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May 22, 2019

Samsung risks being toppled by Intel in chip sector

PUBLISHED : March 12, 2019 - 15:04

UPDATED : March 12, 2019 - 15:47

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The downturn in the DRAM market dealt a blow to Samsung Electronics in the October-December period last year, displacing the tech giant from the No. 1 position in the global semiconductor sector, according to a report published by market researcher IHS Markit on March 12.

Samsung’s semiconductor sales in the fourth quarter dropped 24.9 percent on-quarter to $15.9 billion in the three months, the report showed. Intel’s revenue fell 2.3 percent to $18.4 billion in the same period.




“Samsung has traditionally been far more dependent on memory chip sales than Intel, so when mobile handset sales slowed dramatically last year, so did the company’s sales,” said Ron Ellwanger, senior analyst for semiconductor manufacturing at IHS Markit.

Nearly 90 percent of Samsung’s entire chip revenue came from its memory chip business, according to the report, which showed that the overall semiconductor market declined 10.2 percent in the fourth quarter with all market applications and device segments shrinking.

Predicting that the memory market downturn will likely drag Samsung’s total semiconductor sales down this year, market research firm IC Insights said that the US chip company will likely post $70.6 billion in sales this year, exceeding Samsung’s $63.1 billion.

The last time the memory market was in a worse state was in the fourth quarter of 2008, at the height of the global financial crisis.

The Korean tech giant toppled Intel for the first time in 25 years in the third quarter of 2017 to become the world’s top chip manufacturer by sales. Since then, it has maintained its lead thanks to the skyrocketing demand for DRAM chips in the server and smartphone segments.

In 2018, Samsung’s annual sales reached $74.6 billion, up 20.3 percent on-year. Intel earned $69.9 billion, up 13.4 percent.

By Kim Young-won (wone0102@heraldcorp.com)

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