Though Samsung seems to have taken the number one position in the semiconductor manufacturing sector, analyst firm IHS Markit states that the picture could be slightly different if the data is analysed closely.
Len Jelinek, senior director for semiconductor manufacturing at IHS Markit, is of the opinion that by looking closer at the actual revenues generated by the individual companies from the sale of their own products, a slightly different and more interesting picture emerges.
Data provided by individual companies show only a portion of the ‘actual’ total picture. In ranking the semiconductor industry companies’ revenues, IHS believes the focus should be on merchant market revenue, the revenue obtained by a company through the sale of their own semiconductor components. This means that in a market share calculation the sale of components to third parties should not be included since a third party will be credited with the component sale into the market.
According to IHS, the semiconductor revenues Intel achieved in the second quarter of 2017 were $14.7 billion. If the third-party sales or foundry operations and other non-semiconductor revenue are deducted, then the company’s merchant market semiconductor revenues stand at $14.4 billion.
Samsung announced total semiconductor revenues of $15.5 billion in the same quarter, which includes an estimated $1.1 billion of foundry services revenues. If subtracted the foundry revenues, Samsung’s merchant market sales end up at $14.4 billion.
Thus, since neither company formally discloses its actual third-party sales or other non-semiconductor revenues, both companies end up separated by a mere $57 million with Intel remaining as the leader. IHS believes that the rapid growth in revenues by Samsung is more a reflection on market supply-and-demand issues rather than a successful long-term strategic plan by either company.
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