Samsung Narrowing Gap With Intel

Samsung Electronics has greatly reduced the gap with Intel in the global semiconductor market thanks to the world's largest chipmaker's sluggish performance.

According to reports from companies and research firm iSuppli, Samsung's sales in its semiconductor division rose 10 percent to $19.7 billion last year, which is 63 percent of Intel's $31.5 billion. In 2005, Samsung's semiconductor sales were 51 percent of Intel's.

Samsung's improvement was due to the sagging performance of Intel, rather than from its own efforts. California-based Intel reported an 11 percent decline in sales last year from 2005, while Samsung's sales grew by 4 percent.

Meanwhile, Samsung's operating profit from its memory sales fell 8 percent from 5.45 trillion won ($5.1 billion) in 2005 to 5.03 trillion won ($4.75 billion) last year.

``For U.S. microprocessor giant Intel, 2006 was the worst of times, as its global semiconductor revenue dropped by 11.1 percent from 2005,'' said Dale Ford, vice president of iSuppli. ``The revenue decline, which was due to Intel's bleak performance in its core PC microprocessor and flash-memory businesses, erased nearly all of the company's sales gains from its strong year in 2005.''

Samsung has for many years been the world's largest memory chip maker, but was far behind Intel in overall semiconductor revenues, including both the memory chips and non-memory chips such as CPUs. In 2002, Samsung's chip sales were $8.7 billion, or 37 percent of Intel's $23.7 billion.

It is considered inadequate to directly compare the two companies in terms of technology leadership as they specialize in different sectors _ Samsung leading the memory chip field such as dynamic random access memories (DRAM) and NAND flash chips, and Intel being the dominant force in the non-memory sector such as x86-series and Pentium central processing units (CPUs).

The iSuppli report named two South Korean companies _ Samsung and Hynix _ as big winners in the chip market last year. Samsung gained 12 percent in sales from 2005 to be ranked second after Intel, and Hynix' sales soared by 41.5 percent to $7.87 billion. With such a buoyant performance, Hynix rose from 11th place to seventh in worldwide sales.

As a whole, the worldwide chip market grew 9.3 percent last year to $260.2 billion, according to the iSuppli report.

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