SK Hynix to dethrone Intel in sales for first time in third quarter

• Nvidia forecast to maintain its dominant position with estimated quarterly sales of $28.1b, followed by Samsung with $21.7b and SK Hynix with $12.8b.

SK Hynix, a major South Korean chipmaker, is poised to dethrone Intel as the third-largest manufacturer by revenue for the first time in history.

According to market analysts at Omdia, SK hynix is projected to achieve remarkable revenue of $12.8 billion in the third quarter of 2024, surpassing Intel’s anticipated sales figures.

The shift represents a notable milestone, as it marks the first instance since Omdia began its revenue tracking in 2002 that SK hynix has outperformed Intel.

Intel, once a stalwart leader in the semiconductor sector, has faced numerous challenges in recent years. Despite its legacy and significant contributions to the technology industry, the company’s struggles to innovate and keep pace with competitors have led to a decline in its market position.

In contrast, SK hynix has capitalised on the surging demand for advanced technologies, particularly high-bandwidth memory chips, which have become crucial in an era increasingly dominated by artificial intelligence (AI) applications.

The AI boom has generated a robust appetite for high-performance computing resources, driving sales of high-value products. Analysts attribute SK hynix’s success primarily to its strategic positioning within this expanding market, highlighting its ability to respond swiftly to evolving industry demands.

The landscape of the semiconductor market is further illuminated by the performance of leading competitors such as Nvidia and Samsung Electronics. Nvidia, the US-based AI chip giant, is forecasted to maintain its dominant position with estimated quarterly sales of $28.1 billion.

Similarly,Samsung Electronics is expected to secure the second spot with record earnings of $21.7 billion in the same quarter, underscoring the competitive capabilities of South Korean firms in the semiconductor arena.

The market shares for Q3 2024 reflect a distinct hierarchy, with Nvidia, Samsung Electronics, and SK hynix projected to account for 16 per cent, 12.3 per cent, and 7.3 per cent of global chip sales, respectively.

The distribution indicates not only the aggressive growth of SK Hynix but also solidifies the presence of South Korean companies in a market traditionally dominated by American giants.

However, despite Nvidia’s impressive revenue growth of 15 per cent from the previous quarter and an astonishing 122 per cent year-on-year increase for the second quarter, the company faced a dip in share prices after the earnings announcement.

Analysts suggested that this decline was due to market expectations for even greater performance in the future rather than a reflection of Nvidia’s substantial achievements. This nuance highlights the challenges tech companies face in meeting increasingly lofty investor expectations, especially in a sector characterised by rapid innovation and competition.