Such changes in the business structure will have a considerable effect on the industry. As Intel’s core businesses will significantly overlap with that of Samsung Electronics.

Intel, which currently carries out a large-scale restructuring and reforms the business structure, plans to strengthen the next-generation business sectors like data center, memory semiconductor and the Internet of Things (IoT).

According to major media reports on May 10, Intel CEO Brian Krzanich recently announced the company’s business direction via its official website. He said that Intel will reduce the PC sector, which used to be its major business, and withdraw from the mobile chip sector, which show no significant results. In a bid to reduce costs, the company will also cut 12,000 jobs. Industry sources expect that Intel will be able to achieve the effect equivalent to trimming US$900 million (1.05 trillion won) of fixed costs with the workforce reduction.

Krzanich said, “Intel will focus on the cloud, IoT, memory, programmable solution, 5G and Moore's law sectors in the future.”

Such changes in the business structure will have a considerable effect on the industry. As Intel’s core businesses will significantly overlap with those of Samsung Electronics, which ranks No. 2 in the global semiconductor market in terms of sales, the competition will heat up as well.

Intel’s 3D cross point memory chip, which was unveiled last year and will begin mass production this year, is highly likely to directly affect the global server DRAM and NAND flash markets, which are led by Samsung Electronics. Intel also plans to supply its self-developed solid-state drive (SSD) for servers to major clients in the second half of this year.

In the IoT sector, Intel will also directly compete with Samsung Electronics’ ARTIK IoT modules. The company is preparing for various IoT module businesses, such as Curie and Edison. Intel showed a 22 percent growth in the IoT sector last year. Although it accounts for less than five percent in the total revenue, the ratio will gradually increase.

In the mobile modem chip sector in which the company has a similar potential in the mobile application processor market, Intel’s products are also likely to compete with Samsung Electronics’ Exynos series.

An official from the semiconductor industry said, “Unlike the past when focusing on processor solutions rather than chip production, Intel will make large investments in the manufacturing technology sector in the future. Accordingly, the company is on a collision course with Samsung over many different sectors including productivity and standards.”

By: DocMemory
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