Samsung Electronics Aims to Recapture No. 1 Status from Intel
Sees operating profit in semiconductor business for Q4 2018 plunge to 7.77 trillion won, 43 percent lower than the previous quarter
Samsung Electronics Vice Chairman Lee Jay-yong shakes hands Rep. Hong Young-pyo, floor leader of the ruling Democratic Party of Korea (DPK), who toured the Hwaseong Campus in Gyeonggi-do on Jan. 30. (Photo: Samsung Electronics)
Samsung Electronics, which is already a commanding leader in the global memory market, has revealed a new vision to rise to No. 1 in the global non-memory market by 2030.
Samsung Electronics Vice Chairman Lee Jay-yong said, “(We’ll) nurture the non-memory business, which has a longer way to go than the memory segment, rather than complain about the difficulties the memory business experiences due to the sagging industry.”
He made the remarks at a meeting with dignitaries, including Rep. Hong Young-pyo, floor leader of the ruling Democratic Party of Korea (DPK), at the Hwaseong Campus in Gyeonggi-do on Jan. 30. Vice Chairman Lee said Samsung Electronics will achieve the goal of ranking 1st not only in memory, but also in the non-memory segment by 2030.
He added that Samsung Electronics will create quality jobs through continued investment in the semiconductor business.
The global memory market began to show signs of a supply glut and declining prices in the fourth quarter of last year, and the trend is forecast to be maintained until the first half of this year.
As Vice Chairman Lee stressed his determination to nurture the non-memory segment, Samsung Electronics is poised to take an aggressive approach to explore the non-memory sector in a nimble fashion.
The Korean electronics giant has established core strategies such as the strengthening of the competitiveness of the mobile application processor (AP)/image sensor sector, the expanded development of next-generation car semiconductors, and the leading of the foundry market by surpassing TSMC of Taiwan. Samsung Electronics is expected to accelerate efforts to secure expertise and establish a related ecosystem.
The move may be construed as Samsung Electronics’ declaration of unmatched supremacy in the non-memory segment as it did in the memory and smartphone sectors.
Korea, led by Samsung Electronics and SK Hynix, is taking an overwhelming lead in the memory segment. Figures released by HIS showed that Samsung Electronics saw the DRAM and NAND flash memory segments take up the No. 1 position with a 46.1 percent and a 38.8 percent market share as of the third quarter of last year, respectively.
Samsung Electronics ranked 1st overall in the whole global semiconductor market on the back of memory sales. The Korean company has a different story in the non-memory segment. The market survey firm Gartner reported that the United States topped the non-memory segment with a 63 percent share as of 2017, followed by the European Union (13 percent), Japan (11 percent), China (4 percent) and South Korea (3.4 percent).
According to Strategy Analytics, Qualcomm of the United States led the market of mobile AP, an equivalent to the brain of smartphone, with a 37 percent share whereas Samsung Electronics ranked fifth with a meager 11.7 percent share.
According to TSR, Samsung Electronics ranked 2nd with a 30.4 percent share, following Sony of Japan with a 31.7 percent share, a leader of the image sensor segment. Samsung Electronics, which ventured into the foundry segment in 2005, posted sales approximately one-third of those of TSMC, which launched the business in 1988.
The value of the global memory market stood at $16.58 billion (about 185 trillion won) while that of the global non-memory market amounted to about 357 trillion won. The latter is predicted to log an annual growth rate of 3.4 percent between 2018 and 2022, but the figure is forecast to soar to 4.8 percent during the same period.
Samsung Electronics lost the global No. 1 semiconductor position to Intel of the United States about one and half years since the second quarter of 2017 when the former rose to the top, surpassing the latter. The loss was attributable to the so-called memory semiconductor shock in which declining chip prices delivered a blow to Samsung Electronics, affecting its Q4 2018 business performance outcomes.
Announcing its Q4 2018 outcomes on Jan. 31, Samsung Electronics saw its operating profit in the semiconductor business plunge to 7.77 trillion won, a 43 percent loss from 13.65 trillion won from the previous quarter. The company also saw sales in the business drop 24 percent to 18.75 trillion won. The sales figure for Samsung was some 2 trillion won lower than sales Intel announced earlier.
Samsung Electronics was on a roll last year for the second straight year as the company raked in 243.77 trillion won in sales and 58,89 trillion won in operating profit, the best-ever performance. The memory semiconductor show gave a dent to Samsung’s semiconductor legend.