Samsung's chip division, which propelled it to record second quarter earnings, could be almost twice the size of Intel's entire business. The South Korean electronics giant reported operating profit of 8.03 trillion Korean won ($7.21 billion) in its semiconductor division in the three months to June, accounting for more than 57 percent of its entire earnings. Revenues came in at 17.58 trillion Korean won or $15.78 billion. U.S. rival Intel, which is a semiconductor giant, is set to report second quarter earnings after the market close on Thursday. Analysts surveyed by Reuters are expecting an operating profit of $3.89 billion in the second quarter. If that is realized, Samsung's semiconductor business alone would be almost twice the size of Intel's in terms of operating profit. Samsung first overtook Intel in the first quarter of 2017 when it reported operating profit in its semiconductor unit of 6.31 trillion Korean won or $5.66 billion, more than Intel's $3.9 billion figure. However, revenues were still slightly behind Intel. But the second quarter is shaping up to be the first time Samsung's operating profit and revenues for its chip division, will surpass those of Intel's whole business. The South Korean firm is still the world's largest smartphone player, and its recently-released flagship Galaxy S8 has performed well. But in recent times, it has been investing heavily in the chip business. Earlier this month it announced plans to invest $18 billion in South Korea in its chip business, as it doubles down on the division. "Based on its history, we believe Samsung is either entrenching itself in areas where it is a market share leader … or making a push to gain market share," investment bank Stifel said in a research note Thursday. A number of trends are driving the uptake of so-called NAND and DRAM chips Samsung produces, which can be used in devices such as laptops and smartphones, through to data centers. There is rising demand, but not enough supply, which is pushing prices higher. At the same time, the number of data centers are growing. Intel has been particularly strong in the data center business. Revenues in its data center group rose 8 percent in 2016 to $17.2 billion. But it is facing threats from Samsung, but also other players such as Nvidia and AMD. Investment house Jeffries downgraded Intel from hold to underperform earlier this month saying the chipmaker has the "most to lose" in the "4th tectonic shift in computing." The industry shifted from PCs to mobile at first. But now another shift is underway towards the internet of things, meaning loads of devices that are connected to the internet, as well as artificial intelligence. "As the incumbent with dominant share, we think INTC (Intel) has the most to lose," Jefferies analyst Mark Lipacis wrote in a research note dated July 10. Analysts have a mixed view on Intel shares. There are 4 strong buy ratings, 18 buys, 15 holds, 4 sells, and 2 strong sell ratings on the stock. But there does seem to be a growing consensus that feels Intel shares are undervalued, and the market is too bearish. And the company is also keeping abreast of changes in the semiconductor market. Earlier this month it unveiled a new line of chips aimed at servers and data centers called the Xeon Scalable Line. Intel touted improved performance and already a number of high-end customers are using the product. This was encouraging for some analysts. "While there are a lot of moving parts within the story, we think that an improving margin structure and continued focus on increasing operational efficiencies, coupled with a renewed focus on non-PC related growth markets will ultimately yield continuing improvement in profitability metrics," MKM Partners said in a note on July 12. The average price target for Intel's stock, according to analysts surveyed by Reuters, is $39.53, representing roughly 14 percent upside from Wednesday's close. But Intel's stock is down over 4 percent year-to-date. In contrast, Samsung has seen a 38 percent rally in the same period. The majority of analyst have either a strong buy or buy rating, with just two holds and no sellers. The average price target on the stock is 2,928,529 Korean won, representing 18 percent upside from Thursday's close.
