Samsung Electronics has overtaken Intel to become the world’s largest semiconductor sales company, according to a report released shortly after Samsung Electronics’ Q2 results were announced. Although Samsung’s share of consignment semiconductor manufacturing is still behind TSMC (Taiwan), there will be fierce competition between Intel, TSMC, and Samsung, which recently announced its entry into the foundry business.
The Wall Street Journal reported that semiconductor sales totaled US$19.7 billion. Intel experienced lower second-quarter sales than Samsung, at $19.6 billion, according to the report. Intel, based in Santa Clara, California, has maintained its leadership position in most industries over the past 30 years, although it briefly lost the top spot to Samsung in 2017 and 2018 when memory semiconductors were in the spotlight. According to WSJ, Samsung and Intel’s main semiconductor products are memory semiconductors and central processing units (CPUs), respectively, and the unit price of memory semiconductors is much lower than that of CPUs, but the demand is much higher. According to Gartner, a multinational market research firm, memory semiconductor sales will grow 33% this year over last year, but PC and server CPU sales will rise only 4%.
A closer look at the foundry sector alone, however, reveals a very different picture. In March, Intel announced it would venture into the business of manufacturing parts for other companies. As explained by the Wall Street Journal, Samsung, Taiwan’s Taiwan Semiconductor Manufacturing Company and Intel are the only semiconductor manufacturers with reliable mass production lines that underpin the latest technologies like autonomous driving and 5G mobile communications. In the first quarter of this year, TSMC’s market share was 55 percent, and Samsung’s 17 percent, said Dale Gale, head of research at Counterpoint Research, a U.S. market research firm.
Samsung and TSMC plan to invest more than $100 billion in semiconductor production, according to the WSJ.
Samsung predicted in its earnings announcement last month that its foundry sales could increase by more than 20% this year. Intel CEO Pat Gelsinger also pledged $20 billion to enter the foundry in a March announcement. Last month, Gelsinger mentioned that he already had more than 100 potential customers, including Qualcomm, a supplier of key components for Samsung’s cell phones.