Intel's Total Market Share Loss May Not Matter (INTC, QCOM, AAPL, ARMH, AMD, TXN)

Intel Corporation (NASDAQ: INTC) seems to be losing some of its edge when it comes to its share of the global semiconductor business.  Gartner Group gave a forecast of total company revenues as a share of the total global semiconductor sales.  Industry-wide sales are expected to be up about 32% to about $300 billion, but Intel’s total market share is being put at 13.8% in 2010 versus about 14.2% in 2009.  There is potentially much more to this than meets the eye.

Intel has gained traction and had record results in a couple of quarters this year.  We recently noted that a mobile chip war is only in the beginning stages with QUALCOMM Incorporated (NASDAQ: QCOM).

A small event, at least so far, that could serious ramifications ahead is that Apple Inc. (NASDAQ: AAPL) has moved into its own processor architecture.  ARM Holdings plc (NASDAQ: ARMH) has also grown strongly in 2010 and it may be one of the wild cards in 2011 and beyond.  Intel committed to keeping its Infineon unit relationships as they were, and we will wait to see if that remains or is changed ahead.

Advanced Micro Devices Inc. (NYSE: AMD) was not the culprit.  Some of the issue is the new growth markets where Intel is only just re-entering.  One player that was cited was Samsung with some 60% growth as the number-two player with global market share of roughly 9.4%, followed closely by Toshiba and Texas Instruments Inc. (NYSE: TXN).

This global market share loss by Intel may not be quite as bad as it sounds.  Thomson Reuters sees growth of almost 24% to $43.54 billion in 2010 revenues followed by revenue growth of nearly 4% in 2011 to $45.16 billion.  The real question is 2011 and beyond as 2010 is all but in the bag now.

Intel has also been making acquisitions as it is in deals to acquire McAfee and the Infineon mobile unit.  Perhaps the biggest wild card ahead is how much those embedded systems sales can grow at Intel out of that Wind River acquisition from 2009.  That takes Intel farther outside of the PC and inside consumer electronics, autos, energy systems, equipment and more non-PC systems.

As a matter of reference, Intel’s CEO Paul Otellini today has said that Intel has resumed its share buybacks.  He was presenting the Sandy Ridge and discussed the tablet PC market opportunity today with a promise of hitting after that smartphone market in the second half of 2011.

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JON C. OGG