on fulfilling backlog orders, and 2010 will go on record as a banner year for the semiconductor industry."
Intel saw strong growth in the first half of 2010 as the PC market stocked up inventory in anticipation of a strong second half of the year, but third quarter growth weakened as consumer sentiment began to flag, Gartner said. Sales of netbooks—a segment in which Intel is practically the exclusive supplier—were particularly disappointing, Gartner said.
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KB3001
12/8/2010 1:32 PM EST
Do you agree that Samsung will overtake Intel by 2014-2015 or is it too early to say? After all the semiconductor industry is going through an inflexion point where a plethora of new technologies, materials and processes are being touted around.
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ankit karnawat
12/9/2010 6:25 AM EST
no, no way it can't be possible due to the repo of intel across the world. it will easily grab the season.
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dylan.mcgrath
12/8/2010 1:42 PM EST
The trend line is very clear, but I personally don't see it happening that quickly. I do believe that unless something changes dramatically Samsung will be No. 1 in the not-to-distant future.
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Dr Consumer Electronics
12/8/2010 1:55 PM EST
Intel needs to think beyond PCs.
Loose Tablets market, Loose cell phone market, Loose TV market.
Limit your self to Laptop/high-end servers, and manufacturing
With Volume TSMC and Smasung will clean the fabs..and innovate to the next level.
Just like IBM manin frames could not water fall to PCS, PCs cannot waterfall to consumer devices..
Hope someone in Intel is thinking....
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Sheetal.Pandey
12/8/2010 3:17 PM EST
Samsung's predominant sale is in memories and Intel's strenth is microprocessors. I would doubt if Samsung can overtake intel. They might come close but Intel would always lead unless Samsung really do wonders in microprocessor area.
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KB3001
12/8/2010 6:30 PM EST
high end microprocessors to be precise, and the market for that is not growing greatly. I think Samsung is probably going to overtake Intel but a wee bit later than IC Insights suggest.
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t.alex
12/9/2010 3:16 AM EST
Samsung is doing much ARM core. With the growing mobile and tablet markets, it might happen that Samsung will overtake Intel soon.
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Kaiser Silicon
12/8/2010 4:11 PM EST
The biggest thing is that Intel is upgrading fabs, but not building new fabs. Samsung, by contrast, is building new fabs. Intel is doing crazy things like stock buybacks and large dividends. Intel is getting to where it reminds me a lot of GM. I wish Intel would go back to the build a new fab a year mantra rain or shine.
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Lionlair
12/8/2010 5:46 PM EST
Remember the old fabs would be not used at all unless updated. The materials within are often mixed some go some stay. Some are pilot lines and some are mature lights out. Some are pushing the edge of technology proving a section of tech or ability and quality. Once checked out BAM!
A single older 13" wafer will handle 2x or 4x or more die as the process changes. Martin
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Etmax
12/8/2010 9:56 PM EST
EETimes, please do a better job of editing your articles for spelling and grammar, set an example. :-)
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jackOfManyTrades
12/9/2010 3:10 AM EST
"EETimes, please do a better job of editing your articles for spelling and grammar, set an example."
EETimes, please do a better job of editing your articles for spelling and grammar. Set an example.
or
EETimes, please do a better job of editing your articles for spelling and grammar; set an example.
Please do a better job of editing your posts.
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jackOfManyTrades
12/9/2010 3:11 AM EST
EETimes, please leave the newlines in my posts! :-)
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Code Monkey
12/9/2010 12:29 PM EST
The "Others" category beats Intel by 4:1. This tells me there is a lot of diversity in the chip business. That's good.
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iniewski
12/9/2010 2:01 PM EST
Samsung's business is more diversified than Intel's as Intel historically has not been successful to grow beyond microprocessors despite many attempts...so Samsung will likely overtake Intel but I don't think it will happen as quickly as the article states...Kris
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t.alex
12/9/2010 8:18 PM EST
Nevetheless, there is some downside for diversified businesses. Some might be making losses and have to be covered by others.
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jimcondon
12/9/2010 9:38 PM EST
I wonder how Intel's push in the mobile market with Atom and purchasing Infineon's Wireless Solutions will help them. I would think this would help them hold off Samsung by riding a rapidly growing market.
Of course, sometimes I think we over think the importance of some of these statistics. If they are #2, over 25% profitable, and making over 2 billion dollars a year, is that really bad? I think my company would take that.
It's not like they are staying stagnant and not innovating. They are pushing in mobile with the Atom. They are innovating in the CE market with Google and Sony on the GoogleTV products. If Samsung does over take them, I think it's just a bounty of riches for the industry.
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Charles.Desassure
12/10/2010 10:52 AM EST
Thanks for this article. Very good for Samsung, they are gaining on Intel…and? Intel is during very well and I am sure they will come up with another marketing campaign to continue the outstanding work that they have started. Intel is like Microsoft, they have a strong computer user base. If Samsung doesn’t continues to make the gain that they did this year, I wonder if someone is going to do research on how Samsung continues to fall behind Intel. The pie in this area is big enough for both Samsung and Intel.
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resistion
12/11/2010 12:46 PM EST
And remember the mind-boggling capex. Un-emulated support from national government.
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elctrnx_lyf
12/13/2010 12:35 PM EST
Samsung could overtake the Intel only if they can make a challenging application processors that can be actually used by other OEM’s to make the smart phones or tablets. With the recent investment by Intel in the wireless technology the overall sales by Intel will go up in the future. The Atom series processors are also making really good progress and we will see lot of low power embedded systems will use these processors.
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