Intel may lose the silicon revenue crown to Samsung

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.

Comments closed
    • HERETIC
    • 3 years ago

    Am still surprised, that when Samsung started manufacturing GPU’s no one blinked.
    They might be world leaders in Ram and Nand, but GPU’s is like “coming to play with
    the big boys” To me it seemed a big thing, but no tech site did a article……………………

      • D@ Br@b($)!
      • 3 years ago

      Didn’t know that.
      Apparently already two years ago they postponed it until 2020. Now with Arm. Maybe in the future with AMD, thereafter on their own?
      Intel tried with Larrabee what supposedly didn’t work out because of mediocre software. They put the hardware into Xeon Phi.
      Must be hard indeed….

    • BerserkBen
    • 3 years ago

    YKWRGMG ? This story too many acronyms that I didn’t know, had to look up what “SoCs” and “IoT” meant. Must be the EOTWAWKI!

      • RAGEPRO
      • 3 years ago

      New to reading tech blogs? Welcome to TR! 🙂

        • just brew it!
        • 3 years ago

        He’s been registered here quite a bit longer than you. Maybe he’s just been away for a while… pulled a tech Rip Van Winkle?

          • RAGEPRO
          • 3 years ago

          Haha, fair enough. I didn’t even check, just making a crack at not knowing the absolutely ubiquitous SoC and IoT terms.

        • cegras
        • 3 years ago

        Standard practice in any scientific publication is to write the full name then abbreviate. Anandtech is guilty of word soup and I don’t see why the techreport (TR) needs to follow in its footsteps. Why make news harder to read than it has to be?

          • RAGEPRO
          • 3 years ago

          I mean, I hear you, but I don’t think using SoC or IoT a few times (or even in every other line really) makes an article “word soup”. There’s the matter of where you draw the line, because we can’t go around writing Double Data Rate 4 Space Optimized Dual Inline Memory Module (DDR4 SODIMM) every time we want to talk about laptop RAM. That’d probably be more confusing anyway. Some things are better known by their acronyms than by the expansion and I’d argue SoC and IoT are among those.

            • D@ Br@b($)!
            • 3 years ago

            LOL
            At long last nice to know what SO stands for, thx.

            • cegras
            • 3 years ago

            I agree with your example, but that’s quite the exception. Surely you don’t think writing out System-on-a-Chip or Internet of Things is tedious. I’ve seen many large media websites take the time to write them out.

            • D@ Br@b($)!
            • 3 years ago

            I get your point, surely when typing 100 WPM or more, but after a while the acronyms become common knowledge. Hell, even Jeremy Clarkson talked about IoT.

      • just brew it!
      • 3 years ago

      According to a list of acronyms on my employer’s intranet site, “IOT” can also stand for “IOT Operations Team”. 😉

    • the
    • 3 years ago

    Samsung maybe pushing out more chips based on raw revenue but they’re in the cut throat market of NAND and DRAM production. I’m really curious what profit Samsung’s chip business is capable of in that context.

    Intel as a processor manufacturer has plenty of room for healthy margins, especially given their [s<]insane[/s<] finely tuned product line up. They've expanded out with Altera, Optane memory technology and HPC parts with Xeon Phi/Omnipath. Their Knights Mill chips is due out this year for deep learning acceleration. This specialization is all relatively low volume compared to the consumer space but very profitable.

      • frenchy2k1
      • 3 years ago

      This was in the article, Samsung expects 25B of profit for the past 12 months.
      This is a change that was long in its making, but not really surprising.
      Samsung has been investing more than intel in semiconductor for years.
      This is the pay off.
      Their are the biggest DRAM *AND* NAND manufacturer, with a very flexible production line allowing them to balance production of both products (so they produce more of the product with better margins and can change production mix within a week).
      Their SoC business has been booming since their 14nm process, being very competitive and even taking some business from TSMC. Global Foundry also had to license Samsung’s 14nm process.

      So, don’t worry about their margins, they’re very healthy on a fairly lean company.

