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Samsung Electronics

Samsung inches closer to Intel as chip market posts Q2 growth despite pandemic

Aug 05, 2020 (Gmt+09:00)

Samsung Electronics Co. is seen narrowing its chip business revenue with Intel Corp. as the global semiconductor market continues to grow despite the Covid-19 pandemic.

According to data released by corporate tracker CEO Score on Wednesday, Samsung's chip business logged 64.94 trillion won ($55 billion) in revenue last year, up 63.5% from 39.73 trillion won ($33 billion) in 2014, whereas Intel’s chip sales gained 42.6% to 83.89 trillion won from 58.84 trillion won in the same period.

That means the differential chip revenue between the two global tech giants narrowed to 1.3 times in 2019 from 1.5 times five years earlier.

The two chipmakers are competing fiercely for global leadership, and last year Samsung was relegated to the second place in terms of chip sales for the first time in three years, weighed by lower prices of its mainstay memory chips, while Intel reclaimed its position as the top global semiconductor vendor.

RESILIENT GLOBAL CHIP MARKET

Samsung’s business performance could gain traction going forward as the global component market is showing resilience amid the coronavirus pandemic.

The Semiconductor Industry Association reported on Wednesday that worldwide sales of semiconductors were $34.5 billion in June, an increase of 5.1% from $32.9 billion in the same month of last year. Sales during the second quarter also rose 5.1% year on year to $103.6 billion despite COVID-19 disrupting chip production and distribution worldwide.

Monthly sales compiled by the World Semiconductor Trade Statistics organization showed that sales growth in June were pronounced in Americas and China.

On a year-on-year basis, sales in the Americas and China increased 29% and 4.7% in June, respectively, while revenues in Europe and Japan fell 17.1% and 2.2% each.

The SIA, however, warns that despite signs of improving business sentiment, the coronavirus pandemic could impact sales as the year wears on.

"Second-quarter semiconductor sales were roughly flat compared to the first quarter, and the global industry continues to post year-to-year sales increases, but significant uncertainty remains for the second half of the year due to ongoing macroeconomic headwinds," said John Neuffer, SIA president and CEO.

In the second quarter, worldwide sales of semiconductors posted a small decrease of 0.9% compared to the first quarter.

The organization’s industry outlook is supported by forecasts offered by many chipmakers. Several manufacturers have noted COVID-19 could continue to disrupt production and shipping operations, hurting sales. In addition, electronics makers might cut their component orders, citing weakening consumer demand.

By Jeong-Soo Hwang

hjs@hankyung.com

In-Soo Nam edited this article

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