In the second quarter of 2017, Intel remained the market leader in pure semiconductor revenues, generated by the sale of its own products, according to IHS Markit. But the leadership changed in third-quarter 2017.
IHS indicated its semiconductor revenue market share calculation excludes the sale of components to third parties since the third party will be credited with the component sale into the merchant market. The research firm estimated Intel's semiconductor revenues for second-quarter 2017 at US$14.6 billion and Samsung's at US$14.4 billion. This represented 12% quarter-over-quarter and 58% year-over-year growth for Samsung, driven by its memory business growing 15% sequentially and 71% on year.
The memory market supply-and-demand issues continue to favor Samsung, who makes over 80% of its revenues from memory ICs, IHS noted. In the third quarter of 2017, Samsung grew its revenues from memory by more than 16% quarter over quarter and 62% year over year. By contrast, Intel's memory business is a mere 6% of its overall revenues and, while it grew 2% sequentially and 37% on year in third-quarter 2017, it had an insignificant impact on overall semiconductor performance.
Intel's semiconductor revenues grew 9% on quarter and 5% from a year earlier to US$15.9 billion in the third quarter of 2017, IHS said. The performance was good news to Intel investors because it reflected successes in the company's strategic move away from a declining client computing market and toward what Intel describes as data driven segments: data center, memory and Internet of Things (IoT). However, it could not compare to Samsung's 15% quarter-over-quarter and 53% year-over-year semiconductor revenue growth, topping US$16.5 billion in third-quarter 2017. Samsung remained the global memory market leader and continued work on its long-term strategy - to provide the most advanced memory technology.
As memory companies continue their transition to more advanced nodes, IHS expects overall capacity to remain low in the short term as vendors work on expanding their manufacturing. IHS also expects demand from multiple market segments for both DRAM and NAND to remain healthy.
Samsung is forecast to remain number one in semiconductor revenues in the fourth quarter of 2017, growing 6% sequentially and 49% on year to US$17.6 billion, while Intel's semiconductor revenues grow 2% on quarter and 3% from a year earlier to US$16.2 billion, according to IHS.
IHS added its fourth-quarter 2017 forecasts take both companies' semiconductor revenues above the US$60-billion mark for 2017. The long-term battle for revenue supremacy within the semiconductor industry continues as the memory market reaches an equilibrium in supply and demand, and as new revenue opportunities in artificial intelligence (AI) and the IoT, including connected devices and self-driving cars continue to emerge. |