Samsung’s Market Value Approaches Intel’s

Posted by: Ihlwan Moon on September 3, 2009

Samsung Electronics surprised the world in 2002 when its market value surpassed that of Sony’s. It marked Samsung’s emergence as a truly important player in the electronics industry and its brand image has since improved consistently. Now the Korean electronics giant, which is the world’s second largest semiconductor maker after Intel, is within reaching distance from the U.S. chipmaker in terms of market capitalization.

Some analysts expect Samsung to surpass Intel in market valuation in a year or so. That’s because Samsung has had a remarkably successful year since the world faced a crisis following the collapse of Lehman Brothers last September. Its market share in the global memory chip industry has risen to about 27% from 21% at the end of last year. Samsung, which is also the world’s largest TV maker and the second largest mobile phone maker, has been widening its gap with Sony in flat TVs and increasing sales in handsets even as the mobile phone industry has been suffering from an unprecedented contraction.

Little wonder Samsung’s market cap has risen to $91.5 billion from $61.8 billion a year ago. Intel’s market value at yesterday’s close was about $110 billion but it was down almost 14% from a year earlier. “It is quite likely Samsung will surpass Intel in market cap within a year, unless there’s a dramatic recovery in PC demand,” says Song Myung Sup, electronics analyst at brokerage HI Investment & Securities, forecasting an operating profit of $10.4 billion for Samsung next year, up from $7.7 billion this year and $4.7 billion last year.

Optimism for Samsung stems largely from its balanced business portfolio. Until several years ago, nearly 60% of Samsung’s profit came from its memory chip business. But next year, when analysts forecast a recovery in semiconductor demand, the memory chip business is expect to account for far below a third of Samsung’s overall profit, with handsets and TVs representing about half of the total profit. The remainder will come from its liquid-crystal panel business.

Reader Comments

dave

September 3, 2009 8:28 AM

Korea has learned from the Japan/US model. Use the Americans for their free military protection, keep your markets closed to foreign competitors, lend the USA money as political leverage, study their consuer driven economy and then sell them stuff.

dave

September 3, 2009 8:28 AM

Korea has learned from the Japan/US model. Use the Americans for their free military protection, keep your markets closed to foreign competitors, lend the USA money as political leverage, study their consuer driven economy and then sell them stuff.

mr dave

September 3, 2009 10:55 AM

Correct! It's time to pull our troops out of Korea, Cuba,japan, Italy, Germany and every other country around the world. You can build cooperation through war games and trust you don't need to waste BILLIONS by having a base in every armpit of the world!!!

Joshua

September 3, 2009 1:56 PM

FREE MILITARY PROTECTION!?! My A$!@#$!!! S Korea pork out $623 Million to US Military each year not to mention lots of purchases of military equipments for Korean Military -- Similar situation in Japan. It has been a great business for US military industry, and frankly part of the reason why US foreign policy has become more and more hard-line in the views of many both domestic and abroad. Get the facts straight Dave!

GloGo

September 3, 2009 2:28 PM

@Dave: What's wrong about it? Plus how big is the Korea market anyway? Wikipedia records it as 48.3 mil with a GDP of 27k per capita. Way lower than that of California with 36.7 mil at 54k per capita.

aj

September 3, 2009 4:38 PM

But, seriously, Japanese and Koreans don't have any fun. They work 14 hours a day, get drunk to forget the work pressure, spend the rest of their free time in Internet porn, Internet chatting and video games. I don't call this a fulfilling life. I don't envy them in any ways.

siphandone

September 3, 2009 7:33 PM

Samsung is good like LCD TV but other products like digital or video camera are sucked...

BK

September 3, 2009 11:12 PM

Dave..unfortunately you are wrong. Joshua is right. The U.S. makes a lots of money from selling military stuffs to S.Korea. Again, the U.S. gov is not stupid.

Corporate

September 4, 2009 12:35 AM

Yeah, let's stop buying their stuff, just be ready to pay double price so instead of paying korean laborers and honest workers you can pay more to American corporate ceo's and board members.

Henry L.

September 4, 2009 7:50 AM

Sampsung got to where they are thru hard work and fierce competition. Dave, you are just jealous. Besides, the US government is not stupid, we are still competitive in Military hardware and thus the US is the largest ARMS DEALER in the world. Ofcoarse we don't publicize that the US get alot of money from the Japanese and Koreans, we like to pretend that we're doing all this for free and bozos like Dave just eat it up.

Henry L.

September 4, 2009 7:50 AM

Sampsung got to where they are thru hard work and fierce competition. Dave, you are just jealous. Besides, the US government is not stupid, we are still competitive in Military hardware and thus the US is the largest ARMS DEALER in the world. Ofcoarse we don't publicize that the US get alot of money from the Japanese and Koreans, we like to pretend that we're doing all this for free and bozos like Dave just eat it up.

smith

September 4, 2009 9:22 AM

@Aj: come on, guy. you don't know the current koreans. They just work 8 hours a day and no work on Weekend. They enjoy balance between work and life.

woojin

September 4, 2009 1:36 PM

the subtle hints of racism displayed here is appalling. go to seoul and see for yourselves what it's like. "armpits"? look no further than the US states between the two coasts.

London

September 5, 2009 7:50 AM

For example, look at Samsung's LED TVs and tell yourself if there's anything even close to them? Korea is one of the most, if not the most, technology innovative counties in the world today. And if you does not agree with that, it's they own loss... sorry Intel...

Howard

September 5, 2009 9:50 PM

I will not be surprised that one day we are all using laptops running on Korean processors and operating systems, running software developed on Korean programming languages, dinning in Korean fast food chains, and sipping Korean soft drinks everyday.
Better be careful and work harder now, those Intels, Microsofts, IBMs, Hewlett-Parcards, Oracles, Googles, Boeings, and General Electics...

RS232

September 6, 2009 3:59 AM

@Dave.That is a brilliant one liner that summed up the whole situation. Cheers.

From Seoul

September 8, 2009 7:49 PM

Hi Dave, I respectfully disagree with
the notion Korea is, through some sort
of planning, taking advantage of U.S.
for military spending. Without what
then Soviet Union and the U.S. have
created, we would not have had to spend
nearly as much on armed forces
anyway. Given choices, any Korean
would have chosen, and still would
choose, sovereignty over U.S. backed
nation with war and pesisting war threats. Just thought I would share my thoughts. Thanks.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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