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Despite its lackluster stock performance so far in 2017 -- Intel(NASDAQ: INTC) is down 4% year to date -- most analysts are relatively bullish heading into its second quarter earnings announcement, scheduled for Thursday after the close. The Street is expecting sales of $14.41 billion and earnings per share (EPS) of $0.68, both of which are in line with Intel's guidance for the quarter. The surprisingly strong PC market has helped boost Intel to a string of record-breaking quarters, though most pundits agree that's a bit worrisome because that kind of growth isn't sustainable. Unfortunately, an uncertain PC market isn't the only thing that has shareholders worried. The self-proclaimed "data center first" chipmaker is showing signs of weakness where it matters most. On a positive noteAssuming Intel was able to hit its revenue target in Q2, that would amount to a 6.5% jump from last year's $13.53 billion. Not exactly a home run, but more than adequate given CEO Brian Krzanich's ongoing transition of the company away from its longtime focus on PCs and toward cloud-based data centers, security, commercial drones, virtual reality, and the Internet of Things (IoT). Better still, not all of Intel's revenue gains were derived from PCs last quarter, though the division's 8% increase in sales to $8 billion made it the largest unit by a wide margin. Sales of the nonvolatile memory solid state drivers used to power IoT infrastructures soared 55% to $866 million in Q1, and likely jumped significantly again in Q2, when its Optane solution became more readily available. Data center sales continued to climb in Q1, and that segment is generating a larger portion of total sales with each passing month. And based on the explosive growth expected from both the cloud and IoT markets, Intel is also wise to be zeroed in on the opportunities presented in data security. So far, so good -- right? The not-so-good newsIntel made a sound business decision to shift its focus away from chips for PCs and drive full steam ahead into cutting-edge new markets. However, the fact that it's already losing some of that steam, particularly in data center revenue, is something shareholders should really worry about. To kick off the year, Intel reported $4.2 billion in Q1 data center sales, which was a mere 6% year-over-year improvement. That's distressing on a couple of fronts. First, Intel's push into data centers is still relatively new, yet its growth rate is slowing alarmingly. And in a market expected to climb to $360 billion by 2023, sluggishness in a critical unit at a time when it should be reporting high double-digit-percentage gains appears problematic, to say the least. For some perspective, NVIDIA(NASDAQ: NVDA) reported that revenue from its data center graphic processing unit (GPU) unit nearly tripled last quarter, making it a primary driver of its whopping 48% jump in sales to $1.94 billion. Intel is also fighting for a share of the AI-focused data center GPU market, but its longtime competitor NVIDIA is gaining, and gaining fast. Intel's IoT division fared slightly better than its data center group, with revenues rising 11% to $721 million in Q1, but at such an early stage in another explosive market, that's not exactly stellar growth. Remarkably, Intel's data security sales actually declined 1% year-over-year to $534 million. Given that this contraction occurred despite Intel's data-center initiative -- which ought to dovetail neatly with its security solutions -- this too should worry shareholders. Did Intel manage to light a fire in Q2 under the divisions that are slated to power its future, thereby taking some of the pressure to carry the company off its PC unit? Intel needs to answer that question in the affirmative when it announces Q2 results on Thursday. If it doesn't, expect shareholders' worries to continue to mount. 10 stocks we like better than Intel When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Intel wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of July 6, 2017 Tim Brugger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy. [unable to retrieve full-text content]
Analyst Matthew Ramsay (via Barron's) recently offered some thoughts on chipmaker Intel (NASDAQ:INTC) and, specifically, its data center group (DCG), following a "lunch discussion" with investors:
Apparently, Ramsay got "zero hands," which he reportedly said served to illustrate the "skeptical sentiment regarding Intel's datacenter growth prospects amidst new competition" from both direct competitors in the server CPU market as well as indirectly from vendors of specialized accelerators that can be much more efficient than traditional CPUs for some tasks. Competitive threats pose risks to Intel's DCG business in two ways. First, to the extent that Intel loses market segment share, it's losing orders and, ultimately, revenue that it would've had in the absence of competitive alternatives. Next, even if Intel can continue to win the substantial majority of business in a competitive environment, the company may be forced to reduce its asking prices on processors (as well as related platform components) to achieve those wins. The analyst said that though his team was "impressed with many features the Purley server platform and Skylake CPUs introduce," they "tend to agree" that Intel's DCG returning to double-digit revenue growth is a tall order and ultimately expects 7.6% and 8.5% DCG growth in 2017 and 2018, respectively. The bar is set -- Intel needs to clear itAt Intel's February investor meeting, the company told investors that it expects DCG to see "high single digit" revenue growth in 2017, but that from 2018 through 2021, it expects this business to enjoy a "low double digit [compounded annual growth rate]." This long-term forecast