Intel and Samsung are on a collision course

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 During this year’s Super Bowl, the ad making the biggest statement was well beyond the walls of Levi’s Stadium. Throughout the big game, attendees and some eagle-eyed TV viewers could see pitches for Samsung’s memory chips and processors—not within the stadium, but on a giant display almost 2 miles away. Samsung turned the top two floors of its new Santa Clara chipmaking headquarters into a makeshift digital billboard measuring 30 feet by 300 feet. Along with the Denver Broncos and Carolina Panthers, one other important group could see its ads: anybody an additional mile beyond the Super Bowl, at the headquarters of Intel.

For 40 years, Samsung’s semiconductor operation has been looking up at Intel’s. These days, though, it’s more of a sidelong glance. Intel remains the world’s No. 1 chipmaker, and in some ways is stronger than ever, supplying processors for 99 percent of the world’s servers and 95 percent of laptops. But Samsung has solidly established itself as No. 2 in the past few years by taking control of the faster-growing memory chip business. (Intel more or less abandoned that line in 1985.) For the first time, the two companies are beginning to seriously eye each other’s customers.

Late last year, Intel said it would spend as much as $5.5 billion to jump back into production of modern memory chips at a plant in the Chinese city of Dalian. “This is probably one of the first memory investments we’ve made in our Intel factories in quite a few years,” Chief Executive Officer Brian Krzanich said on a November call with investors. In an interview, Kelvin Low, Samsung’s senior director of foundry marketing, says his company is gearing up to produce two big sets of server chips using “the most advanced techniques”—meaning they’re intended to compete with Intel’s. “We are proactively entering that space,” he says. “The reasons are obvious.” Samsung declined to comment specifically on competition with Intel, which declined to comment for this story.

Ian King and Jungah Lee

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