Samsung Set To Weather Difficult Chip Times Ahead

Microprocessors form the very foundation of modern living, but sales of the more advanced and sophisticated processor chips and System-on-Chips, such as those found in servers, desktop computers, laptops, tablets, smartphones and wearable devices, are slowing down. We are seeing a significant slump in the sales of desktop computers and smartphones sales growth has dropped off too. We have also seen more businesses entering or trying to enter these markets, such as Qualcomm working to produce server chips with Google's support. Whilst the world is still buying and using processors for our smart devices, the manufacturers of these products are having to change how their businesses run to make them more cost conscious and competitive and at the same time, increasing the appeal of chips in today's energy conscious world. We've seen Qualcomm announce it expects a drop in sales by as much as 22%, Intel potentially losing 12,000 jobs and SK Hynix announcing it expects to see a 65% drop in quarterly operating revenue. As products become more and more of a commodity, we are seeing how different businesses are struggling to make their product stand out. Those companies with a competitive edge are likely to experience a slow down but it will be much less severe.

Samsung is one such business. Their semiconductor technology has a number of technological advantages compared with much of the competition. Samsung's DRAM chips as used in smartphones and tablets offer a higher performance and lower power consumption compared with much of the competition. Their 3D NAND technology, used in solid state storage drives, also offers lower power consumption: these are desirable traits for modern manufacturers. Industry experts are expecting Samsung's NAND division to increase profits by close to 70% this year as vendors use Samsung's technology in favour of competitors' products; Samsung is seen to be between one and three years ahead of its competitors when it comes to 3D NAND drives.

When it comes to processor chips, Samsung are pushing ahead with building smaller process size units. The 2015 Samsung Exynos 7420 was one of the first commercially produced System-on-Chips designed for smartphones built to a 14nm process size. This smaller size reduces the power consumption and heat output of a given chip, reduces the size it occupies in the smartphone and increases the number of chips that may be built from one silicon wafer. Samsung are planning to release first generation chips built on a 10nm process size later this year, have second generation 10nm chips in the pipeline as well as a more efficient way to manufacturer 14nm chips. Samsung's semiconductor business has been winning contracts to manufacturer chips for other semiconductor businesses, as well as owning the world's market leader in smartphones, which should be good news for cross selling chip sales.

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David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.
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