suggests that Intel expects to see double-digit DCG growth in 2018 -- and beyond. Now, to be perfectly blunt, Intel's track record with respect to predicting the growth in DCG has been rather poor. The company's previous long-term revenue growth goal for DCG of 15% compound annual growth turned out to be quite optimistic in the face of reality. No doubt, the fact that Intel routinely missed that target led it to reduce its long-term forecast to "double-digit" growth. At this point, Intel has a credibility problem with respect to its ability to forecast its data center growth rates. If Intel can show, beginning in 2018, that it can consistently achieve double-digit revenue growth rates in DCG, even in this fiercer competitive environment, then investors and analysts might be more willing to give Intel the benefit of the doubt and price in low-double-digit revenue growth in DCG But for now, the skepticism that Ramsay expresses in his note seems completely warranted. Read More 1 Thing This Intel Corporation Analyst Is Worried About : http://ift.tt/2tKATcpFor a while now, I've expressed my disappointment with Intel's (NASDAQ:INTC)management, and in particular the company's CEO, Brian Krzanich. I've followed Intel for many years, and the execution under Krzanich is some of the worst I've ever seen from the company. Intel's efforts in mobile applications processors were costly and yielded nothing but late-to-market, sub-par products, and the company's execution in chip manufacturing technology -- arguably the company's core competency -- has gone from strong, with its successful 45nm, 32nm, and 22nm generations; to poor, with its 14nm generation; to downright abysmal with its 10nm technology. Let's consider, then, just how bad Intel's execution on its 10nm technology has been, how it has hurt Intel's product portfolio. A full generation lateIntel used to aspire to release new chip manufacturing technologies every two years -- though Intel will concede that it's been more like two and a half years per generation. In any event, this is the cadence that Intel's product designers had traditionally planned their product designs around. Intel's 10nm technology was originally supposed to go into production by the end of 2015, but that ultimately didn't happen. Then, Intel told investors it expected to be shipping a substantial quantity of chips built using its 10nm by the second half of 2017. That, too, didn't happen. Intel is now claiming it will "introduce" its first 10nm products by the end of 2017, with serious volumes coming in 2018. Credible leaks have revealed that Intel is targeting availability more in the middle of 2018. A delay in the mass-production start from the end of 2015 to the end of 2017 is a delay of two years, or roughly a full generation, at least back when an Intel generation was defined as roughly two years. As if it couldn't get any worse, by Intel's own admission, its first- and second-generation 10nm technologies -- 10nm and 10nm+, respectively -- will offer worse performance than its upcoming 14nm++ technology . Intel says the company's 10nm technology won't open up a clear performance lead over its 14nm++ technology until its third iteration -- known as 10nm++ -- which should go into production sometime in 2020. This is an extreme failure on the part of Intel's chip manufacturing group. It's the sort of execution one would expect from a third-tier chipmaker with a limited research-and-development budget, inexperienced management, and a short track record -- not from an organization that holds itself out as the "leader" in chip manufacturing. The impact on the product portfolioThat Intel is late to transition to 10nm is itself a big failure, but the problem is that this transition has negatively affected the company's product portfolio and product pipeline through approximately 2019. Since Intel's product planners had originally counted on having 10nm in production by the end of 2015 for mid-to-late 2016 product introductions, they seemingly didn't plan on having to bring further innovations to its Core processors manufactured on its 14nm technology. Then, when it became clear that the company's 10nm technology wouldn't be ready in time, Krzanich admitted to investors that the company had "inserted" another generation of 14nm products onto its product road map that'd begin rolling out in the second half of 2016. What Intel executives called the "third wave" of 14nm products, Kaby Lake, turned out to be little more than Intel's sixth-generation Core processors but implemented in a performance-enhanced variant of the company's initial 14nm technology, called 14nm+. Intel made no significant changes to the underlying architecture of the processors. Intel also recently admitted at its analyst day back in February that it would be adding a fourth wave of processors built on its 14nm technology. This time, Intel once again isn't making any changes to the underlying architecture of the chips, as they'll have the same basic CPU core and graphics from the sixth-generation Core, but it is expected to grow the number of cores in its products to try to achieve a performance boost. And, naturally, Intel will be using a yet-again enhanced version of its 14nm technology, known as 14nm++. Had Intel's 10nm technology come out on the original schedule, not only would Intel have enjoyed the benefits of transitioning to a fundamentally new manufacturing technology, but its products would also feature higher-performing, more efficient, and more feature-packed architectures. Indeed, if Intel had stuck to schedule, its Cannon Lake family of products -- its first-generation 10nm parts -- would've arrived in either late 2016 or early 2017. And the company would probably be on the cusp of releasing its Ice Lake family of products -- its second-generation 10nm parts -- right