In 2017, Samsung successfully surpassed Intel to become the world's largest semiconductor company. This was mainly due to the continued rise in the price of memory chips. However, it has recognized that the possible price reductions in memory chips are making efforts to expand mobile chip business and foundry business. To ensure the continued growth of the overall business of the chip to consolidate the status of the world’s largest semiconductor company just acquired.
Samsung is too dependent on memory chips
Samsung is the world’s largest supplier of memory chips, accounting for nearly 50% of the DRAM market and almost 40% of NAND flash. According to Gartner’s data, the price of NAND flash memory chips increased by 17% in 2017, and DRAM memory chips soared by 44%. Samsung benefited a lot and its chip business revenue soared by 52.6% to US$61.2 billion.
Intel, which has occupied the position of the world's largest semiconductor company since 1992, is the world's largest PC and server chip company. Because the PC market has been declining for several consecutive years and the server chip market has limited growth, Gartner expects its revenue growth last year to be only 6.7%. About 57.7 billion US dollars in revenue, lost the status of the world's largest semiconductor company.
Although Samsung has won the status of the world's largest semiconductor company, but because it is too dependent on the memory chip business, which makes the outside world worry that it may be difficult to occupy this position for a long time, in the past more than 10 years, storage chips have also plummeted. After the double eleventh, China’s memory market also experienced a 30% decline. Currently, several large storage chip companies, SK Hynix and Micron, have plans to expand their storage chip production capacity. Samsung itself is investing heavily in the expansion of its storage chip. Continue to consolidate its dominant position in the memory chip market.
China's memory chip companies also have an impact on memory chips. China's three major storage chip companies, Changjiang Storage, Hefei Changxin, and Fujian Jinhua are stepping up their construction of their memory chip factories. They are expected to begin production as soon as next year, and Chinese companies have been Willing to grab market share quickly with price wars, this will have a greater negative impact on Samsung’s semiconductor revenue.
Samsung is working hard to expand new chip business
Samsung certainly realized that it was too dependent on the current state of memory chips. While continuing to invest in memory chips to consolidate its leading edge, last year it made its foundry business independent into a department, hoping to turn its foundry business into its semiconductor business in the future. New growth point.
Samsung hopes to increase its chip foundry business from the current market share of less than 10% of the global chip foundry market to 25% in the next five years. According to data from ICInsights, in 2016, TSMC’s revenue from the world’s largest chip foundry company was US$29.988 billion, and its market share was as high as 59%. If Samsung can capture 25% of the global chip foundry market in the future, it will be expected to gain nearer the market. 130 billion U.S. dollars in revenue.
Samsung is also expanding another chip business, which is the mobile chip business. Samsung has already reached the same level with the global mobile phone chip leader Qualcomm in terms of mobile phone chip design. Its high-end chip Exynos8895 released last year was comparable to Qualcomm’s then high-end chip, the Xiaolong 835, in terms of CPU, GPU, and baseband performance. Currently, it is about to be released. The high-end chip Exynos9810 is said to outperform Qualcomm's next-generation high-end chip, the Snapdragon 845, in terms of CPU performance.
According to data released by ICinsights, Qualcom’s 2017 chip business revenue is estimated to be around US$17 billion, and Huawei Hass, which ranks seventh in the world’s top 10 chip design companies, has revenues of US$4.7 billion, and Huawei Hass chips are mainly used. On its own mobile phone, Huawei's mobile phone shipments in 2017 are about half that of Samsung. Samsung's mobile phone chips are mainly used on its own mobile phones, and it is also starting to sell mobile phone chips after its chip technology research and development level reaches the industry's leading level. Meizu's upcoming release of Charm Blue S6 uses Samsung's Exynos7872 chip. The future of business may bring about nearly 10 billion US dollars in revenue.
The industry believes that the future market for IoT will be wider than the current smart phone market, and global mobile chip sales will show explosive growth. If Samsung’s mobile chip and chip foundry business can successfully make a share of it, it will be expected to In addition to the memory chip business, it brings a significant increase in chip business revenue, which will help consolidate its position as the world's largest semiconductor company.
Of course, the future is bright, but the road is tortuous. While Samsung is actively exploring these new businesses, many competitors in the industry are also making progress. Can Samsung be faced with changes as it wishes, and its current high-level personnel changes? And the Samsung Group’s successor, Li Zai’s bribery case, has caused Samsung to face an unprecedented grim situation.
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