BrandArena: Samsung Ends Intel's 24-Year Reign As The World's Largest Chipmaker

Monday, 31 July 2017

Samsung Ends Intel's 24-Year Reign As The World's Largest Chipmaker

Intel's 24-year reign as the world's biggest chipmaker has come to an end, as revealed in Samsung's Q2 earnings report.

The South Korean firm dethroned Intel from the top spot by posting a revenue total of $15 billion, and an operating profit of $7.1 billion for this quarter, a huge change from the $2.4 billion in operating profits in the same quarter last year. Intel, meanwhile, reported a revenue of $14.8 billion and an operating profit of $3.8 billion.

In addition, Intel focused on furthering developments in CPUs for laptops, PCs, and servers, while Samsung instead built for smartphones, tablets, and wearables. Intel, however, has failed to make much headway with mobile devices and wearables, choosing instead to focus on IoT devices and AI research. In addition, Samsung isn’t blind to the

Intel is currently burning through cash ramping up manufacturing for new memory chips. Samsung is also continuing to invest in memory chips, saying recently it would invest $18.6 billion to increase manufacturing capacity in South Korea. But everybody is ramping at what might be the peak of the memory business cycle, Rasgon said. And because memory is such a big business for Samsung, any potential future downturn will hit Samsung hardest.

Nevertheless, Intel’s return to the memory business is an interesting turn of events considering that’s where Intel first started in 1970. In the 1980s, increased competition from Japan started making life very difficult for Intel.

In response, Intel successfully made the move to the more profitable business of microprocessors before the PC industry started booming. Intel became the largest chipmaker in 1992 and began its rule over the PC industry for the next few decades. But as the PC market has matured in recent years, Intel has come to rely increasingly on its data center business, where it enjoys a market share of well over 90%. The data centre business continues to grow with $4.4 billion in second-quarter revenue, up 9% year-over-year, but faces pressure from a resurgent AMD and intense competition in the fast-growing artificial intelligence market where graphics chipmaker Nvidia currently dominates.

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