Samsung Challenges Intel For Chip Leadership

It appears as if the chip industry had a much better 2010 than 2009, as the global semiconductor business is estimated to have gained about $70 billion in sales last year.

 Gartner reports that global chip sales surged to $299.4 billion.

"The industrywide upturn was due to the combination of pent-up demand that had built in the wake of the worldwide economic recession, and rebuilding of semiconductor inventories that were significantly depleted during the recession and early recovery," said Peter Middleton, principal analyst at Gartner.

IHS iSuppli came to a similar result and highlighted a race between Intel and Samsung for the dominance in the chip market. Intel increased its sales expand to $40.4 billion in 2010, which translates to a 25.5% improvement over 2009 and a 13.3% market share. Samsung, however, jumped by 59.1% from $17.5 billion to $27.8 billion last year, according to iSuppli. The industry average was 32.1% in iSuppli's charts and 30.9% in Gartner's result.

“The rise of Samsung is one of the biggest stories of the last decade in the worldwide semiconductor market,” said iHS iSuppli analyst Dale Ford. “When experts discuss competition for Intel, they almost always focus on Advanced Micro Devices (AMD). While it is true that AMD is Intel’s major competitor in the microprocessing unit (MPU) market, Samsung is the primary rival of Intel for overall semiconductor market share. And although they are mainly indirect competitors in the marketplace, Intel and Samsung have been ranked No. 1 and No. 2, respectively, for a number of years.”

Since 2001, Intel’s market share has ranged between 11.9% and 14.8%, while Samsung held just 3.9% in 2001. Meanwhile, Samsung has seen its revenues grow by 355% from 2001 to 2010, allowing the company to expand market share and raise its ranking, iSuppli said.