Samsung Electronics is set to become the world's largest seller of semiconductors this year. Soaring memory chip demand is allowing it to propel past Intel, which has retained the annual sales crown for 25 years.

The chipmaker has better positioned itself to benefit from two trends -- higher storage capacities in smartphones and a booming data center industry. Intel still depends on revenue from the central processing units that it sells to PC makers.

Samsung Electronics' semiconductor sales between January and September stood at 53.15 trillion won ($49.2 billion), up 46% from the year-earlier period. Intel's sales for the period increased 6%, to $45.7 billion.

Even after taking exchange rate movements into account, Samsung is certain to surpass Intel for 2017.

The South Korean company has an edge in NAND flash and DRAM memory, and its revenue growth is attributable mainly to the increasing price of memory.

It has other advantages, too. Samsung Electronics' plants have a higher non-defective product rate than those of its rivals, thanks to massive amounts of money that the company has poured into its production facilities and into research and development.

As a result, even Apple now bows to Samsung's price-hike demands.

Intel, on the other hand, still relies on CPU sales to PC makers, whose market is plateauing.

Although demand for memory, particularly in the semiconductor market, is expected to continue swelling, prices could drop if industry players ramp up output.

Samsung Electronics could also face future uncertainty. It is already trying to ward that off by expanding its contract chip manufacturing and other businesses. But it so heavily depends on memory chips that weaning itself off the revenue stream remains a long-standing challenge.

By: DocMemory
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