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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.

author: Barbara Jorgensen

Barbara Jorgensen

Barb Jorgensen is the editor-in-chief of EPSNews in the supply chain and has covered the electronics manufacturing, supply and business for more than 25 years. Barb spent most of his career with Electronic Business magazine and EBN; freelance; and then founded the online edition of EPSNews with two industry veterans, Bolagie Ojo and Gina Roos. EPSNews was acquired by AspenCore in 2017.


Chip Makers Continue R&D Spending Streak

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