Samsung’s semiconductor business has been performing exceptionally well in the last couple of years. The Korean company has posted record profits in the last few quarters, primarily due to the stellar performance by its semiconductor division. The fact that Samsung dethroned Intel as the largest chipmaker in the world in 2017 demonstrates its rapid growth in the sector.
Samsung outsold Intel by 23 percent
There were reports questioning Samsung’s ability to sustain the explosive growth of its semiconductor business. At least for now, Samsung seems to be showing no signs of slow down. Last month, the company once again posted impressive quarterly earnings with a major contribution from its semiconductor division. Adding to that evidence is the Q1 2018 sales report from market research firm IC Insights which also shows Samsung’s increased lead over Intel in chip sales.
According to the published numbers, Samsung outsold the second-ranked Intel by 23 percent in Q1 2018 with $18.6 billion in chip sales, compared to Intel’s $15.8 billion. Samsung registered an impressive 43% YoY growth while Intel’s number stood at 11%. TSMC, SK Hynix, and Micron occupied the next three positions in the top five respectively.
The report attributes Samsung’s impressive performance to the demand for DRAM and NAND flash memory. Out of the total Q1 semiconductor sales by Samsung, memory chips accounted for 83 percent, up from 77 percent last year. Samsung’s rival memory chip vendors Micron Technology and SK Hynix also benefited from the market condition with both of them registering 49% YoY increase in sales.
Samsung does expect demand in the memory chip market to soften overall in the coming quarters which could have an impact on the company's earnings from its semiconductor division. An important distinction to be kept in mind is that Samsung has been able to reach this position on the back of memory chips and not microprocessors.
On the other hand, Intel ruled the semiconductor market for more than two decades primarily because of its memory processors. A slowdown in the memory chip market might mean that Intel could take back its crown from Samsung in the future.
