Intel may lose the silicon revenue crown to Samsung


— 1:00 PM on July 6, 2017

A number of outlets are reporting that analysts expect Samsung to overtake Intel as the world's largest manufacturer of silicon chips by revenue, in anticipation of the company's financial statements for the second quarter of 2017. Intel has dominated the number one position among chipmakers since the early 1990s, but increased demand for DRAM and NAND storage chips may push Samsung past Intel for the first time ever.

Demand for memory and storage chips has exploded as datacenters and mobile devices have become centers of growth and demand for PCs has generally declined. Samsung manufactures those memory and flash chips, in addition to SoCs used in its own mobile devices and custom parts for third parties like Apple. The Motley Fool cites investment bank Nomura as a source for a claim that Samsung sold $15.1 billion worth of chips in the past three months, compared to a figure of $14.4 billion for Intel in the same period. Furthermore, the website says that Samsung's chip division will roll up $25.8 billion in operating profit over the entire year, 65% more than Intel's expected profit of $17.1 billion.

Intel does not manufacture commodity DRAM chips, but it does produce NAND flash and the 3D Xpoint chips used in its Optane consumer caching products and datacenter SSDs. Even so, the company remains a relatively minor player in flash storage chips. Samsung, Toshiba, Western Digital, and partner Micron all move more NAND than Intel.

Although Intel still has the vast majority of the client PC and server processor markets to itself, x86 has never gotten a foothold in phones and tablets (though Intel has had more success recently with cellular modems). Nvidia's GPU compute hardware and Google's Tensor Processor Units pose a new threat to Intel in the data center, although the blue team's Xeon Phi chips might prove a way to turn some of the deep learning tide in its favor. The company's practical monopoly on server processors may also be under siege now that AMD has fired up its Epyc server platform, as well. Likewise, ARM is also preparing a server play.

Intel's IoT division has grown recently, but remains a small contributor to the company's revenue stream. The company's purchase of MobilEye in May suggests that the company sees a place for itself in the hot autonomous vehicle intelligence market. It remains to be seen whether Intel's continuing transition away from the PC will allow it to remain the chipmaking king.

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