Samsung Could Pass Intel in Chip Sales

Release time:2017-05-01

Thanks to surging memory chip prices, South Korea's Samsung Electronics Co. Ltd. could knock Intel Corp. from its familiar perch atop the chip vendor sales leaders as soon as this quarter, according to market research firm IC Insights Inc.

Samsung, the industry leader in memory chip sales, is benefiting from a precipitous rise in average selling prices (ASPs) for DRAM and NAND flash. According to IC Insights, DRAM ASPs in the first quarter of this year were 45 percent greater than in the first quarter of 2016, while NAND ASPs increased 40 percent over the same period.

If Intel's second quarter sales come in around the midpoint of the company's guidance, about $14.4 billion, Samsung could unseat Intel in the second quarter with a modest yet typical increase of 7.5 percent in chip sales from $13.9 billion in the first quarter, IC Insights noted.

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Intel has been No. 1 in semiconductor sales since 1993. If memory prices hold firm through 2017, Samsung could also displace Intel as the chip sales leader for the full year, IC Insights said. Both companies are currently on pace to sell about $60 billion in semiconductors this year, the firm said.

"With the memory market still cyclical, this could indeed be a one year event," said Bill McClean, IC Insights president, in an email exchange with EE Times.

IC Insights (Scottsdale, Ariz.) predicts that memory chip prices will begin to cool in the second half of 2017. However, the firm is still projecting that the DRAM market will grow 39 percent this year and the NAND market will grow 25 percent. IC Insights also believes that the memory chip market may grow even faster than the firm has projected.

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But McClean noted that memory chip vendors are dramatically increasing their capital expenditures this year to add capacity in light of the memory boom, a situation that can quickly lead to overcapacity and a rapid deflation of ASPs. Samsung spent $4.3 billion on semiconductor capex in the first quarter alone and is likely to spend more than $15 billion for the full year, a 30 percent increase over 2016. Meanwhile, rival SK Hynix plans to increase its capex by 16 percent this year, McClean said.

"When they catch up in capacity, memory prices could retreat quite quickly," McClean said.