around now, or perhaps in early 2018. So Intel loses twice here. Not only have these delays hurt Intel's product pipeline today, but those very same delays also mean that products that were designed to be out today come out tomorrow. It's a domino effect, and it's going to take an exceptional management team to recover from this debacle. The problem is, the same team that got the company into this mess is now tasked with getting it out of it. Good luck, Intel. Read More The Price of Intel Corporation's 10-Nanometer Failure : http://ift.tt/2h2LFENTwo years after launching the Curie-powered Arduino 101 maker board, Intel is calling it quits on the hardware. The chip-maker has announced the end-of-life for its Curie Module, which launched in 2015, and was integrated into the $30 Arduino 101 to become an Intel Quark-based alternative to the more common ARM based Arduino boards. With the end of Curie, the Arduino 101 will also shortly be removed from the market, though Intel claims it is "actively working with alternative manufacturers" to continue supplying the Arduino 101. Intel has recently stepped back from a number of consumer products that it was talking up in 2014 with an eye on wearables and consumer IoT. In June Intel announced the end for Galileo, Joule, and Edison compute modules, but didn't mention Curie, which powered wearables from Oakley and Tag Heuer. Last week CNBC reported Intel had axed 80 percent of its Basis smartwatch and fitness-tracker group. Intel's R&D unit, the New Technologies Group, had dropped wearables to focus on augmented reality, according to the report. Killing Curie and the Arduino 101 effectively ends Intel's maker-market exploration, unless it revives the maker board with another manufacturer. Curie will be available until September 15 and it will stop taking orders for the Arduino 101 on September 17. "After September 15, 2017, Intel will make its online resources available for review only and maintain availability to the Intel Curie community until June 15, 2020. Files licensed under open source licenses will continue to be generally available in binary and source code on GitHub," Intel notes on its developer forum. Read More Intel drops Arduino 101 maker board and Curie module : http://ift.tt/2uWB6J3Shares of Intel(NASDAQ: INTC) are languishing at the lower end of their 52-week range after failing to gain any traction this year. The chip giant has struggled thanks to a variety of challenges including a declining PC market, market share loss in central processing units (CPUs), and stiff competition in emerging technologies such as driverless cars. Intel investors will be hoping to see some relief when the company releases its fiscal second-quarter results after the market closes on July 27. But will Chipzilla be able to deliver or will its struggles continue? Here's what investors should expect from the company's upcoming results. The headline numbersWall Street expects Intel's revenue to have jumped 6.4% year over year to $14.4 billion during the second quarter, while its earnings per share are expected to go from $0.59 in the prior-year period to $0.68. Analysts have dialed up their estimates in line with the company guidance that was issued at the end of April, which means that Intel shouldn't have much difficulty in meeting the expectations. But investors need to keep in mind that rivals such as AMD have gained impressive ground in the CPU space of late, posing a challenge for Intel's client computing group that includes sales of PC processors. The client computing group is Intel's biggest business segment as it accounts for almost 54% of the total revenue and 80% of the profits. The company has managed to keep this segment strong by pushing up the average selling prices of its processors and other products, but the strategy might not be sustainable. Recent reports suggest that AMD has made significant gains in the CPU market, eroding Intel's market share. More specifically, AMD's CPU market share is estimated to have increased to 26.2% at the beginning of the third quarter as against 18.1% at the beginning of the year. Intel started cutting the prices of its processors in Q1 to claw back market share from AMD, which could lead to weaker revenue and margins. Gauging the outlookIntel's client computing group is the key to the company's performance for the remainder of the year given its contribution to the company's top and bottom lines. As a result, it is not surprising to see why analysts expect the company's revenue to slide year over year during the third quarter on the back of a weak PC market and new processor launches by rivals. Gartner forecasts that PC shipments (including both desktops and notebooks) will drop to 203 million units this year as compared to 220 million units in 2016. This is bad news for Intel as it dominates the processor space with a market share of almost 75%. Furthermore, AMD isn't done yet with the launch of its new Ryzen CPUs. The company is now going after the mobile PC market with new chips that are set to be launched early next year, following the release of its latest Ryzen 3 chips at an aggressive price point. AMD's focus on the mobile PC market could reap rich rewards as shipments of such premium mobile PCs could grow from 50 million units last year to an estimated 82 million units by 2019, as per Gartner's estimates. It won't be surprising if Intel's outlook takes a hit on account of the challenges discussed above. 