Memory prices are expected to fall dramatically in the coming months, and so will the profits of their manufacturers. One of the primary semiconductor vendors, Samsung is predicted to see a drop of almost $15 billion in sales compared to last year. The company managed to rope in around $78.5 billion in 2018, but the forecast for this year is rather grim with analysts predicting a figure of $63.1 billion. This may be bad news for Samsung, but for CPU manufacturer, Intel it means that the company will once again climb to the top spot as the largest semiconductor producer after more than two years.
Earlier, Samsung had dethroned Intel in 2017 when memory prices were on the rise, but now the trends are reversing and team blue is back on top. Intel had held this position for quite a while, from 1993 to 2016 to be exact. However, this isn’t because the chip giant has been doing better than usual, but merely the result of falling memory prices which has been a cause of concern for not only Samsung but Micron and other major companies as well. Intel’s profits are projected to grow marginally this year from $69.9 to $70.6 billion.
In comparison to 2018, the memory market is expected to plummet by almost a quarter of the total value, and unfortunately for Samsung, that amounts to 83% of the chip revenue. NAND flash prices started declining last year, and DRAM prices have also been falling since the last quarter of 2018. Analyst firm, IC Insights has speculated that all key players in the memory sector including Samsung, SK Hynix, Micron and Toshiba will most likely suffer revenue drops of more than 20%.
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