Intel takes back chip ‘throne’ from Samsung

Intel had the highest revenue in 2019, about $ 65.8 billion. It was followed by Samsung Electronics with  $ 52.2 billion. South Korea’s SK Hynix and Micron Technology Inc. in the semiconductor sector had revenues of US $ 22.4 billion and US $ 20 billion respectively, ranking third and fourth.

Over the past years, South Korea’s Samsung Electronics and the United States Intel have become the two leading giants in the global semiconductor market, and Samsung has begun to steal Intel’s long-standing throne in the semiconductor market. However, according to the latest news from foreign media, the latest report from Gartner, a technology market research firm, claims that Intel will retake the top spot in the semiconductor market from Samsung in 2019.

According to foreign media reports, the Gartner report shows that last year, global semiconductor revenue was only about 418 billion US dollars, a decrease of 12% from 2018.

Intel had the highest revenue in 2019, about $ 65.8 billion, followed by Samsung Electronics’ $ 52.2 billion. South Korea’s SK Hynix and Micron Technology Inc. in the semiconductor sector had revenues of US $ 22.4 billion and US $ 20 billion respectively, ranking third and fourth.

Samsung Electronics became the world’s highest semiconductor semiconductor manufacturer for the first time in 2017 and 2018, thanks to unprecedented market demand for memory chips (Samsung is the world’s largest manufacturer of memory chips and flash memory chips). Helped Samsung achieve record profits in the third quarter of 2018.

However, starting in the fourth quarter of 2018, the memory chip market is facing a downturn, and the Korean technology giant’s annual operating profit in 2019 fell by 53% year-on-year. Among Samsung’s various businesses, its memory chip business experienced the largest decline during this period.

“The memory chip market, which accounts for 26.7% of semiconductor sales in 2019, is down 31.5% in 2019,” said Andrew Norwood, vice president of research at Gartner.

The analyst said: “In terms of memory chips, due to the oversupply from the end of 2018 and continuing into 2019, the revenue of memory chips has decreased by 37.5%. The oversupply is caused by the sudden drop in demand in the hyperscale market. This It shows that the inventory level of OEMs in the first half of the year is too high. In the second half of 2019, too many inventories of memory chip suppliers have depressed pricing, resulting in an average selling price drop of 47.4% in 2019. ”

Although Intel did regain the top spot, its chip revenue in 2019 also fell by about 1% year-on-year. Gartner pointed out that tight supply of CPUs for computers and servers and the sale of smartphone modem business to Apple were also the reasons for the slight decline in revenue.

Earlier, Intel has been supplying modems to Apple smartphones, but its product performance has been alleged to be weaker than Qualcomm’s modems. In order to take care of Intel’s supplier, Apple has even limited the overall Internet speed of smartphones.

Apple is concerned that Intel’s 5G modems are immature, and the company signed a settlement agreement with Qualcomm, which has filed a lawsuit. Apple will continue to purchase Qualcomm modems. Subsequently, Intel announced that it would withdraw from the 5G modem business of smartphones, but Intel said it would still focus on non-mobile 5G modem business.

After Intel’s exit, Apple bought the business for $ 1 billion and merged into the company’s already existing 5G modem development team. However, it is not known when Apple’s own 5G modem will be used.

Gartner reports that last year, semiconductor companies focused on memory chips saw a sharp decline in revenue: Samsung was down 29% from 2018, Hynix was down 38%, and Micron Technology was down 33%.

Analyst Norwood said: “In 2020, we expect revenue in the semiconductor market to increase after high inventory is cleared to drive average chip selling prices, especially in the memory chip space.”

According to Gartner’s report, last year among the top five semiconductor companies in the world, Intel ranked first with 15.7% revenue share, and Samsung Electronics’ share was 12.5%.

Hynix gained a 5.4% share, Micron Technology was 4.8%, and Broadcom in the United States ranked fifth with a 3.7% share. The revenues of these three companies lag far behind the two giants Samsung and Intel.

The sixth to tenth semiconductor companies are Qualcomm, Texas Instruments, ST Microelectronics, Kioxia (that is, the former Toshiba memory chip company, a company established after Toshiba sold its flash memory chip business), and NXP.

Flash market

The memory chip market mainly includes memory and flash memory. Flash memory is mainly used in smartphones and computers, and can save data even after the power is turned off.

Gartner report shows that in 2019, the global flash memory market’s decline is lower than the overall memory chip market, and total corporate flash memory revenues fell by 23.1% due to rising inventory levels at the end of 2018, and weak demand in the first half of 2019 exacerbated this. Down.

In July 2019, the flash memory chip market began to stabilize, thanks to a power outage at a chip factory jointly owned by KIOXIA and Western Digital. The blackout has served as a catalyst for cleaning up supplier inventory, pushing prices from unsustainably low levels.

Gartner predicts that the recovery of flash memory chips will continue in 2020, as lower supply will not be able to meet flash memory demand from solid state drives and 5G smartphones.

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