Samsung Electronics has overtaken Intel as world's biggest maker of semi-conductors : Gartner

According to a study by Gartner, Samsung Electronics has overtaken US rival Intel as the world's biggest maker of semi-conductors as sales, while worldwide semiconductor revenue totalled $419.7 billion in 2017, a 22.2 percent increase from 2016.

"The largest memory supplier, Samsung Electronics, gained the most market share and took the No. 1 position from Intel - the first time Intel has been toppled since 1992," said Andrew Norwood, research vice president at Gartner.

He said, "Memory accounted for more than two-thirds of all semiconductor revenue growth in 2017, and became the largest semiconductor category."

The report said that second-placed Intel grew its revenue 6.7 percent in 2017, driven by 6 percent growth in data center processor revenue due to demand from cloud and communications service providers.

Intel's PC processor revenue grew more slowly at 1.9 percent, but average PC prices are on the rise again after years of decline following the market's shift from traditional desktops toward two-in-one and ultramobile devices.

The key driver behind the booming memory revenue were higher prices due to a supply shortage, the study said.

NAND flash prices increased year-on-year for the first time ever, up 17 percent, while DRAM prices rose 44 percent.

Gartner pointed out that, the current rankings may not last long, however, "Samsung's lead is literally built on sand, in the form of memory silicon," said Norwood. "Memory pricing will weaken in 2018, initially for NAND flash and then DRAM in 2019 as China increases its memory production capacity. We then expect Samsung to lose a lot of the revenue gains it has made."

"2017 was a relatively quiet year for mergers and acquisitions. Qualcomm's acquisition of NXP was one big deal that was expected to close in 2017, but did not. Qualcomm still plans to complete the deal in 2018, but this has now been complicated by Broadcom's attempted takeover of Qualcomm," Gartner further said.

"The combined revenues of Broadcom, Qualcomm and NXP were $41.2 billion in 2017 - a total beaten only by Samsung and Intel," said Norwood. "If Broadcom can finalize this double acquisition and Samsung's memory revenue falls as forecast, then Samsung could slip to third place during the next memory downturn in 2019."