Samsung may overtake Intel as top IC maker

SANTA CLARA: South Korean Samsung Electronics is well on its way to overtaking Intel Corp in semiconductor revenues. This is based on Samsung’s broad base of semiconductor product offerings and expansion plans.

An analyst in the industry says that it is quite likely that Samsung will be the top chip vendor by the middle of this decade.

Market research firm IC Insights Inc has backed up this projection that although the idea of Samsung being at the same level as Intel might have been hard to believe a few years ago, the company’s IC revenues in the recent past have been growing at a compound annual growth rate (CAGR) of 13.5 percent from 1999 through 2009, said Cellular News.

Intel’s CAGR for the same time period has slowed to 3.4 percent. Based on these figures, it is possible to think that Samsung would pass Intel in semiconductor sales in 2014, said the firm.

For decades Intel has been ruling the semiconductor market, thanks to its position as the dominant provider of microprocessors. Samsung has been occupying the second spot for several years now, and leads in the area of DRAM and NAND flash memory, Samsung has been a major player in microcontrollers and is currently expanding its efforts in the spheres of microprocessors, wireless communication chips and foundry services. Notably, in Semiconductor capital expenditure, Samsung has spent more in the past six years than any chip vendor, including Intel.

There had been no open rivalry between the companies for years, but of late there are clashes in the areas of NAND flash for non-volatile storage and microprocessors in handheld devices, IC Insights said. Intel now directly competes with Samsung in NAND flash memories through its IM Flash joint venture with Micron Technology Inc. In the past five years, Samsung has become a major supplier of application processors based on cores licensed from ARM, in which area it now competes with Intel's Atom processors in new smartphone designs, the firm said.

IC Insights says that there is a fair chance that by 2014-2015, Samsung will become the No. 1 chip vendor. The projection is based on IC Insights' five-year forecasts, and an assumption that Intel will not significantly expand the scope of its IC businesses through a major acquisition.