Surging Semiconductor Prices Help Chip Makers Weather Missteps

The rapid proliferation of mobile technology and internet-connected devices is boosting the bottom lines of some of the world's most prominent tech companies.

The Wall Street Journal reported last week than an "unprecedented semiconductor boom" led to sharply increased prices for chips — and higher earnings and stock prices for the handful of producers that make them.

Intel, which primarily makes larger computer chips known as logic chips, saw $55 billion in revenue last year despite missteps in the wireless market.

And Samsung — which leads the memory chip segment — saw its stock price surge in recent months despite high-profile safety problems with its Galaxy Note 7 smartphones.

Those two companies, along with Qualcomm and Toshiba, tend to dominate the semiconductor market, which became highly consolidated in past years and remains tough to navigate for aspiring competitors due to its high costs.

The paper, citing data from DRAMeXchangem, noted that prices for the two main types of memory chips — known as NAND and DRAM — jumped by 27 percent and 80 percent between July and March, respectively.

An analysis from IHS Markit, meanwhile, noted that the global chip market roughly doubled in revenue between 2003 and last year, when chip makers took in some $352 billion.

Although prices are expected to moderate somewhat later this year, analysts noted that the overall pattern isn't likely to change — the number of internet-connected devices is projected to jump from more than 8 billion this year to some 20 billion by 2020.