Samsung's Chip Sales Leadership May be Fleeting

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/ 2018-04-27 / News

SAN FRANCISCO — Samsung Electronics' well-chronicled rise to the top of the heap in semiconductor sales last year, dethroning Intel after a quarter century, may be short lived, analysts say.


Samsung's sold $59.9 billion worth of chips in 2017, more than $1 billion more than second place Intel. But with the booming memory market bound to come back down to earth, Samsung could find itself back in the familiar position of playing second fiddle to Intel very soon.


Market research firm Gartner said Tuesday (April 24) that the memory market boom that has propelled Samsung — as well as the broader semiconductor industry — to new heights over the past two years could turn sour as soon as late next year. When it does, Samsung's reign as the top chip supplier is more than likely to end, Gartner (Stamford, Conn.) said.


Roughly 80 percent of Samsung's 2017 semiconductor sales — including foundry sales — came from memory products, according to Bill McClean, president of IC Insights, another market research firm. McClean estimates that Samsung's lead over Intel last year — including foundry sales for both companies — was roughly $4.1 billion. Even if Samsung's memory sales declined by just 10 percent, the company's lead over Intel would evaporate, McClean said in an email exchange with EE Times.   


"The bottom line is, at this point, Samsung's No. 1 ranking would definitely be in question if the memory market encounters a significant downturn," McClean said.


Total memory sales surged by some 61.8 percent in 2017, reaching $130 billion, according to Gartner. Samsung's memory revenue alone increased by nearly $20 billion last year, Gartner estimated.


Memory market growth overshadowed strong growth in other chip categories in 2017, according to Gartner. Sales of non-memory chips increased by by 9.3 percent — or $24.8 billion — to reach $290 billion, according to the firm.


Gartner estimates that the combined revenue of the top 10 semiconductor vendors increased by 30.6 percent during 2017 and accounted for 58 percent of the total market, outperforming milder 11 percent growth by the rest of the market.


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— Dylan McGrath is the editor-in-chief of EE Times.


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