The 10 largest semiconductor R&D spenders increased their collective expenditures to US$35.9 billion in 2017, an increase of 6% compared to US$34.0 billion in 2016, according to IC Insights.

Intel continued to far exceed all other semiconductor companies with R&D spending that reached US$13.1 billion, said IC Insights. In addition to representing 21.2% of its semiconductor sales last year, Intel's R&D spending accounted for 36% of the top 10 R&D spending and about 22% of total worldwide semiconductor R&D expenditures of US$58.9 billion in 2017.

Intel's R&D expenditures increased just 3% in 2017, below its 8% average annual growth rate since 2001, IC Insights indicated. Still, Intel's R&D spending exceeded the combined R&D spending of the next four companies - Qualcomm, Broadcom, Samsung and Toshiba - listed in IC Insights' ranking.

Underscoring the growing cost of developing new IC technologies, Intel's R&D-to-sales ratio has climbed significantly over the past 20 years, IC Insights noted. In 2017, Intel's R&D spending as a percentage of sales was 21.2%, down from an all-time high of 24.0% in 2015. In 2010, the ratio was 16.4%, 14.5% in 2005, 16.0% in 2000, and just 9.3% in 1995.

Qualcomm - the industry's largest fabless IC supplier - was again ranked as second-largest R&D spender, a position it first achieved in 2012, IC Insights said. Qualcomm's semiconductor-related R&D spending was down 4% in 2017, after a 7% drop in 2016, and it was close to being passed up by third place Broadcom and fourth placed Samsung, whose R&D spending increased 4% and 19%, respectively.

Despite increasing its R&D expenditures by 19% in 2017, Samsung had the lowest investment-intensity level among the top-10 R&D spenders with research and development funding at 5.2% of sales last year, IC Insights said. Samsung's 49% increase in semiconductor revenues in 2017 (driven by strong growth in DRAM and NAND flash memory) lowered its R&D/sales ratio from 6.5% in 2016.

Micron Technology's revenues surged 77% in 2017, but its research and development expenditures grew 8%, resulting in an R&D/sales ratio of 7.5% compared to 12.5% in 2016, IC Insights indicated. Similarly, SK Hynix's sales climbed 79% in 2017, while its research and development spending increased 14% in the year, which resulted in an R&D/sales ratio of 6.5% versus 10.2% in 2016.

Fifth-ranked Toshiba and sixth-ranked Taiwan Semiconductor Manufacturing Company (TSMC) each allocated about the same amount for R&D spending in 2017, IC Insights said. Toshiba's R&D spending was down 7% while TSMC had one of the largest increases in R&D spending among the top 10 companies shown in the figure. TSMC's R&D expenditures grew by 20% as the foundry raced rivals Samsung and Globalfoundries in launching new process technologies, while its sales rose 9% to US$32.2 billion in the year.

Rounding out the top-10 list were MediaTek, Micron, Nvidia, which moved from 11th place in 2016 to 9th to displace NXP in the 2017 ranking, and SK Hynix, according to IC Insights. Collectively, the top-10 R&D spenders increased their outlays by 6% in 2017, 2pp more than the 4% R&D increase for the entire semiconductor industry. Combined R&D spending by the top 10 exceeded total spending by the rest of the semiconductor companies (US$35.9 billion versus US$23.0 billion) in 2017.

A total of 18 semiconductor suppliers allocated more than more than US$1.0 billion for R&D spending 2017. The other eight manufacturers were NXP, TI, ST, AMD, Renesas, Sony, Analog Devices, and Globalfoundries.

By: DocMemory
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