      Samsung has been hungry for 1st place for years and has invested appropriately to reach it. This is no real surprise for those that followed Semiconductors.

      • Arag0n
      • 3 years ago

      First is not true that samsung is not making any profit, but second, let me ask a question:

      You have company A and company B.
      – Company A manufactures 1.000.000 cars per year, sell the cars and makes 1 billion dollar profit.
      – Company B manufactures 10.000.000 cars per year, sell the cars and makes 500 million profit.

      Which one of the 2 companies is more meaningful for the car market and makes a bigger impact on society as a whole? The most profitable companies not always are the most meaningful ones, just look at tesla-motors and their push to revolutionize the car industry is yet to create a sustainable profit.

        • the
        • 3 years ago

        I never said Samsung wasn’t making a profit, just DRAM and NAND have notoriously small margins historically and the market is very volatile.

        Their SoC business from all indications does appear to be healthy and is likely higher margin than their DRAM and NAND segments.

        • psuedonymous
        • 3 years ago

        [quote<]Which one of the 2 companies is more meaningful for the car market and makes a bigger impact on society as a whole? [/quote<]The one with an extra 500 million to splash out on R&D?

          • Arag0n
          • 3 years ago

          R&D costs are counted before profit. With only profit numbers there is no way to say who invested more in R&D.

    • Vaughn
    • 3 years ago

    apples vs oranges if you ask me.

    • Srsly_Bro
    • 3 years ago

    [quote<]Intel's IoT division has grown recently[/quote<] Intel IoT jobs [url<]https://www.electronicsweekly.com/news/business/intel-cut-iot-jobs-2017-07/[/url<]

    • cmrcmk
    • 3 years ago

    It’s not too surprising that Samsung is the revenue king of the hill but I thought Intel would still blow them away on profit. I guess not…

      • chuckula
      • 3 years ago

      NAND R&D is nowhere near as expensive as other kinds of R&D.

        • frenchy2k1
        • 3 years ago

        You are too dismissive of Samsung’s strength: diversity.
        They have their hands in every markets, from processors to DRAM, NAND to camera sensors, IoT, micro controllers…
        At the opposite of intel, they know how to leverage their knowledge in one market in the other ones.

          • Laykun
          • 3 years ago

          Intel seems to be a bit fragile when it comes to competition too, their efforts in the phone SoC and IoT have pretty much stagnated as they took one or two blows and decided they’d rather not play anymore, rather than going back to the drawing board and trying again.

    • chuckula
    • 3 years ago

    Thank you NAND manufacturers for colluding together to make this possible.

      • RAGEPRO
      • 3 years ago

      I realize this was said at least partially in jest but does anyone really legitimately believe that the DRAM and NAND shortages are entirely accidental? I sure don’t. RAM manufacturers have been slammed for colluding before and it would surprise me none to find out it was happening again.

        • christos_thski
        • 3 years ago

        Can’t upvote this enough. Collusion has been the general rule rather than the exception in this market. And now the storage market belongs to this mafia too…

          • PBCrunch
          • 3 years ago

          It isn’t like the storage market always belonged to a small number of players in the days of spinning rust…

            • christos_thski
            • 3 years ago

            In the tail-end it became a practical duopoly and the taiwan floods became their excuse for colluding. But throughout its history? No, I don’t think it’s ever been near the kind of cartel memory makers have had going since the 90s.

        • lmc5b
        • 3 years ago

        To me the part that gets ridiculous is that desktop DRAM increased 5x in price but for 150 dollars I can get a phone from china with 4GB lpddr4.

        • ermo
        • 3 years ago

        ISTR that the DRAM market was on the brink of collapse a few years back due to oversupply issues, which made the prices drop to where most manufacturers couldn’t stay in the black.

        My guess is that they’ve tacitly agreed not to let this happen again.

      • strangerguy
      • 3 years ago

      Those homegrown Chinese DRAM/NAND fabs can’t go online soon enough.

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