The brief Samsung reign over Intel in the global semiconductor market came to an end over the last year, Gartner reports. The company held its own against the long-standing chip giant for the latter half of 2017 and well into 2018 before losing out again in 2019.
The loss wasn’t a small one either, with Samsung bringing in revenue on its market share at $13.579 billion under Intel’s $65.793 billion. The revenue difference was fairly stark too. Intel managed to pull in and hold 15.7-percent of the overall revenue, compared to ten other major players in the game. Samsung only held 12.5-percent at the year’s end.
Both companies led by a wide margin against the third-place competitor, SK Hynix. The global company only managed to pull around 5.4-percent of the market share, just over half of Samsung’s share. It also only brought in $22.478 billion in revenue compared to Samsung’s $52.214 billion.
How is the rest of the market looking?
Only one of the top ten companies and none the remaining “other” category managed to grow over the course of the fiscal 2019 year. In fact, Intel only seems to have beaten out Samsung on the basis that it lost less year-over-year revenue. Intel’s figures dropped by 0.7-percent. Samsung lost the third-most year-over-year at 29.1-percent.
That’s compared to SK Hynix’s 38-percent loss — the highest loss rate on the list. The second highest loss rate was for Micron Technology, which lost 32.6-percent in terms of growth.
The only company to gain revenue in 2019 is listed by Gartner as Kioxia (Toshiba Memory). The company managed to grow by a comparatively staggering 3.1-percent. But it only managed revenue at $8.797 billion and 2.1-percent of the overall market.
Will this have lasting consequences for Samsung’s semiconductor business?
The grim outlook is marked by an overall revenue drop year-over-year of approximately 11.9-percent, Gartner says. But the losses may be harder on Samsung than some others. That’s especially true since a significant portion of its gains have centered on memory chips and DRAM.
That’s despite heavy investments by the company in early 2019, meant to stave off competition. In April, it was reported that Samsung invested as much as $116 Billion to fight off stiffening market competition.
The memory market accounted for only 26.7-percent of sales in 2019. That’s a drop of 31.5-percent in revenue for the year. DRAM, specifically, declined by as much as 37.5-percent in 2019. That’s a significant cut for a company that has built its number one position on the sales of DRAM and memory.
The drop can best be attributed to an oversupply that began on the tail end of 2018, according to Gartner. And that lasted throughout the duration of 2019. The drop in demand itself was caused by a sharp decline in the hyperscale market.
Excesses in inventory at vendors, notably including Samsung, caused a severe decline in pricing, further resulting in declines in revenue. While Intel doesn’t necessarily rely heavily on DRAM or memory as Samsung does in the market, the source notes that in the second half of 2019, the pricing of that segment of the semiconductor market was lowered by as much as 47.4-percent. That placed Samsung at a disadvantage in the overall semiconductor market.