Intel Extends Semiconductor Lead Over Samsung: IHS

Intel in 2011 grew its market share to 15.6 percent, its highest in a decade, thanks to demand for its core PC processors and its purchase of Infineon's mobile chip business.

Intel saw its share of the worldwide semiconductor market surge in 2011 to its highest level in more than 10 years, a jump propelled by demand for its core PC and server chips and flash memory as well as the revenue gained by its $1.4 billion acquisition of Infineon Technologies€™ mobile chip business, according to numbers released March 26 by IHS iSuppli.

Intel grew its market share to 15.6 percent, a 2.5 percent increase, and put at least a temporary stop to the push by Samsung Electronics, which had been chipping away at Intel€™s lead over the past couple of years. Samsung€™s market share stayed at 9.2 percent, part of an up-and-down showing for manufacturers who use chip designs from ARM Holdings.

By contrast, Qualcomm, which also uses ARM designs for its chips, saw its revenue jump 41.6 percent, pushing the vendor from the No. 9 spot in 2010 to No. 6 in 2011.

For Intel, which has been aggressively enhancing its core PC and server chips and is looking to expand its reach in the ARM-dominated mobile device space, 2011 was its best year in more than a decade, according to IHS iSuppli analysts. In 2001, Intel€™s share was 14.9 percent, compared with 13.1 percent in 2010.

€œIntel in 2011 captured the headlines with its major surge in growth,€ Dale Ford, head of electronics and semiconductor research for IHS, said in a statement. €œThe company€™s rise was spurred by soaring demand for its PC-oriented microprocessors, and for its NAND flash memory used in consumer and wireless products. Intel€™s revenue also was boosted by its acquisition of Infineon€™s wireless business unit. The company€™s strong increase helped it to stave off the rising challenge mounted by No. 2 semiconductor supplier Samsung Electronics Co. Ltd., which had been whittling away at Intel€™s lead in recent years.€

Intel€™s performance validated IHS iSuppli analyst predictions in December 2011, when IHS first noted that the giant chip maker was ready to reassert itself over Samsung and other competitors. Intel saw its revenues grow 20.6 percent in 2011, the market research firm said.

Intel in early 2011 launched its Sandy Bridge chip architecture, which integrated high-level graphics technology with the CPU on the same piece of silicon, an effort mirrored by rival Advanced Micro Devices€™ Fusion accelerated processing units (APUs). Intel also revamped its Xeon server processors.

However, Intel executives for the past couple of years have been vocal about their intention to become larger players in the booming mobile computing space, particularly in the increasingly popular smartphones and tablets, the bulk of which currently are powered by ARM-designed chips made by the likes of Samsung, Qualcomm and Texas Instruments, which moved into the third spot on IHS iSuppli€™s list, with 4.5 percent of the market.

Intel expects tablets and smartphones powered by its Atom and Core chips to be released this year. The company also is the key driver behind the burgeoning market for Ultrabooks, which are very thin and light notebooks that have the capabilities of traditional laptops as well as features found on tablets, including long battery life and instant-on.

Samsung had seen its fortunes rise over the past decade, growing its market share from 3.9 percent in 2000 to 9.2 percent in 2011. The company saw its revenues grow 0.6 percent last year, which left its market share unchanged.

However, Qualcomm showed strong growth, propelling it to 3.3 percent market share, sixth place on the list and within striking distance of Renesas Electronics, which was No. 5 with 3.4 percent share. Qualcomm had grown its market share steadily since 2000, but saw it dip in 2010 while the rest of the market rebounded after poor numbers during the global recession of 2009. Qualcomm was able to limit the amount of revenue decline in 2009, so it didn€™t get the same strong rebound that other vendors had the following year, according to IHS iSuppli analysts.

Overall, the global semiconductor market grew 1.3 percent, down from IHS iSuppli€™s December 2011 projection of 1.9 percent. The market saw a particularly weak fourth quarter, with revenue dropping 5.9 percent over the third quarter. Overall, only 52.6 percent of the 302 chip suppliers tracked by IHS iSuppli saw revenues grow in 2011, and vendors with headquarters in the Americas saw the most improvement, with 7.5 percent revenue growth.

By contrast, those based in Japan saw revenues fall 7.2 percent as they struggled with the fallout from the massive earthquake and tsunami that hit the country in March 2011.