Date:25/01/21
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Experts from the analytical company IC Insights studied the situation with the costs of research and development (R&D) in the semiconductor industry. According to their calculations, the crisis caused by the pandemic forced manufacturers to reduce the share of income allocated to R&D, but in absolute terms, these costs were at a record high.
More specifically, R&D spending accounted for 14.2% of sales in 2020, up from 14.6% in 2019. Meanwhile, total semiconductor industry revenue rose 8% last year and declined 12% in 2019. The dynamics of income and expenditures on research and development over the past two decades is clearly shown in the graph.
The graph also includes a forecast for the period up to 2025. Analysts expect the industry’s revenue to grow and the share of R&D spending to decline. At the same time, R&D spending in the period from 2021 to 2025 will grow by 5.8% per year and by the end of the designated period will reach $ 89.3 billion.
Intel continued to lead in R&D spending last year. It alone accounted for about 19% of the total industry costs for this item. However, cost cuts, ditching certain product categories, and striving to maximize efficiency have driven Intel’s R&D spending down 4% in 2020 to about $ 12.9 billion. Note that this is Intel’s largest cutback since the mid-1990s. By comparison, Samsung, which ranks second in 2020, increased its R&D spending by 19% to $ 5.
In addition to Intel and Samsung, the top 10 companies topping the list by R&D spending include Broadcom, Qualcomm, Nvidia, TSMC, MediaTek, Micron, SK Hynix and AMD. Together, they spent $ 43.5 billion in 2020, which is equal to 64% of total industry spending. Compared to 2019, the growth in research and development spending in this group was 11%.
Intel remains the industry leader in R&D spending
Experts from the analytical company IC Insights studied the situation with the costs of research and development (R&D) in the semiconductor industry. According to their calculations, the crisis caused by the pandemic forced manufacturers to reduce the share of income allocated to R&D, but in absolute terms, these costs were at a record high.More specifically, R&D spending accounted for 14.2% of sales in 2020, up from 14.6% in 2019. Meanwhile, total semiconductor industry revenue rose 8% last year and declined 12% in 2019. The dynamics of income and expenditures on research and development over the past two decades is clearly shown in the graph.
The graph also includes a forecast for the period up to 2025. Analysts expect the industry’s revenue to grow and the share of R&D spending to decline. At the same time, R&D spending in the period from 2021 to 2025 will grow by 5.8% per year and by the end of the designated period will reach $ 89.3 billion.
Intel continued to lead in R&D spending last year. It alone accounted for about 19% of the total industry costs for this item. However, cost cuts, ditching certain product categories, and striving to maximize efficiency have driven Intel’s R&D spending down 4% in 2020 to about $ 12.9 billion. Note that this is Intel’s largest cutback since the mid-1990s. By comparison, Samsung, which ranks second in 2020, increased its R&D spending by 19% to $ 5.
In addition to Intel and Samsung, the top 10 companies topping the list by R&D spending include Broadcom, Qualcomm, Nvidia, TSMC, MediaTek, Micron, SK Hynix and AMD. Together, they spent $ 43.5 billion in 2020, which is equal to 64% of total industry spending. Compared to 2019, the growth in research and development spending in this group was 11%.
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