Samsung is estimated to have generated $15.1bn in chip sales for the April-June quarter, surpassing Intel’s estimated sales of $14.4bn, according to Nomura. Samsung is also expected to displace Intel as the industry leader for the full year, unless memory chip prices fall sharply in the second half. Samsung’s 2017 chip sales are forecast at $63.6bn, versus Intel’s estimated $60.5bn.
Analysts have pointed to surging prices of memory chips as the biggest reason for Samsung’s stronger position as consumers want more powerful smartphones and other internet-connected devices.
Samsung is the world’s largest maker of memory chips, which are essential for all smartphones, tablets, personal computers and servers. Samsung also makes its own application processors for smartphones and produces processors designed by Apple and Qualcomm, while Intel has struggled to break into mobile.
“In the mobile era, demand for D-Ram [a type of memory chip] and SSDs [solid state drives] has surged, boosting their prices since last year amid tight supply,“ said CW Chung, an analyst at Nomura. “The memory chip market has grown bigger than the CPU market.“
Intel is good at making the CPU chips that power personal computers. Unfortunately for the US firm, consumer demand is sliding for these devices.