Samsung Electronics falls behind Intel, Nvidia in chip sales in 2023

Samsung Electronics' flag [NEWS1]

Samsung Electronics tumbled down to third in chips sales last year, hampered by the prolonged cyclical downturn in memory chip demand.

The Korean chipmaker logged $44.4 billion in revenue in its chip business last year, according to data from global analyst Omdia, down 33.8 percent from the previous year's $67.1 billion as the memory chip industry experienced a severe supply glut in 2023.

In 2022, the company was at the top of the list.

"Samsung, the industry leader in 2022, slipped to third place in 2023 as their memory revenue declined by nearly half from the 2021 level," said Cliff Leimbach, senior research analyst at Omdia.

American chipmaker Intel soared to the top spot last year by posting revenue of $51.2 billion, 15.8 percent less than the previous year.

AI chip superstar Nvidia climbed up to the second spot by recording $49.2 billion in chip revenue last year, a whopping 133.6 percent increase from the previous year.

"In 2023, despite the overall downturn in the semiconductor industry, AI emerged as a significant growth driver in the industry with companies focused on this segment reaping its benefit," the market tracker said in the report.

"Nvidia has been the clear winner in this space, more than doubling its semiconductor revenue from 2022 to $49 billion in 2023."

Another Korean chipmaker, SK hynix, a leader in high bandwidth memory (HBM) chips, was spotted in sixth with its 2023 annual revenue coming in at $23.7 billion. A year prior, it ranked fourth.

The cyclical downturn has bottomed out and a recovery is ensuing.

Samsung Electronics' chip division is expected to return to the black in the first quarter of this year with profit ranging from 200 billion won ($149 million) to 700 billion won, according to analysts. SK hynix turned to profit in the fourth quarter of 2023 thanks to its leadership in HBM.

The preliminary earnings of Samsung Electronics will be announced on April 5.

Omdia said last year's chip industry generated revenue of $544.8 billion, down 9 percent from the previous year's $597.7 billion.

The market tracker's latest data doesn't include the contract manufacturing business, which is why Taiwan's TSMC is excluded from the rank.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]