Intel's lead in semiconductors could be challenged by Samsung
Intel has seen the launch of the first smartphone to use its Medfield processor in the Lava International Xolo X900 which was released in India. Lenovo and Motorola both plan on building smartphones with Intel inside, but the chip maker is well behind leaders like the Samsung Exynos processor and the Qualcomm Snapdragon. The $311 billion semiconductor industry is no longer led by PC's and laptops. Now, it is smartphones and tablets that are running the show. In an example of this, Samsung, which is the leader in memory chips for computers, is converting some production from those memory chips to logic chips used in mobile devices and will spend $2 billion for a new logic chip plant in South Korea where the company is based. And now the Intel-Microsoft combination which for years was the choice for PC makers, is being threatened by the Redmond based software giant's decision to offer ARM based tablets running Windows 8. The scary thing for Intel is that this could suggest that ARM based processors could be eventually used in PCs, eliminating the need for the chip that provides the lion's share of Intel's revenue.
Can Samsung catch up and overtake Intel? Last year Intel sold $48.7 billion in chips, about $20 billion more than Samsung sold according to iSuppli. How can the Korean based tech titan pass Samsung? At least one analyst says it would require a huge growth in Samsung's memory chip sales and a stumble by Intel. Mike Howard, an analyst at iSuppli, says that while Samsung could have trouble growing its share in memory chips, he sees Intel having to form a major alliance long term to hold off Samsung. If Samsung does have one disadvantage, because it produces smartphones and tablets as well as the chips inside, some producers of mobile devices might not award business to them. Another battle will be in the manufacturing process. Samsung expects to produce 14nm and 20nm Exynos chips next year while Intel is spending $5 billion to build a factory in Chandler, Arizona to manufacture 15nm chips. And that sus up the whole semiconductor picture. With Intel and Samsung battling for supremacy of the semiconductor market, it is the end user that will benefit from the smaller and faster chips being made.