Samsung pips Intel to become top semiconductor player globally

Last Updated: Thu, Jan 04, 2018 16:30 hrs
The logo of Samsung Electronics is seen at its office building in Seoul

New Delhi: With 14.6 per cent market share, Samsung Electronics has replaced chip maker giant Intel to become the top player in the global semiconductor industry in 2017, market research firm Gartner said on Thursday.

This is the first time Intel has been toppled since 1992 as worldwide semiconductor revenue totalled $419.7 billion in 2017 -- a 22.2 per cent increase from 2016.

"The largest memory supplier, Samsung Electronics, gained the most market share with 52.6 per cent growth in revenue and took the No. 1 position from Intel. Memory accounted for more than two-thirds of all semiconductor revenue growth in 2017 and became the largest semiconductor category," said Andrew Norwood, Research Vice President at Gartner.

Intel revenue grew 6.7 per cent in 2017 -- driven by 6 per cent growth in data centre processor revenue owing to growing demand from Cloud and communications service providers.

Intel's PC processor revenue grew more slowly at 1.9 per cent but average PC prices are on the rise again after years of decline following the market's shift from traditional desktops.

Undersupply helped drive 64 per cent revenue growth in the memory market, which accounted for 31 per cent of total semiconductor revenue last year, Gartner said.

The key driver behind the booming memory revenue was higher prices due to a supply shortage.

"NAND flash prices increased year over year for the first time ever, up 17 per cent, while DRAM prices rose 44 percent," the report said.

Equipment companies could not absorb these price increases and so passed them onto consumers, making everything from PCs to smartphones more expensive in 2017.

Other major memory vendors, including SK Hynix and Micron Technology, also performed strongly in 2017.

The current rankings may not last long, however, "Samsung's lead is literally built on sand, in the form of memory silicon," said Norwood.

"Memory pricing will weaken in 2018, initially for NAND flash and then DRAM in 2019 as China increases its memory production capacity. We then expect Samsung to lose a lot of the revenue gains it has made," he added.

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