Samsung is now the world’s biggest chipmaker
Intel has been the dominant company in chip manufacturing for literally decades, but in 2017 it ceded its crown to Samsung, as evidenced by the two companies’ annual financial reports.
First noted by Bloomberg, the change of leadership was signaled by Intel’s $62.8 billion in annual revenue being surpassed by the $69.1 billion generated by Samsung’s semiconductor division. It’s not a straightforward comparison to make, since Intel’s focus is on x86 processors, where it remains the leader by a great distance, and Samsung’s strength is in producing memory and flash storage — but in monetary terms, the latter business is now bigger.
Beyond the financials, Samsung’s memory business also looks to be far more important and fundamental to the future of technology than Intel’s traditional CPUs. These days, you’ll struggle to find a smartphone or tablet without Samsung RAM inside it, and the company also commands more than a third of the solid state drive storage market.
In its latest quarterly report, Samsung anticipates growing “demand for high-density memory products for cloud servers and for chipsets required for automotive electronics and AI.” So not only is Samsung omnipresent in the devices we buy today, it’s ideally positioned to capitalize on the hardware and services that are to come.
For a better sense of the scale of Samsung’s chip production business, consider that this company is also among the leading producers of TVs, every sort of home appliance, smartphone displays, and, lest we forget, it’s the world’s most prolific smartphone vendor too. And yet, the biggest boost to its fourth quarter earnings was “driven by the components business, with the largest contribution coming from the Memory business that manufactures DRAM and NAND.”
Memory prices have more than doubled over the past year, as demand continues to grow, and that has helped Samsung’s bumper year of revenue. The near-term future looks set to only extend this trend.