Korea’s semiconductors thrive in first quarter

Korea’s leading chipmakers had sterling performances in the first quarter, backed by favorable market conditions and increased production capacity.

Samsung Electronics narrowed the gap with Intel, the perennial No. 1 chip manufacturer, according to a report released Thursday by IC Insights, a U.S.-based market research firm specializing in the semiconductor industry.

Samsung’s sales in the first quarter increased by 6 percent year-on-year to $9.34 billion while Intel’s remained flat at $11.6 billion. The Korean electronic company cited rising demand for DRAM and NAND flash memory chips used in smartphones as a primary factor driving strong sales in the first three months.

SK Hynix, the country’s second-largest chip maker, continued its ascent as it overtook U.S. manufacturer Micron to secure the No. 5 spot globally. With a 25 sales increase over a year ago, it is now a runner-up to Qualcomm.

Plagued with overheating issues for its Snapdragon 810, Qualcomm saw a 5 percent sales increase.

The rise of SK Hynix reduced the sales gap between the two companies, with Hynix registering $4.38 billion in revenues and Qualcomm $4.43 billion.

IC Insights predicted that SK Hynix could displace Qualcomm when the full-year sales totals are tallied.

The strong performance is primarily attributed to the great reception of Apple’s iPhone 6 models, which used chips from Hynix, offsetting a decline in semiconductor prices and seasonal weaknesses.

Samsung Electronics and SK Hynix boosted their global semiconductor market shares.

Market research company IHS Technology said earlier this month that Intel had the largest market share of 13.3 percent, while Samsung posted 11.2 percent, a 0.5 percentage point increase compared to last year.

Qualcomm had the third-largest market share with 5.2 percent. SK Hynix is closing in on the California-based company with 5.1 percent. The figure is 0.6 percent up compared with the same period last year, making SK Hynix one of few companies achieving gains in market share.

The strong performance of the two companies is also attributable to favorable market conditions in the chip industry, which in turn contributed to growing total revenues of chipmakers around the world.

The Semiconductor Industry Association (SIA) announced that worldwide sales of semiconductors reached $83.1 billion during the first quarter of 2015, an increase of 6 percent compared to the first quarter of 2014.

SK Hynix vowed to maintain the momentum by expanding production of 20-nanometer DRAMs in the second quarter, according to a statement released by the company.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]