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Jung Yeon-je | AFP | Getty ImagesSamsung Electronics said on Tuesday that its fourth-quarter earnings likely decreased sharply due to lackluster demand in its memory chip business as well growing competition in the smartphone segment.The South Korean tech giant predicted operating profit for the three months ended December was approximately 10.8 trillion Korean won ($9.67 billion) — a 38.5 percent drop from the previous quarter and below the 13.2 trillion won that analysts predicted.Consolidated sales for the fourth-quarter is predicted to be around 59 trillion won, lower than the 62.8 trillion won analysts predicted in a Reuters poll, and nearly 10 percent down from the third quarter.The chipmaker said weaker-than-expected demand in the memory business led to a decline in shipments and a notable drop in memory chip prices.For its smartphone business, marketing expenses in an essentially stagnant smartphone market led to decline in profitability. Over the third quarter of 2018, Samsung saw more than 13 percent year-over-year decline in global smartphone shipments, according to International Data Corporation.Samsung will disclose detailed earnings later in the month but added that difficult business conditions for the memory business would likely keep its earnings subdued for the first quarter of 2019.The weak guidance from Samsung comes after Apple lowered its revenue and gross margin predictions last week, citing a weakening Chinese economy and lower-than-expected iPhone revenue in Greater China as some of the factors.Concerns over a slowdown in the Chinese economy have kept investors on edge. It could pose a worry for Samsung since it sells memory chips used in smartphones and data centers to Chinese firms. At the same time, it also has production plants in the world's second-largest economy for some of the memory chips — those are likely to be hurt by the ongoing trade tensions between Beijing and Washington.In December, a report from the Korea International Trade Association said the trade war may pose higher risks to both Samsung and its chipmaking rival SK Hynix.At the same time, a slowdown in Chinese consumer demand could potentially affect Samsung's consumer electronics business, including smartphones. One analyst said that China accounts for between 20 to 30 percent of global consumer tech demand.
2019-01-08 00:00 reading:819
Samsung’s two-year capex spending of $46.8 billion nearly matches the combined two-year capex spending of $48.4 set by Intel and TSMC.IC Insights revised its outlook for total semiconductor industry capital spending and presented its forecast of semiconductor capex spending for individual companies in its November Update to The McClean Report 2018, which was released earlier this month.Samsung is expected to have the largest capex budget of any IC supplier again in 2018.  After spending $24.2 billion for semiconductor capex in 2017, IC Insights forecasts that Samsung’s spending will edge slightly downward, but remain at a very strong level of $22.6 billion in 2018 (Figure 1).  If it comes in at this amount, Samsung’s two-year semiconductor capital spending will be an astounding $46.8 billion.Figure 1As seen in Figure 1, Samsung’s semiconductor capital outlays from 2010, the first year the company spent more than $10 billion in semiconductor capex, through 2016 averaged $12.0 billion per year.  However, after spending $11.3 billion in 2016, the company more than doubled its 2017 capex budget.  The fact that Samsung’s continued its strong capex spending in 2018 is just as impressive.IC Insights believes that Samsung’s massive spending outlays in 2017 and 2018 will have repercussions far into the future.  One effect that has already begun is a period of overcapacity in the 3D NAND flash market.  This overcapacity situation is due not only to Samsung’s huge spending for 3D NAND flash, but also from spending by competitors (e.g., SK Hynix, Micron, Toshiba, Intel, etc.) that attempt to keep pace in this market segment.With the DRAM and NAND flash memory markets showing strong growth through the first three quarters of 2018, SK Hynix ramped up its capital spending this year.  In 1Q18, SK Hynix said that it intended to increase its capex spending by “at least 30%” this year.  In the November Update, IC Insights forecasts that SK Hynix will see a 58% surge in its semi capex spending.  The increased spending by SK Hynix this year is focused primarily on bringing new capacity online at two of its large memory fabs—M15, a 3D NAND flash fab in Cheongju, South Korea, and the expansion of its huge DRAM fab in Wuxi, China.  The Cheongju fab is being pushed to open before the end of this year.  The Wuxi fab is also targeted to open by the end of this year, a few months earlier than its original start date of early 2019.Overall, IC Insights’ now forecasts total semiconductor industry capital spending will climb 15% to $107.1 billion this year, the first time that annual industry capex is expected to top $100.0 billion.  Following the industry-wide growth this year, semiconductor capex is expected to decline 12% in 2019 (Figure 2).Figure 2Given that the current softness in the memory market is expected to extend into at least the first half of next year, the combined capital spending by the three largest memory suppliers—Samsung, SK Hynix, and Micron—is forecast to drop from $45.4 billion in 2018 to $37.5 billion in 2019, a decline of 17%.In total, the top five spenders, which are expected to represent 66% of total outlays this year, are forecast to cut their capital spending by 14% in 2019 with the remaining semiconductor industry companies registering a 7% decline.
2018-12-03 00:00 reading:749
