Len Jelinek, senior director for semiconductor manufacturing, IHS Markit, said Samsung has overtaken rival Intel in semiconductor revenue in Q2 2017.
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A Gartner report earlier predicted that Samsung is set to overtake Intel in terms of semiconductor revenue.
The semiconductor market report from IHS Markit is based on merchant market revenue, the revenue obtained by a company through the sale of their own semiconductor components. IHS Markit has not included the sale of components to 3rd parties since a third party will be credited with the component sale into the market.
Intel achieved $14.7 billion revenue from semiconductor business in Q2 2017. Subtracting out third party sales or foundry operations and other non-semiconductor revenue results in Intel’s merchant market semiconductor revenue at $14.4 billion.
Samsung clocked semiconductor revenues of $15.5 billion. The $15.5 billion includes an estimated $1.1 billion of foundry services revenue. Samsung’s merchant market sales end up at $14.4 billion in second quarter.
The above chart from Wikimedia indicates total revenue and profit of Samsung in the recent quarters.
Since neither company formally discloses their actual 3rd party sales or other non-semiconductor revenue the two companies end up separated by a mere $57 million dollars with Intel remaining as the leader.
Intel posted 0.2 percent drop in semiconductor revenue. Intel’s main business microprocessors, grew slightly and now representation approximately 76 percent of its total semiconductor revenue.
Samsung‘s semiconductor revenue grew 12 percent to $15.5 billion. Samsung memory represented 79 percent of its total business, growing by 15.4 percent over Q1.
IHS Market believes that the rapid growth in revenue by Samsung is more a reflection on market supply-and-demand issues rather than a successful long-term strategic plan by either company.
Intel has been strategically refocusing the company, away from a declining client-computing market. Intel aims to drive revenue growth in the global datacenter, internet of things (IoT) and automotive segments.
Samsung continues to follow a long-term strategy focusing on DRAM and NAND flash memory. This strategy has resulted in Samsung positioning itself in the global market leader providing the most advanced memory technology.
As memory companies transitioned their technology to advanced nodes overall capacity declined at a faster rate than companies were able to expand their manufacturing. Increased demands from multiple market segments for both DRAM and NAND occurred at the same time that capacity was declining.
DRAM capacity declined by more than 10 percent while demand increased by more than 20 percent. The transition to 3D NAND resulted in a reduction of available components.
Baburajan K
