Samsung Elec lags behind TSMC, Intel in global chip market

[Photo by Yonhap]

South Korea’s No. 1 semiconductor producer Samsung Electronics has not only lost its ground to memory archrival Intel but trail far behind foundry giant TSMC in chip sales this year, making the outlook for the Korean memory giant look gloomy.

According to sources on Thursday, the Taiwan-based chip manufacturer TSMC, which is also the world’s biggest foundry player, is projected to cement its No. 1 position in global chip sales in the fourth quarter after it beat Samsung Electronics in chip sales for the first time in the third quarter.

TSMC’s sales came to NT$432.97 billion ($15.7 billion) in October and November, up by 20.8 percent from the same period a year earlier. If the current trend continues, its global chip sales are expected to reach NT$633 billion in the fourth quarter.

In contrast, Samsung’s sales outlook for the last quarter of this year is not bright. Samsung Electronics is expected to post 76.71 trillion won ($58.5 billion) in total sales for the quarter versus 76.78 trillion won in the previous quarter, according to a market consensus polled by FnGuide. Sales in the company’s flagship chip business are expected to be about 21.5 trillion won on average based on estimates from three securities firms, which is lower than its foundry rival TSMC’s fourth-quarter sales estimate.

Samsung Electronics, which raced with U.S. Intel for the No. 1 spot in semiconductors, gave way to TSMC for the first time in the third quarter of this year. TSMC has continued an upward trajectory bolstered by strong foundry orders from its key clients Apple and AMD.

In terms of cumulative sales, excluding foundry sales, for the first three quarters of this year, Samsung Electronics ranked second behind Intel, according to Omdia, which tracks performance of semiconductor companies excluding foundries.

As a recession is in full swing in the market of memory chips, which accounts for about 70 percent of Samsung’s semiconductor revenue, there is no sign of immediate recovery in Samsung Electronics’ chip sales. According to DRAMeXchange, contract prices for DRAM and NAND flash fell by 22.46 percent and 3.74 percent, respectively, in October.