After record high investment in 2021, chip companies will increase their R&D spending by 9 percent this year to $ 80.5 billion, according to IC Insights. A record high of $ 71.4 billion was spent in 2021, up 13% from the previous year.
Semiconductor companies also give billions of dollars to factories. Intel alone plans to spend up to $ 100 billion on factories in the United States and another $ 100 billion in Europe. Both regions are stimulating production and development in the semiconductor supply chain as unprecedented chip shortages continue.
When the world was hit by Covid-19 in 2020, prudent semiconductor suppliers kept their R&D spending cap on despite market growth of 11% that year, the research firm said. Semiconductor R&D spending as a percentage of global industry sales fell to a ratio of 13.1% in 2021 compared to 14.5% in 2020 and 15.1% in 2019 when spending for research and development fell by 1% and total chip market revenue fell by 12%.
The total R&D spending of semiconductor companies is expected to increase at a compound annual growth rate (CAGR) of 5.5 percent between 2022 and 2026 to $ 108.6 billion.
IC Insights notes that total semiconductor R&D spending has fallen in just four years since the 1980s: -1 per cent in 2019 during an economic downturn; -10 percent in 2009, after the industry was hit by a major global recession following the collapse of the financial market; and successive declines of -10% in 2001 and -1% in 2002, when the economic downturn coincided with the end of the dot.com bubble.
Following the global recession of 2008-2009, spending on semiconductor R&D has recovered sharply for several years, but then has slowed over the rest of the last decade for a variety of reasons, including continuing economic uncertainty and a historic wave of acquisitions. chip industry.
Since 2000, IC Insights reports, total semiconductor R&D spending as a percentage of global sales has exceeded the historical average for four decades of 14.5% for all but five years (2000, 2010, 2017, 2018 and 2020). During these five years, the lower R&D-to-sales ratios were more related to the strength of overall revenue growth than to the weakness in R&D spending by semiconductor suppliers.
Intel is ahead of all other chipmakers in R&D spending in 2021, accounting for about 19% of the total industry. Intel has increased its research and development spending by 12 percent in 2021 to a record $ 15.2 billion as part of its efforts to regain its leading position in launching new generations of IC processing technologies and to position itself as a major supplier of modern waffle casting services. In 2020, Intel’s R&D spending rose by just 1% after falling 1% in 2019.
Samsung ranked second in IC Insights’ R&D rankings for 2021 with spending rising 13 percent to approximately $ 6.5 billion after a 23 percent increase in 2020. South Korean memory giant speeds up spending its R&D for leading logic processes (5 nm and below) to increase competition with foundry market leader Taiwan Semiconductor Manufacturing Co., which increased its R&D spending by 20 percent in 2021 to about $ 4.5 billion after a 26 percent increase in 2020.
IC Insights’ R&D ranking for 2021 shows that 21 semiconductor suppliers spent $ 1 billion or more on R&D against 19 companies in 2020. The top 10 in the R&D ranking collectively increased spending 18 percent to $ 52.6 billion, about 65 percent of the total R&D industry last year. The R&D / sales ratio of the top 10 is 13.5% in 2021 compared to 14.5% in 2020.