Global chip R&D spending on the climb

LONDON – Spending on research and development by semiconductor companies worldwide is expected to grow 10 percent in 2012 to a record high of $53.4 billion, according to market analysis firm IC Insights (Scottsdale, Ariz.).

IC Insights predicts that worldwide semconductor sales will increase 3 percent in 2012 to an annual total of $329.8 billion, up from $321.4 billion in 2011. This will put R&D spending at 16.2 percent of the total revenue.

A dozen semiconductor companies spent more than $1.0 billion each on R&D in 2011. Intel was the leader with $8.35 billion of R&D spending in 2011, approximately three times the spending of Samsung Electronics Co. Ltd.




Click on image to enlarge.
Worldwide semiconductor spending leaders in 2011 with spending above $1 billion. Source: IC Insights

U.S. companies accounted for 57 percent of worldwide semiconductor R&D spending in 2011, followed by suppliers based in Japan at 17 percent; Europe, 10 percent; Taiwan, 8 percent; South Korea, 7 percent; and mainland China, 1 percent. Inegrated Device Manufacturers (IDMs) accounted for about 66 percent of R&D spending by semiconductor companies in 2011, while fabless suppliers represented 29 percent and pure-play foundries made up the remaining 5 percent of the total.

Semiconductor R&D spending – as distinct from capital spending – has been moving higher for three decades as the complexity of chip manufacturing and design has increased with miniaturization.

R&D spending as a percent of semiconductor sales by chip companies was typically 7 to 8 percent in the late 1970s and early 1980s. R&D-to-sales ratios grew to around 10 to 12 percent of revenues by the early 1990s and then jumped to over 15 percent during the last decade, reaching a record 17.5% in 2008, according to IC Insights.


Related links and articles:

Analyst: Only six chip firms to expand capex in 2012

Semi market growth seen as doubling

Sony to spend $1-billion on CMOS sensor production

TSMC raises capex to record $8.5 billion, pulls in 20-nm