Samsung May Displace Intel to Become World’s Most Profitable Chip Maker
Intel is currently the market leader in the semiconductor business and has dominated the industry for more than two decades with its wide range of offerings. However, Samsung has recently been catching up thanks to the strong performance of its semiconductor business. Now, according to a new report, Samsung may soon replace Intel to become the world’s most profitable chip making company.
According to the research firm, IC Insights, Samsung will likely displace its US-based rival Intel as the company’s chip business is expected to register a record-break revenue in the second quarter. As per the report, Intel’s revenue from chip sales is expected to remain around $14.4 billion in the second quarter. Meanwhile, Samsung is expected to post $14.6 billion in revenue for the same period, thus taking the first spot from Intel to become the world’s most profitable chip making company.
The report cites increasing demand and rising prices in memory markets as the key factor to drive Samsung’s chip business revenue in the second quarter. Due to strong global demand for premium and high-performance smartphones, prices for memory chips, DRAM and NAND flash are expected to rise by 39% and 25%, respectively, the report notes.
“If memory market prices continue to hold or increase through the second quarter and the balance of this year, Samsung could charge into the top spot and displace Intel, which has held the No. 1 ranking since 1993,” predict Bill McClean, president of the market research firm IC Insights.
In the first quarter, Intel was still on top with its $14.2 billion in revenue, while Samsung was second with $13.5 billion in sales. Intel has remained in the top spot in the chip market since the introduction of its Pentium series of processors back in 1993. Should the shift happen and Samsung becomes the most profitable business in the semiconductor space, Intel will lose its top position for the first time ever in the last 24 years.
Samsung’s chip business was also one of the top contributors in its first quarter’s earnings. The chip business recorded $5.5 billion in operating profits, accounting more than half of the total operating revenue of the company.
Source: The Korea Herald
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