Intel, Samsung 'smell blood in the water'
January 23, 2012 // Dylan McGrath
Aggressive 2012 capital spending plans revealed this week by Intel Corp., and Samsung Electronics Co. Ltd., signal that the two largest chip firms see an opportunity to distance themselves from competitors and are ready to spend heavily to do it, according to a report by market research firm IC Insights Inc.
Based on the capital expenditure forecasts revealed this week, Intel and Samsung together are expected to account for about half of total semiconductor capital expenditures this year, IC Insights said.
Intel, which said Thursday (January 19) it plans to spend roughly $12.5 billion on capex, and Samsung, which revealed earlier this week it plans to spend about $12.2 billion on semiconductor capex, are each expected to more than double the 2012 capital expenditures of Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the third biggest spender, IC Insights said. TSMC said earlier this week it plans to spend about $6 billion on capex this year.
"It is apparent that for Samsung, Intel, and TSMC, the time has come to put the hammer down and position themselves as the strongest and most dominant IC suppliers in the industry," IC Insights said in an excerpt from the 2012 edition of the firm's McClean report. IC Insights said the three firms are becoming more dominant in their areas of specialization and that smaller competitors may soon find it extremely challenging to remain competitive in developing new products or competing on a cost basis.
"Weaker suppliers will be forced out of the business and a higher percentage of capex spending will be in the hands of the fewer remaining players," IC Insights said.
Since 2009, Intel, Samsung and TSMC have boosted capital spending significantly, IC Insights noted. In 2010, TSMC doubled its capital spending compared to 2009, while Samsung tripled its semiconductor capex spending, IC Insights said. In 2011, Intel doubled its capex compared to 2010, IC Insights said.
Collectively, the planned capex spending of Intel, Samsung and TSMC is forecast to be $30.7 billion in 2012, nearly 3 times as much as the group spent in downturn-plagued year of 2009, IC Insights said.
Samsung said it would spend about $6.5 billion in capital expenditures to support its logic ICs, more than it is planning to spend on memory capex—$5.7 billion—for the first time. IC Insights noted that Samsung currently does lucrative business as the foundry for Apple Inc.'s A4 and A5 applications processors. While reports have been circulating that Apple is looking to transfer all or some of this business to TSMC, IC Insights noted that Samsung does not want to lose it.
"Samsung is demonstrating that it has the means to provide all the process and manufacturing muscle needed when Apple considers a foundry partner to build its next-generation processors," IC Insights said in the report.
Besides serving as a foundry partner for Apple, Samsung is aggressively ramping its in-house application processor business as demand increases for its smartphones, tablet PCs, and other mobile/media related devices, IC insights said.
Intel's planned capex of between $12.1 billion and $12.9 billion is a marked increase from 2011 capex of about $10.8 billion. But put in the context of Intel's growth—the company's $54 billion in 2011 sales were up 24 percent from 2010—the increase in spending is justified, IC Insights said. The market research firm noted that Intel was nearing completion of three fabs—in Chandler, Arizona, Hillsboro, Oregon and Ireland—and would soon be equipping them and ramping production. Several of Intel's existing fabs will also begin production of 22-nm processors in the second half of 2012, IC Insights said.
IC Insights also noted that Intel is making a concerted effort to expand its processor presence in the market for smartphones and media devices. The company’s Ultrabook initiative has piqued consumer interest and is likely to create additional demand for the company’s processors in the second half of 2012, IC Insights said.
Automotive MCU benchmark takes energy efficiency into account
May 21, 2013
Today, cars are crammed with microprocessors, and many of them are not completely switched off when the driver parks and ...
EnSilica partners Cross Border Technologies to boost sales growth in key European markets
Industry's first ultra-wideband Doherty amplifiers support broadband operation
Graphics chip recognizes nearby pedestrians and bicycles
EMS boom for medical industry says analyst
Gemalto teams with Encore Networks for mission critical M2M communications as US shifts to wireless
May 21, 2013
European smartcard specialist Gemalto has teamed up with US machine-to-machine (M2M) router supplier Encore Networks to provide ...
Solar industry capital spending hits seven-year low in 2013 but upturn is on the cards
Apple's overseas tax evasion stirs debate over US tax code
Could Intel enable USD200 Ultrabook?
InterviewWireless control drives Atmel in Europe
Atmel's recent acquisition of Osmo Devices with a WiFi Direct design center in Cambridge and some key microcontroller launches has seen the company focus heavily on wireless control in Europe says Jörg ...
Filter WizardCheck out the Filter Wizard Series of articles by Filter Guru Kendall Castor-Perry which provide invaluable practical Analog Design guidelines.
Linear video channel
READER OFFERRead more
The development platform for i.MX 6Quad from element14 (built to the Freescale SABRE Lite design) is an evaluation platform featuring the powerful i.MX 6Q, a multimedia application processor with Quad ARM Cortex-A9 cores at 1.2 GHz from Freescale Semiconductor.
This month, Freescale and element14 are giving away five such platforms, worth £128.06 each, for EETimes Europe's readers to win. The platform helps evaluate the rich set of peripherals and includes a 10/100/Gb Ethernet port, SATA-II, HDMI v1.4, LVDS, parallel RGB interface, touch screen interface, analog headphone/microphone, micro TF and SD card interface, USB, serial port, JTAG, camera interface, and input keys for Android.
And the winners are...
In our previous reader offer, Pico Technology was giving away one of its recently launched PicoScope 3207B, a 2-channel USB 3.0 oscilloscope worth 1451 Euros. Lucky winner Mr L. Sanchez-Gonzalez from Spain should be receiving his PicoScope 3207B soon. Let's wish them some interesting findings with his projects.
December 15, 2011 | Texas instruments | 222901974
Unique Ser/Des technology supports encrypted video and audio content with full duplex bi-directional control channel over a single wire interface.