10 stocks we like better than Intel When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Intel wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of July 6, 2017 Translation: It's all yours, ARM. Take it awayIntel's flirtation with the maker community appears to have fizzled out, although the chip giant insists its passion remains. After announcing plans to axe its Edison, Galileo, and Joule compute modules later this year, Chipzilla has said it will stop making its Arduino 101 board and its much-hyped Curie module, too. The Arduino 101 will be available for order until September 17, 2017, according to Intel, and the processor giant will continue to fulfill orders, if any, through December 17, 2017. The Curie module will be available until January 17, 2018, and fulfillment will continue until July 17, 2018. Intel will no longer update its Curie Open Developer Kit. It plans to leave its community forum for Curie products open until September 15, 2017. After that, the forum enters review-only maintenance mode until June 15, 2020. Intel's GitHub repo, which contains a variety of code related to other projects too, should continue to be available. Intel says it's trying to find another manufacturer for the Arduino board. In an statement emailed to The Register, a spokesperson said: "Intel remains an enthusiastic supporter of the maker community and maker mindset. We will continue to support tomorrow’s makers through education and community outreach programs such as Maker Share." Intel just won't be making the hardware. Mark Hung, an analyst with consultancy Gartner, explained in a phone interview with The Register that these products fall under Intel's New Technology Group (NTG) rather than its enterprise-oriented Internet of Things group (IoTG). The NTG was formed in 2015 through the restructuring of Intel's New Devices Group. "There have been a lot of changes in that group," he said. "The future of the New Technology Group may be a bit uncertain now." Earlier this month, The Silicon Valley Business Journal reported that Intel planned to layoff 140 workers related to these discontinued products. Intel, said Hung, "really has not made much of a dent in the consumer IoT space." It appears Intel is getting out of the consumer IoT market to focus on the enterprise sector, he said. For sure, the Curie module, launched amid muchfanfare, didn't really go anywhere. During Intel's April conference call for investors, CEO Brian Krzanich highlighted the IoTG's 11 per cent year over year revenue growth in Q1. The NTG did not get mentioned. ® President Trump's former campaign manager Paul Manafort met with the Senate Intelligence Committee on Tuesday as part of the panel's investigation into Russian election meddling, The New York Times reported. Manafort's appearance before the intelligence panel in a closed session came as the Senate Judiciary Committee issued a subpoena for the former campaign manager to testify publicly on Wednesday. Both committees are investigating Russia's efforts to interfere in the 2016 presidential election, as well as possible collusion between the Trump campaign and Moscow. ADVERTISEMENT Manafort's Tuesday appearance reportedly focused on his presence at a June 2016 meeting with a Russian lawyer who had promised dirt on Hillary ClintonHillary Rodham ClintonElection Commission’s focus will lead to suppressive voting lawsManafort meets with Senate intel panel: reportRyan: It's Trump's 'prerogative' to fire SessionsMORE. Also present at that meeting were President Trump's son-in-law Jared Kushner and the president's eldest son, Donald TrumpDonald TrumpTrump blocks Chrissy Teigen after she tweeted 'lol no one likes you'Election Commission’s focus will lead to suppressive voting lawsManafort meets with Senate intel panel: reportMORE Jr., who arranged the gathering. Kushner spoke to the intelligence committee on Monday, where he denied any collusion or improper contact with Russian officials, according to prepared remarks. Manafort is among the central figures in the ongoing special counsel and congressional probes into Russia's interference in the 2016 election. He previously worked as a consultant for a pro-Russia political party in Ukraine. He disclosed to the Justice Department in June that his firm, DMP International, received more than $17 million in payments from that party for work done between 2012 and 2014. The judiciary committee is scheduled to hold a hearing on Wednesday about the Foreign Agents Registration Act (FARA), which requires those lobbying on behalf of foreign interests to register with the Justice Department. Read More Manafort meets with Senate intel panel: report : http://ift.tt/2tzNk6qSamsung Electronics is expected to end Intel’s quarter-century reign as the world’s biggest chipmaker by sales and outstrip smartphone rival Apple in quarterly profits in the coming days, thanks to booming demand for one of its simplest products: the humble memory chip. Increased uses, from smartphones to cars and the “Internet of Things”, have led to capacity shortages for flash memory chips, driving up prices, with Samsung the main beneficiary. At the same time, the traditional PC processor market, Intel’s mainstay, continues to shrink. The initial rise of the IBM PC carried Intel to the top of the semiconductor market in 1992, when it overtook then-leader NEC. That era is set to end on Thursday when Intel and Samsung report their latest results. The Korean group’s anticipated semiconductor revenues of up to $15bn are expected to exceed its US rival’s sales forecast of $14.4bn for the second quarter. “Samsung is doing phenomenally well in memory, which is a critical part of a huge diversity of products, and demand is far outstripping supply,” said Geoff Blaber, a Silicon Valley-based analyst at CCS Insight. Analysts at Gartner, the IT researcher, predict worldwide semiconductor revenues will exceed $400bn this year for the first time, thanks largely to a 52 per cent increase in the memory market, where Samsung has a dominant share. “This gives Samsung its best shot at capturing the number one position from Intel for the first time” over the year as a whole, said Gartner chips analyst Andrew Norwood.
