Samsung’s cash is no longer coming mainly from its popular mobile phones. In fact, in 2021, it became the largest chipmaker in the world, beating Intel for the first time in more than two decades. Keep reading to find out what you may expect this year from the two companies and whether Samsung is likely to shift its attention to chips rather than the beloved gadgets.
Losing Ground
Samsung has a broad range of products, and this variety is likely helping it stay on top of competitors. Intel’s been struggling severely with product delays while Samsung enjoyed steady demand for its numerous products.
As people were stuck in their homes during the pandemic lockdowns, they have turned their attention to high-performing gadgets. For instance, according to promocodius.com experts, a promo codes website, tech lovers can now save as much as 30% on their favorite gadgets. There are many online stores that allow the use of these free promo codes, such as Eldorado in Ukraine.
With strong demand for affordable, high-end tech products, it is not surprising that Intel is quickly losing ground. Diversified companies like Samsung, Lenovo, and Microsoft have switched from waiting for Intel to meet their chip demand to making their own or finding new chipmakers with more competitive pricing policies.
The Chip Shortage in 2021
One of the main causes of the chip shortage in 2021 is the increased demand for tech products. As people were in lockdown around the world, the demand for laptops, notebooks, tablets, and gaming consoles has increased massively. Also, cryptocurrency mining and the extreme weather event that closed the chipmaking plant in Texas further contributed to the shortage.
The global chip shortage that debuted in 2020 due to the pandemic did not only impact the smartphone-making business but up to 169 sectors – including electric cars and crypto mining. In 2021, many events like extreme weather conditions and the tensions between China and the U.S. pushed the sales of semiconductors (which use chips) higher by 13% in January 2021 compared to the previous year. This made tech companies like Samsung and Apple struggle to keep up with production plans.
What Comes Next?
Samsung is quickly rising as the world’s top chipmaker by revenue. It has many memory chips and other components that are much cheaper than Intel’s offering. Although Intel promised to recover the lost ground by 2025, it is unlikely unless the company invests massively to stay competitive.
For many years, Intel was the main chipmaker in the world – not only by revenue but also due to its most advanced technology. It now seems that Intel struggles to keep up with the fast-changing environment in the technology industry. For instance, the Alder Lake CPU has lots of high-end features, but the technology is still considerably lacking compared to Samsung.
For 2025, Intel has solid plans to catch up with Samsung. The company aims to invest $44 billion to make new chipmaking plants across the United States, Israel, and Europe. Increasing the manufacturing ability seems to be key to keeping up with the demand. However, the chip crisis in 2021 meant that a few manufacturers, like TSMC, for instance, were able to increase chip prices significantly. In turn, this business started to become more attractive for many new companies.
Samsung estimates that the global chip shortage will keep going until the second half of 2022. Unfortunately, the company has already been negatively impacted by this crisis. Samsung fans perhaps know that the Galaxy S21 has already been delayed, which further pushed Galaxy S22 down the line.
Amid the crisis, the company is taking important steps to mitigate all the risks. For instance, instead of keeping a stock of two weeks’ worth of chip supplies, it expanded to four weeks to avoid delays. Also, it focuses on closing annual contracts to ensure the chip production capacity.
Summary
All in all, Intel is quite unlikely to get back on track in 2022. Due to the chip crisis, more and more tech companies started to invest in producing their own chips rather than relying on Intel’s technology. As a consequence, Samsung managed to earn more revenues via its chipmaking business than Intel, and it is planning to keep expanding its production abilities this year and rebalance the semiconductor industry.
