Intel is on the verge of losing its position as the world's largest chipmaker.
Since the 1980s, Intel has dominated the semiconductor market, maintaining its position as the number one global sales player. Only twice gave way to Samsung in 2017 and 2018.
According to data provided by financial information FnGuide on December 29, The Korea Securities Corporation predicts that Samsung Electronics' semiconductor sales will reach 95.13 trillion won ($79.44 billion) in 2021, up 30.6% from 72.86 trillion won in 2020. Intel's sales in 2021 are expected to reach $75.5 billion, down 1% from the previous year.
Samsung attributed the outstanding performance of the chip business to higher than expected price increases for memory chips such as DRAM and NAND, as well as the release of backlog demand. Contract prices for PC DRAM (DDR48Gb) rose 7.89% m/m to $4.1 in July, while NAND Flash 128GB memory cards and multilayer cell storage products for USB rose 5.48% sequentially at a fixed transaction price of $4.81 in July.
According to market research firm Gartner, global memory chip sales will grow by 33 percent this year, while CPU sales will grow by only 4 percent. Sales of PCs have been growing since the pandemic, but have recently begun to decline and are expected to have a negative impact on Intel, that is, Samsung's semiconductor business is expected to maintain its growth momentum in 2022.
Investors also seem to feel that Intel's heyday is over. Several other chipmakers have higher stock market valuations, including TSMC and Nvidia, which are more than three times more valuable than Intel.
The rise of TSMC and Samsung Electronics, coupled with the pressure on supply chains brought by the new crown epidemic, the focus of key industries has begun to shift to Asia, and the US manufacturing industry may become vulnerable.
In 1990, two years before Intel became the world's largest chipmaker, the United States accounted for about 37% of the world's chip production. According to the Semiconductor Industry Association, that percentage has now dropped to around 12 percent. Europe's share of this market has even declined further.
However, in early 2021, 60-year-old Pat Kirsinger was once again appointed ceo of Intel, returning to the battlefield after a 12-year absence, which gave Intel new hope.
While Intel's dominance is waning, the Intel helmsman is still trying to keep the company thriving.
Judging from intel's third-quarter earnings report, Pat Kilsinger's efforts have also begun to bear fruit:
PC-related business CCG segment revenue of $9.7 billion decreased 2% year-over-year and slightly higher than the expected $9.64 billion.
DCG, the restructured pan-data center business unit, reported revenue of $6.5 billion in the second quarter, up 10% year-over-year and back to double-digit growth.
IoT segment IOT revenue of $1.37 billion increased 50% year-over-year and exceeded expectations of $979.5 million. Among them, the IOTG division revenue of $984 million, and the artificial intelligence-based autonomous driving business Mobileye revenue of $326 million, an increase of 39% year-on-year, a record.
Programmable Solutions PSG revenue of $478 million increased 16% year-over-year, lower than expected at $493.4 million.
Non-Volatile Storage Solutions Group NSG revenue of $1.11 billion decreased 4.2% year-over-year, but exceeded market expectations of $1.02 billion.
Although from the data point of view, Intel's performance in the third quarter is remarkable, but because of the belief that Intel is difficult to turn over, or because of the high investment in IDM2.0 is difficult to get a return, the market has not given a good face to Pat Kilsinger, who attaches importance to technology research and development and does not pursue short-term capital market performance. After the release of this earnings report, Intel's stock price suffered a heavy decline on the same day, falling by more than 9% after hours.
That's still some way off for Pat Kilsinger's goal of returning Intel to leadership in key manufacturing technology areas, after all, as a company that defines the criteria for success in the chip space, aggressive pace and the cost of innovation mean that once you fall behind, the road back to the top is often too steep and difficult to climb.