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For the First Time in 25 Years, There's a New Semiconductor Leader

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For the First Time in 25 Years, There's a New Semiconductor Leader

Let's reflect on Intel's 25-year dominance of a leader in the semiconductor world and how new leader Samsung might try to match Intel's historic run.

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The year was 1992, 25 years ago. The world was a different place.

To put things into perspective, here is a sample of the events that were taking place:

From a technology perspective:

All the technical items required a microprocessor to power the respective technology, and 25 years ago Intel, became the leader in semiconductor advancement.

Intel's Market Leading Journey

Intel's journey began in 1968, but did not reach household recognition until about 20 years later, when Intel invested heavily on microchip design in order to contribute to the rapid growth of the computer industry. Personal computers (PCs) were at an all-time high, fueling start-up companies to enter the red-hot market to cash in on the demand — often via advertisements in publications like Computer Shopper magazine.

Teaming up with the popularity of Microsoft Windows, Intel experienced a 10-year period of unprecedented growth. This growth is reflected in the following chart depicting Intel's (INTC) stock history on the NASDAQ exchange:

Image title

Intel reached its peak (to date) stock price in August 2000, when the closing price nearly breached the $75 (USD) per share level, closing at $74.875.

Then 2017 Arrived

The popularity and advancement of mobile devices, paired with the curbed sales cycle of personal computers, caused the dominance of Intel in the semiconductor market to level out and eventually decline. Early on, Intel saw this future and participated in a number of acquisitions to protect the Intel brand. From 2009-2017, Intel acquired 24 companies, including well-known security provider, McAfee. Several of the acquisitions focused on security products or wearable technology — an indicator of the target markets Intel is interesting in pursuing.

At the end of 2016, Intel announced its revenue as follows:

  • Client (PC and mobile) 55%

  • Data Center 29%

  • Memory 4%

  • Internet of Things (IoT) 4%

Despite a portion of the client segment containing mobile devices, Samsung surpassed Intel in the semiconductor space, generating $8 trillion in operating income on revenue of over $17 trillion in the second quarter of 2017, leading to an expected $15.8 billion for the quarter. By comparison, Intel reported $2.8 billion on sales of $14.8 billion. The quarterly expectation is to be $14.4 billion.

Looking Ahead

For Intel, their focus for the next five years is to focus on the flash memory segment, as well as IoT technologies. They expect the client segment to continue to fall, as the PC market continues to suffer from a lack of demand. The data center aspect is expected to remain the same. Some believe Intel may be arriving to these new market segments later than optimal, but their 50 years of industry experience should provide an advantage to others in the same space.

For new market leader Samsung, their focus is to continue being the leader in the microchip segment — mirroring the success Intel experienced during their highpoint as a result of the personal computer growth. With limited competitors, Samsung is posed to achieve similar results, but one should not expect the twenty-five-year dominance that Intel was able to maintain.

What are your thoughts? How long will Samsung maintain the market leader role? Will Intel reach this level of success again? What technology or company is poised to become the next dominant leader?

Have a really great day!

Take a deep dive into Bluetooth mesh. Read the tech overview and discover new IoT innovations.

Topics:
iot ,microprocessors ,intel ,samsung ,semiconductor

Opinions expressed by DZone contributors are their own.

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