After over 20 years of stasis in the pecking order of IC manufacturing revenues, it looks like Samsung’s remarkable rise in performance of late might see the company overtake current leader Intel as soon as 2014. A combination of data from IC Insights’ Strategic Reviews Online database of worldwide semiconductor companies and the McClean Report 2010 Mid-Year Update’s five-year market forecasts suggest that Samsung’s current revenue growth, if maintained at its current rate, will overtake that of Intel, replacing the long-serving industry leader.
Samsung Electronics’ rise to the top is being spurred by the company’s semiconductor revenue rise of 13.5% CAGR from 1999-2009. In comparison, Intel has seen relatively low revenue CAGR of 3.4% for the same timeframe. If Samsung continues with this growth rate, IC insights’ data suggests that the company will overtake Intel in semiconductor sales in 2014.
Samsung’s strategy has been to concentrate on aggressively increasing its market share in the DRAM sector, responding to the growth in PC sales by expanding its flash memory sales
efforts. Non-memory segments have also expanded, with increased focus being placed on development and sales of microcontrollers, IC foundry services and CMOS image sensors.
While Intel’s focus has been firmly set on microprocessor and chipset sales for the in PC and server markets, the company’s plan is to turn more toward the consumer, cellphone and embedded-computing realms using its low-cost Atom processor architecture.
Nevertheless, the competition in NAND flash continues. Samsung has ploughed more investment into its IC capital expenditure than any other IC manufacturer over the past few years, and its ARM-licensed application processors are serving as direct competitors for Intel’s Atom processors in new so-called ‘smartphones’. On the other hand, Intel’s IM Flash joint venture with Micron Technology has bolstered its NAND flash memory revenues.
If IC Insights’ projections are correct, Samsung will continue to rise in the core memory markets (see graph, right). There also seems to be a possibility that Intel will venture deeper into the wireless IC sector via an acquisition, and it’s no secret that the company’s scope for R&D is huge. IC Insights says that Intel spent more on R&D in 2006-2009 than on capital expenditures, a scenario that is likely to continue through 2010.
A swap in positions on the IC manufacturers’ revenue scale will surely shake up the industry, and could very well lead to more competitive pricing, especially in the all-important flash memory sector.