Intel declares rivalry with Qualcomm

Lee Hee-sung Intel Korea CEO

By Kim Yoo-chul

The head of Intel’s Korean unit has underestimated its biggest rival Qualcomm’s chip-making technology by insisting that Intel is ahead of it in terms of technology and market response.

The country manager Lee Hee-sung stressed that it’s becoming aggressive in persuading major Korean handset vendors, such as Samsung Electronics, LG Electronics and Pantech, to introduce mobile devices using Intel processors.

It’s uncommon for the U.S.-based semiconductor giant to talk about its rivals. Lee, who is one of the longest-serving CEOs of a foreign firm in Korea, is known to be a very outspoken person.

It remains uncertain whether Intel can steal as much stakes as it wants from Qualcomm as the California-headquartered Intel is truly late in the market for processors.

But Lee doesn’t care about its lateness.

“Intel is a semiconductor company that has dual strengths in development and manufacturing. Our fourth-generation Haswell-branded System-on-Chip (SoC) has advantages in power consumption. This is the best example that shows Intel’s merits,” Lee recently told reporters in Seoul.

The executive said he always discusses with those Korean tech companies for the wider usage of the Intel chips. He is indifferent about the fact that Intel’s future is dependent upon the Samsung Galaxy Tab 3.

Samsung has recently marketed the Tab 3 using Intel processors, a move seen by many analysts and officials as one of the remarkable achievements struck by Intel to better power its processor business.

The Tab 3 will be available in the United States via top mobile carriers. As Samsung is investing heavily to increase its stakes in the U.S. tablet market, the two firms are expected to launch aggressive promotional campaigns.

The success of the new Intel processor is more than significant for the American company, which is facing uncertain market conditions due to a decline in conventional PC sales, to strengthen its presence in the growing tablet market.

A leading market research firm IHS iSuppli revealed that Intel grabbed a negligible 5 percent share of the market for digital baseband and applications processors used in smartphones and other connected mobile devices last year.

Specifically, sales of netbooks, a product Intel still dominated with its Atom family of low-end and unprofitable processors, have been badly impacted by the downturn in the PC market as well as the growth in the media tablet, said Samsung officials.

Intel faces a growing challenge from Qualcomm, which holds a market share in the mobile phone semiconductor business, seven times larger than Intel’s.

Driven by such confidence, Lee hinted of twisting Samsung’s supply chain management structure that has so far been powered by Qualcomm.

“Our new CEO Brian Krzanich is inspecting Intel’s global offices with the board chairman Renee James. Because meeting with our clients is important, James had a meeting with Samsung’s co-CEO Shin Jong-kyun in Seoul, last week,” Lee said.

He continued; “The meeting with Samsung signifies that Intel recognizes the Korean company as one of its crucial business partners.” Samsung sources said the issue of how to supply Intel chips to upcoming Samsung devices was on the table.

A Samsung spokesman declined to confirm the meeting, itself.

Qualcomm spokesman S.S. Kim also refused comments, although industry watchers and officials claim that the meeting was upsetting Qualcomm.

Samsung is using its Exynos-branded processors in the Galaxy line of devices, while Qualcomm has been providing its Snapdragon processors to the world’s biggest smartphone manufacturer.