Intel surges further ahead of Samsung in chip market

Though 2011 is a tough year for the semiconductor market, Intel has shown strength

Intel has taken on a challenge from Samsung Electronics head-on by picking up the pace and regaining its long-held dominance in the worldwide chip market.

In a challenging year for the semiconductor business, Intel has outpaced its rivals, including Samsung and AMD, according to IHS iSuppli.

The market researcher projects that Intel's 2011 semiconductor revenues will total $49.7 billion, up 23% from 2010.

The total would give Intel 15.9% of the global semiconductor market, up from a 13.2% share in 2010.

Intel this year slowed what had been a growing threat from Samsung, which had narrowed the market share gap for three years prior to 2011, eventually getting to withing 3.9 percentage points of Intel's share. Intel is now projected to finish 2011 6.5 percentage pooints ahead of Samsung, according to iSuppli.

"In a challenging year for the semiconductor market, Intel achieved success on all fronts, expanding its core microprocessor and memory businesses, while also capitalizing on a major acquisition," said iSuppli analyst Dale Ford in a statement. "This allowed the company to outgrow the market and expand its lead over its closest competitors, defying the impact of weak economic conditions and catastrophic natural disasters in Japan and Thailand."

Ford noted that Samsung benefited from being the leading global supplier of NAND flash memory during a time of solid growth in the memory sector. However, he added that Samsung also is the leading supplier of DRAM technology, a market whose overall revenue has declined by some 27% this year.

That DRAM sluggishness helped to limit Samsung's revenue growth to just 3% in 2011, iSuppli said.

Meanwhile, a spokesman for long-time Intel rival Advanced Micro Devices said this week that the chip maker is no longer going to focus on competing with Intel .

Analysts said it was time for AMD to stop focusing on being the bridesmaid to Intel's success and focus on its own business.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin , or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com .

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