According to a recent report by the Financial Times, Samsung Electronics has claimed the top spot as the world’s largest chip manufacturer in the second quarter of 2017, surpassing Intel. Market research firm Nomura estimates that Samsung’s chip sales for this quarter could reach $15.1 billion, surpassing Intel’s projected sales of around $14 billion.
This shift in the semiconductor landscape is largely due to Samsung's diversified business approach and its relentless pursuit of cutting-edge innovation. These achievements are the result of significant investments over many years. Since Intel launched the Pentium CPU for personal computers in 1993, it had dominated the semiconductor market for 24 years. Back then, Samsung ranked seventh. However, with the rise of smartphones, the demand for mobile processors has overtaken that for PCs, and the memory requirements of mobile devices have grown closer to those of desktop computers, offering chipmakers like Samsung new avenues for growth.
Unlike Intel's focus on PC processors, Samsung has a broad portfolio of semiconductor products, including mobile chips, IoT solutions, and strong capabilities in NAND and RAM memory chips. As we step further into the era of the Internet of Things, connected cars, and artificial intelligence, the demand for advanced semiconductors is unprecedented. Sanjay Jha, CEO of Global Foundries, noted that the proliferation of large data centers and AI applications will drive massive needs for data storage and memory, heralding a "golden decade" for the semiconductor industry. This trend bodes well for Samsung’s continued expansion in the semiconductor sector.
Samsung recently unveiled its latest IoT processor, the Exynos i, showcasing its commitment to innovation in this space. This active pursuit of technological advancement, paired with a willingness to invest heavily, has been pivotal to Samsung’s success. In the 1970s, Samsung looked to companies like Sony for inspiration and began developing its own semiconductor components. This decision set the stage for Samsung’s long-term growth trajectory.
From entering the 100nm era to pioneering the 10nm process today, Samsung remains at the forefront of the semiconductor industry. Recently, Samsung shared its ambitious roadmap, aiming to trial the 8nm process later this year, achieve mass production of 7nm chips in 2018, and roll out 6nm and 5nm processes in 2019, with plans for 4nm mass production by 2020. These goals underscore Samsung’s forward-thinking strategy.
To sustain this momentum, Samsung plans to invest at least 21.4 trillion won ($18.63 billion) in South Korea to solidify its leadership in memory chips and next-generation smartphone displays. The newly operational Pyeongtaek plant in South Korea is now the world’s largest semiconductor production line. Additionally, Samsung intends to construct a new NAND chip production line at its Xi’an facility in China. The initial production line in Xi’an, inaugurated in 2014, already handles up to 120,000 NAND memory wafers per month.
The rapid pace of technological advancements has fueled rising demand for high-performance, cutting-edge semiconductor components. As we enter the era of cloud computing, AI, and IoT, the semiconductor market continues to grow exponentially. For Samsung, the future holds immense potential. By capitalizing on emerging opportunities, Samsung is poised to make its mark on this rapidly evolving industry.
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