Samsung Poised to Overtake Intel as World’s Largest Chip Make
Samsung makes and sells a phenomenal number of phones, computers, and other electronics. However, many devices that don’t bear the Samsung brand still have parts manufactured by Samsung in them. According to analysts, this fact is set to push Samsung past Intel to make it the world’s largest chip maker.
Intel claimed this crown in the early 1990s by dethroning NEC, and has remained in the lead ever since. This is when Intel released the original Pentium CPU, which made its way into all the top-of-the-line PCs of the day. Now, market research firm IC Insights says a quarter century of being the top dog is coming to an end. It predicts that Samsung‘s chip sales are expected to top Intel’s in the second quarter of this year, $14.6 billion to $14.4 billion. Both companies are on track to pull in about $60-70 billion from semiconductor sales in 2017. Intel might be running neck and neck right now, but the trends that have propelled Samsung ahead are not slowing down.
There are several reasons for this change, and perhaps most prominent is the rapid adoption of mobile devices around the world. People buy fewer computers, and they keep them longer when they do. Smartphones need DRAM chips, and Samsung makes a lot of those. Many smartphones have Samsung DRAM, and the same goes for the NAND flash storage. Even on desktops and laptops, the way we store data has changed. Spinning drives are still larger, but SSDs (many with Samsung NAND chips) are getting larger and less expensive. Most new PCs have SSDs instead of spinning drives.
There’s also the possible influence of different processor designs in mobile devices. Intel has tried and failed to adapt its designs to smartphones and wearable devices. It has been unable to compete on price and performance with the chips produced by Samsung and others based on the ARM architecture. Samsung designs its own ARM-based systems-on-a-chip under the Exynos brand, but it also manufactures the SoCs used by many other firms including Apple. However, there are other competitive SoC manufacturers including TSMC.
Not only is Samsung selling a lot of DRAM and NAND chips, it’s able to charge more for them. Consumers in China are buying up mobile devices faster than ever, and that means companies can charge more for the chips in those phones. If memory prices falter, Samsung could fall behind Intel again. If they keep going up, Samsung could leave Intel in the dust.