The top 10 semiconductor R&D investment companies are released-EEWORLD

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According to the latest edition of the McClean Report published by IC Insights in 2021, R&D spending by global semiconductor companies is expected to grow 5% in 2020 to a record high of $68.4 billion. By 2021, R&D spending will increase by 4% to $71.4 billion, a new high. According to their outlook for the integrated circuit industry, total R&D spending by semiconductor companies is expected to grow at a compound annual growth rate (CAGR) of 5.8% between 2021 and 2025, and R&D spending for the entire industry will reach $89.3 billion by then.

In 2020, the world was hit by the Covid-19 health crisis, and despite the economic impact of the deadly pandemic, the semiconductor industry's total revenue grew an astonishing 8% during the year, but cautious semiconductor suppliers limited the growth of R&D spending.

Statistics show that semiconductor R&D spending as a percentage of global industry sales fell from 14.6% in 2019 to 14.2% in 2020, while R&D spending fell 1% and total semiconductor revenue fell 12%. Figure 1 plots semiconductor R&D spending levels and spending-to-sales ratios over the past 20 years and IC Insights’ forecast for 2025.

Total semiconductor R&D spending has fallen sharply in just four years since the late 1970s. There have also been declines during economic slowdowns, such as -1% in 2019 and -10% in 2009 after the industry was hit by a major global recession, with back-to-back declines of -1% in 2002 and -10% in 2001, when the economic downturn coincided with the bursting of the Internet ".com" bubble at the turn of the century.

Following the global recession of 2008-2009, R&D spending recovered strongly in 2010 and 2011, but subsequent spending has slowed over the past decade for a variety of reasons, including continued uncertainty in the global economy and historic volatility in chip industry acquisitions.

Since 2000, total semiconductor R&D spending as a percentage of global sales has exceeded the four-decade historical average of 14.6% in all but five years (2000, 2010, 2017, 2018, and 2020). During these five years, the lower R&D-to-sales ratio had more to do with strength in total revenue growth than weakness in R&D spending by semiconductor suppliers.

Intel continued to lead all other semiconductor suppliers in R&D spending in 2020, accounting for approximately 19% of the industry's total spending. However, cost-cutting, elimination of certain product categories, and efforts to maximize efficiency led to a 4% decrease in Intel's R&D spending in 2020 to $12.9 billion, while the company's spending fell 1% in 2019, when it accounted for 22% of the industry total.

Intel's 2019-2020 R&D spending decline was the company's first consecutive annual decline since 2008 and 2009. The 4% drop in 2020 was Intel's largest R&D decline since the mid-1990s. Second-placed Samsung increased its R&D spending by 19% to $5.6 billion in 2020.

The report shows that the top 10 R&D spenders (Intel, Samsung, Broadcom, Qualcomm, Nvidia, TSMC, MediaTek, Micron, SK Hynix and AMD) increased their R&D spending by 11% in total in 2020 to $43.5 billion, accounting for 64% of the industry total. The top ten companies in R&D in 2020 are Nvidia (up one place to fifth), MediaTek (up two places to seventh) and Advanced Micro Devices (up one place to tenth). The new IC Insights report shows that the R&D investment ratio of the top ten R&D/sales was 14.5% in 2020, compared with 15.0% in 2019.

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