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Qualcomm eyes semiconductor battle

Qualcomm is looking to accelerate the semiconductor battle. Ranked third in Gartner’s list of top semiconductor vendors (by revenue), Qualcomm is aiming even higher. “We grew while Intel and Samsung fell,” said Rafael Steinhauser, senior vice president and Latin American president for Qualcomm during a press meeting in São Paulo last week.

Indeed, according to Gartner, Intel has a 16.6% market share with estimated 2012 revenues of U.S.$49.295 million, down 2.7% compared with the U.S.$50.669 million from 2011. Samsung Electronics follows with an 8.4% market share. Samsung’s U.S.$24.974 million in estimated revenue for 2012 is down 8.7% from its 2011 revenues of U.S.$27.366 million.

On the other hand, Qualcomm grew 29.6% in 2012 compared to 2011, ranking third—moving up from its sixth place ranking in 2011.

Qualcomm is betting on its Snapdragon processor and has high hopes for a rise in smartphone adoption, mostly in emerging markets. “In those areas mobile broadband is vital, and there is a prospective 25% growth of 3G and LTE in emerging markets because in areas such as Latin America there’s been a lack of 3G adoption,” Steinhauser said.

However, it won’t be easy for Qualcomm. Intel’s revenue decrease was mostly due to declining PC sales, and Intel has already announced that  it will embrace the mobile devices segment—representing some tough competition.

In addition, last week Samsung announced that it is moving forward with plans to invest $3.9 billion in the Texas chip foundry that makes processors for the iPhone, despite reports that it may be losing Apple’s business in the near future. The Texas government has given the Korean electronics giant the green light to move forward with its expansion, meaning that production at the upgraded Austin facility could start as soon as the second half of 2013.

Samsung supplies chips for its own smartphones and Apple devices as well as for a number of Chinese smartphone makers. The company also manufactures some of the chips designed by Qualcomm, which designs semiconductors but does not manufacture them.

Worldwide semiconductor revenue has totaled U.S.$298 billion in 2012, a 3% decline from 2011 revenues of U.S.$307 billion, according to preliminary results by Gartner, Inc. The industry was expected to show little growth in the early part of 2012, although order rates were expected to creep up in the second half, paving the way for a recovery phase in 2013.

However, the expected renewal has not occurred this year. Third quarter order rates were below seasonal expectations, and further declines are forecasted for the fourth quarter of 2012.

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Roberta Prescott
Editor, Roberta Prescott is responsible for Latin America reporting news and analysis, interviewing key stakeholders. Roberta has worked as an IT and telecommunication journalist since March 2005, when she started as a reporter with InformationWeek Brasil magazine and its website IT Web. In July 2006, Prescott was promoted to be the editor-in-chief, and, beyond the magazine and website, was in charge for all ICT products, such as IT events and CIO awards. In mid-2010, she was promoted to the position of executive editor, with responsibility for all the editorial products and content of IT Mídia. Prescott has worked as a journalist since 1998 and has three journalism prizes. In 2009, she won, along with InformationWeek Brasil team, the press prize 11th Prêmio Imprensa Embratel. In 2008, she won the 7th Unisys Journalism Prize and in 2006 was the editor-in-chief when InformationWeek Brasil won the 20th media award Prêmio Veículos de Comunicação. She graduated in Journalism by the Pontifícia Universidade Católica de Campinas, has done specialization in journalism at the Universidad de Navarra (Spain, 2003) and Master in Journalism at IICS – Universidad de Navarra (Brazil, 2010) and MBA – Executive Education at the Getulio Vargas Foundation.

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