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However, analysts are divided over whether a generational shift is taking place or if the memory industry is merely at the top of yet anotherboom-bust cycle. “Whatever revenue gains put Samsung atop Intel today will probably be shortlived,” said Tim Bajarin, analyst at Creative Strategies. The global memory chip industry is riding high on an unprecedented supercycle amid soaring demand for data storage, which has delivered bumper earnings for top-tier companies such as Samsung and SK Hynix, as they struggle to fulfil roaring demand from internet-connected devices and data servers. As a result of the imbalance in supply and demand, memory chip prices have doubled over the past year. Share prices of memory players have risen 155 per cent on average from their most recent cyclical bottom in 2016. SK Hynix said on Tuesday its net profit surged 763 per cent to Won2.5tn ($2.2bn) in the second quarter, compared to a year earlier. The memory boom is driving Samsung to post record quarterly earnings that are likely to make it the world’s most profitable non-financial company. Its $12.1bn in operating profit for the June quarter is likely to surpass the $10.5bn that analysts expect Apple to report next Tuesday, although the last quarter is typically the iPhone maker’s slowest. The seeds of Samsung’s dominance in memory chips were sown almost a decade ago, when the industry cycle had swung towards a glut. In 2008, capacity overexpansion coupled with the global financial downturn forced many suppliers to turn away from flash memory, Mr Bajarin says. But while others pulled back, Samsung expanded its commitment. “They took a very strategic focus on memory,” Mr Bajarin said. “To their credit, they saw this as a big opportunity.”
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Today, Samsung’s operating profit margins from Dram memory — commonly used in PCs and data centre servers — and NAND flash memory chips are estimated at more than 60 per cent and 45 per cent respectively. The company is spending heavily in a range of semiconductors, with an estimated capital spending of $12.5bn this year, but the bulk of the recent investment has been made in NAND chips, the staple memory for smartphones, solid-state drives and camera memory cards. “There is a ballooning number of devices and endpoints that are going to require memory and keep demand high,” says Mr Blaber. “Samsung has a substantial scale advantage so their cost base is vastly more competitive.” As Samsung ploughed resources into flash memory over the past decade, Intel’s investments in mobile over the same period have yielded few significant results. It took until last year’s iPhone 7 for a leading smartphone to have “Intel inside”, in the form of a modem. Despite missing the smartphone boom, Intel has successfully defended its share of the PC market from rivals such as AMD, even as the industry’s unit sales declined from 400m at their peak to around 270m computers today. Intel has also seen growth in data centres, giving it a key foothold in the next era of cloud computing and allowing it to sustain its position at the top of the industry — at least, until now. As Intel and rivals such as Qualcomm and Nvidia wait for the next wave of growth beyond the smartphone, today’s income from hyped sectors such as the Internet of Things and Artificial Intelligence remain small in relative terms. Last year, Intel generated $2.6bn in revenues from its Internet of Things group, up 8 per cent on 2015, but only 4 per cent of its $59.4bn total sales for 2016.
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“We haven’t got to that tipping point where [IoT] becomes a meaningful revenue source,” said Mr Blaber. “Until we get to that transition, you would expect this dynamic of Samsung overtaking Intel to hold true.” However, Mr Bajarin disagrees, pointing to Intel’s investment in a new form of high-speed memory, 3D XPoint. “Within two to three years you might see that swing again when Intel takes the leadership position in pure revenue terms,” he said. Either way, the good times for the flash memory industry cannot last for ever, especially when Chinese companies are eager to catch up in the highly competitive industry. It is expected to take several years for it to become a big producer, but the country has spent $150bn since 2014 on developing the sector. “Overinvestment, particularly from China, remains the primary risk,” said Mike Howard, senior director at IHS Markit on the chances of a bust. “Overinvestment and thereby too much supply growth is the biggest threat for Dram and NAND, and it’s likely a question of when and not if.” Read More Samsung poised to dethrone Intel as chip king : http://ift.tt/2tGEbNC |
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