Samsung Electronics, already a world leader in TVs and smartphones, is taking the fight to IntelCorp for the No.1 slot in semiconductors, betting on strong growth in so-called logic chips that are the brains inside today's fast-selling smart mobile devices.
Intel dominates the market for computer processors (CPUs) - its Intel Inside sticker is on around 80 per cent of the world's PCs - but future growth is in mobile application processors.
Demand for these is seen rising around 40 per cent annually through 2014, according to Nomura research, while growth in PC processors will be in single digits. By 2015, the global market for application processors (AP) will have jumped fourfold to $33 billion, while the CPU market will shrink by
more than a tenth to $34 billion, according to NH Investment & Securities.
That's good news for leading AP makers such as Samsung, Qualcomm, Texas Instruments and mobile chip designer ARM Holdings.
Intel has yet to set a marker in the mobile chip market. Samsung, which leads the market in memory chips that are used in computers, is converting some memory chip production lines to logic chips and will invest close to $2 billion in a new logic chip plant in South Korea, in a clear bet that smartphones and tablets will be the real growth driver for a $311 billion global semiconductor industry that is being shaken up by the rapid advances in technology and consumer gadgetry.
"The overall competition landscape will change as the boundary between CPU and AP blurs, with Intel trying mobile chips, and the performance of ARM-based APs improving to the level of CPU ... That indicates Samsung's ultimate target could be Intel and Qualcomm," said Greg Nho at HMC Investment & Securities.
Francis Sideco, analyst at research firm IHS iSuppli, predicted Samsung could overtake Intel in overall semiconductor output. "It's possible," he said. "But that would need Samsung to expand its (AP) customer base beyond themselves and Apple . Also, Intel would have to completely miss the boat on its mobile ambitions."
Samsung has a headstart as it builds application processors that power the world's most popular smartphones and tablets - the iPhone, iPad and Samsung's own Galaxy products.
Intel dominates the market for computer processors (CPUs) - its Intel Inside sticker is on around 80 per cent of the world's PCs - but future growth is in mobile application processors.
Demand for these is seen rising around 40 per cent annually through 2014, according to Nomura research, while growth in PC processors will be in single digits. By 2015, the global market for application processors (AP) will have jumped fourfold to $33 billion, while the CPU market will shrink by
more than a tenth to $34 billion, according to NH Investment & Securities.
That's good news for leading AP makers such as Samsung, Qualcomm, Texas Instruments and mobile chip designer ARM Holdings.
Intel has yet to set a marker in the mobile chip market. Samsung, which leads the market in memory chips that are used in computers, is converting some memory chip production lines to logic chips and will invest close to $2 billion in a new logic chip plant in South Korea, in a clear bet that smartphones and tablets will be the real growth driver for a $311 billion global semiconductor industry that is being shaken up by the rapid advances in technology and consumer gadgetry.
"The overall competition landscape will change as the boundary between CPU and AP blurs, with Intel trying mobile chips, and the performance of ARM-based APs improving to the level of CPU ... That indicates Samsung's ultimate target could be Intel and Qualcomm," said Greg Nho at HMC Investment & Securities.
Francis Sideco, analyst at research firm IHS iSuppli, predicted Samsung could overtake Intel in overall semiconductor output. "It's possible," he said. "But that would need Samsung to expand its (AP) customer base beyond themselves and Apple . Also, Intel would have to completely miss the boat on its mobile ambitions."
Samsung has a headstart as it builds application processors that power the world's most popular smartphones and tablets - the iPhone, iPad and Samsung's own Galaxy products.
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