Samsung Electronics Co., Ltd. today announced several groundbreaking additions to its comprehensive semiconductor ecosystem that encompass next-generation technologies in foundry as well as NAND flash, SSD (solid state drive) and DRAM. Together, these developments mark a giant step forward for Samsung’s semiconductor business.Unveiled at its annual Samsung Tech Day include:7nm EUV process node from Samsung’s Foundry Business, providing significant strides forward in power, performance and area.SmartSSD, a field programmable gate array (FPGA) SSD, that will offer accelerated data processing and the ability to bypass server CPU limits.QLC-SSD for enterprise and datacenters that offer 33-percent more storage per cell than TLC-SSD, consolidating of storage footprints and improving total cost of ownership (TCO).256-gigabyte (GB) 3DS (3-dimensional stacking) RDIMM (registered dual in-line memory module), based on 10nm-class 16-gigabit (Gb) DDR4 DRAM that will double current maximum capacity to deliver higher performance and lower power consumption.“Samsung’s technology leadership and product breadth are unparalleled,” said JS Choi, President, Samsung Semiconductor, Inc. “Bringing 7nm EUV into production is an incredible achievement. Also, the announcements of SmartSSD and 256GB 3DS RDIMM represent performance and capacity breakthroughs that will continue to push compute boundaries. Together, these additions to Samsung’s comprehensive technology ecosystem will power the next generation of datacenters, high-performance computing (HPC), enterprise, artificial intelligence (AI) and emerging applications.”Advanced Foundry TechnologyInitial wafer production of Samsung’s 7nm LPP (Low Power Plus) EUV process node represents a major milestone in semiconductor fabrication. The 7LPP EUV process technology provides great advances, including a respective maximum of 40-percent area reduction, 50-percent dynamic power reduction and 20-percent performance increase over 10nm processes. The 7LPP process represents a clear demonstration of the foundry business’ technology roadmap evolution, providing Samsung’s customers a direct path forward to 3nm.Powering Server-less ComputingSamsung enables the most advanced providers of server-less computing through products including the new SmartSSD, quad-level cell (QLC)-SSD, 256GB 3DS RDIMM as well as High Bandwidth Memory (HBM) 2 Aquabolt. By accelerating data processing, bypassing server CPU limits and reducing power demands, these products will enable datacenter operators to continue to scale at faster speeds while containing costs.Samsung’s industry-leading flash memory products for future datacenters will also include Key Value (KV)-SSD and Z-SSD. KV-SSD eliminates block storage inefficiency, reducing latency and allowing datacenter performance to scale evenly when CPU architectures max out. The company’s next-generation Z-SSD will be the fastest flash memory ever introduced, with dual port high availability, ultra-low latency and a U.2 form factor, designed to meet the emerging needs of enterprise clients. Z-SSD will also feature a PCIe Gen 4 interface with a blazing-fast 12-gigabytes-per-second (GB/s) sequential read, which is 20 times faster than today’s SATA SSD drives.Accelerating Application LearningA range of revolutionary Samsung solutions will enable the development of upcoming machine learning and AI technologies. The Tech Day AI display highlighted astounding data transfer speeds of 16Gb GDDR6 (64GB/s), ultra-low latency of Z-SSD and industry-leading performance of Aquabolt, which is the highest of any DRAM-based memory solution currently in the market. Together, these solutions help Samsung’s enterprise and datacenter clients open new doors to application learning and create the next wave of AI advancements.Streamlining Data FlowSamsung’s new solutions will enable not just faster speeds and higher performance but also improved efficiency for its enterprise clients. Enterprise products on display at Tech Day included D1Y 8Gb DDR4 Server DRAM, which incorporates the most advanced DRAM process, resulting in lower power usage. Samsung’s 256GB 3DS RDIMM also helps to improve enterprise performance and enables memory-intensive servers capable up to 16-terabytes (TB).Additionally, Samsung’s dual-port x4 PCIe Gen 4 32TB SSD offers 10GB/s performance. Samsung’s 1Tb QLC-SSD presents a cutting-edge storage option for enterprise clients with competitive efficiency when compared to hard disk drives (HDD), while KV-SSD allows server performance to scale even as CPU architectures max out, also providing a competitive TCO, write amplification factor (WAF) improvement and scalability.Breaking Performance BarriersWith their leading-edge specs, Samsung’s QLC-SSD, Z-SSD and 8GB Aquabolt help high-performance computing clients blast through performance barriers and reach new heights. The 8GB Aquabolt provides the fastest data transmission speed and highest performance of any DRAM-based memory solution on the market today at 307GB/s per HBM cube. QLC-SSD and Z-SSD, both powerful on their own, are also offered in a tiered storage solution that results in a 53-percent increase in overall system performance.Enabling Future InnovationEmerging tech requires the most innovative and flexible components. Samsung’s SmartSSD will increase speed and efficiency, and lower operating costs by pushing intelligence to where data lives. Movement of data for processing has traditionally caused increased latency and energy consumption while reducing efficiency. Samsung’s new SmartSSDs will overcome these issues by incorporating an FPGA accelerator into the SSD unit. This allows for faster data processing through bypassing server CPU limits. As a result, SmartSSDs will have higher processing performance, improved time-to-insight, more virtual machines (VM), scalable performance, better de-duplication and compression, lower power usage and fewer CPUs per system.Unparalleled Product EcosystemSamsung’s comprehensive product portfolio with state-of-the-art solutions set new standards for data processing speed, capacity, bandwidth and energy conservation. By leveraging such solutions, data centers, enterprise companies, hyper-scalers and emerging tech platforms are able to configure product solutions based on their requirements and develop exciting new tech offerings such as 5G, AI, enterprise and hyperscale data centers, automotive, networking and beyond.Samsung will continue to push boundaries in tomorrow’s semiconductor technologies through innovations such as its sixth-generation V-NAND built on a single structure, or with ‘1-stack technology,’ and sub-10nm DRAM with EUV for super-high density and performance.Experts across the industry, including Apple co-founder, Steve Wozniak, were invited at Samsung Tech Day to address the advancements and challenges in today’s semiconductor market, and offer insights for the future of semiconductors. More than 400 customers, partners and industry influencers attended the event.
2018-10-22 00:00 reading:882
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