July 19, 2006 – Worldwide semiconductor companies spend more than $30 billion in 2005 on R&D, 10% more than the previous year, and slighly ahead of the 9% compound annual growth rate over the past five years, according to new data from analyst firm IC Insights Inc., Scottsdale, AZ. Meanwhile, the 30 largest fabless suppliers have pushed their R&D investments at double that rate since 2001.
Intel spent about $22.1 billion on R&D from 2001-2005, accounting for roughly a quarter of the top 25 IDMs during that period (i.e., those that manufacture products and break out their semiconductor financial results), and about $10 billion more than any other semiconductor company. However, as a percentage of sales, Intel’s R&D expenses were lower than the group, at 14% vs. 16% for the top 25 IC manufacturers, and compared with 17% of sales from the top 30 fabless suppliers, the analyst firm noted.
Among other top-25 IDMs, Samsung notably spent $12.0 billion on R&D, a full 20% of its five-year sales, as did Freescale Semiconductor ($5.2 billion). Infineon’s R&D investments amounted to 19% of its sales from 2001-2005 (about $6.3 billion), while Texas Instruments and STMicroelectronics both invested an amount equal to 17% of sales ($9.0 billion and $6.4 billion, respectively).
For the top 30 fabless suppliers, Broadcom led the way with an R&D budget amounting to 28% of sales ($2.4 billion), followed by Marvell (23%, $1.0 billion), Xilinx (19%, $1.3 billion), Qualcomm (15%, $3.1 billion), and Nvidia (14%, $1.3 billion).
IC Insights also noted that silicon foundries have consistently spent less of their sales on R&D over the past five years compared with IDMs and major fabless customers, mainly because they don’t develop their own products. During the 2001-2005 period, foundry leader Taiwan Semiconductor Manufacturing Co. (TSMC) invested a total of $1.8 billion, or 6% of sales, on R&D, while United Microelectronics Corp. (UMC) spent $1.1 billion (9.0% of sales), Chartered Semiconductor Manufacturing Ltd. in Singapore invested $539 million in R&D (14% of sales), and Semiconductor Manufacturing International Corp. (SMIC) in China invested $236 million (9.0% of sales).