The latest semiconductor company rankings from IC insights for the first-half of 2010 show that with the strong performance from memory manufacturers and in particular segment leader Samsung, the gap between number one ranked, Intel and number 2 ranked Samsung has shrunk rapidly.
IC Insights noted that in 2009, Intel's semiconductor sales were 52% larger than Samsung's. However, in 2Q10, Intel's sales margin over Samsung was reduced by more than half, to only 21%!
With continued strong demand for memory IC’s and tight capacity ASP’s have remained at very profitable levels and could be several quarters or more before either demand softens or capacity increases that could see a meaningful impact on ASP’s.
Granted there have been some price declines, NAND flash has dipped about 10% in the second quarter but that is less than expected and before the peak sales quarter. Manufacturing cost reductions are also higher than these declines.
Intel on the other hand may have posted record quarterly results recently, but Q-on-Q revenue growth was only 4% and compared to Samsung’s 14% growth shows a rapid erosion of Intel’s once dominant position.
Therefore it has to be asked, could Samsung actually become the worlds largest semiconductor firm by revenue? Is this only a matter of when not if?