Samsung ousted Intel to reclaim its spot as the No. 1 chipmaker in Gartner's latest semiconductor market report. The swap came amid a surge in semiconductor revenues, which grew 26% in 2021 to $595 billion.

Rising material costs resulting from persistent supply chain shortages — including those resulting from the Russian invasion of Ukraine — coupled with growing demand for 5G modems and DRAM memory contributed to record revenues during fiscal year 2021, according to Andrew Norwood, research VP at Gartner.

Samsung saw some of the strongest revenue growth in 2021, up 28% compared to Intel, which saw its revenues decline 0.3% during the same period. The companies' market share is now separated by 0.1 percentage point at 12.3% and 12.2% respectively, according to Gartner.

However, within the top 10 chipmakers, it was AMD and Mediatek that ran away with the show. The two companies posted the strongest year-over-year gains, with revenues surging 68.6% and 60.2% respectively.

SK Hynix — which acquired Intel’s memory business in 2020 — and Micron Technology also saw robust gains, up 40.6% and 31.4% respectively, from the prior year on the strength of DRAM shipments. 2021 saw the ramp of DDR5 memory modules in the consumer space, with the first compatible servers from AMD and Intel expected to reach the market later this year.

HiSilicon, meanwhile, suffered the greatest defeat of the year with revenues sliding 81%. “This was a direct result of the U.S. sanctions against the company and its parent company Huawei,” Norwood wrote.

However, other Chinese chipmakers fared better. As a whole, the Chinese semiconductor market declined from a 6.7% share in 2020 to 6.5% in 2021, Norwood added.

In addition to leading the semiconductor market, Intel and Samsung have invested heavily in their foundry business to meet growing demand for semiconductors. Samsung Electronics and Intel are two of the largest foundry operators, with Taiwan Semiconductor Manufacturing Co. (TSMC) holding the No. 1 spot.

To date, Intel has announced north of $80 billion in foundry projects since CEO Pat Gelsinger established Intel Foundry Services early last year.

Intel kicked things off with a $20 billion expansion to its Arizona campus in March. The project was followed by a $3.5 billion retrofit of its New Mexico campus and a $20 billion Ohio “mega fab” in January. In March, Intel made good on its promise of a European expansion, announcing $36.1 billion in new spending in the region, including an $18.6 billion site in Germany and a $13.2 billion expansion of its Ireland facility.

However, the scope of these projects is dependent in some capacity to government subsidies under the U.S. and EU chips bills, which have yet to pass.

Samsung Electronics, meanwhile, announced $205 billion in capex spending to bolster its semiconductor and biotech businesses. That investment will go toward expanding its electronics and biologics businesses as the company looks to increase its involvement in COVID-19 vaccine production and expand semiconductor production to better compete with rivals TSMC and Intel.

Approximately $146 billion of the funding will go toward developing advanced process technology and expanding Samsung’s foundry business to new applications in artificial intelligence (AI) and data center.

The spending could soon see Intel, Samsung, and TSMC competing for a big chunk of the U.S. Chips for America Act, which is expected to return to the House for a final vote later this month.

Samsung, in November, unveiled a $17 billion foundry project in Texas. Meanwhile, the company’s largest foundry competitor TSMC – which produces the lion’s share of chips for fabless chipmakers like AMD, Apple, Nvidia, and Qualcomm — began construction of a $12 billion fab in Arizona back in June. The project is part of a $100 billion global foundry expansion.