Intel, Qualcomm, Samsung named top R&D spending leaders
While the semiconductor industry is defined by a rapid technological change, a company's R&D investment determines its competitive position within the industry. According to the IC Insights 2013 report, Intel had planted itself firmly at the top of the heap, accounting for 37 per cent top ten spending and 19 per cent of total worldwide semiconductor expenditures.
Intel's R&D spending was over three times more than the second-place Qualcomm's spending, which constituted a very strong 28 per cent increase in 2013. This solidified the company's position as the second largest R&D spender, a rank it first achieved in 2012. Samsung placed third, whose annual R&D budget had remained relatively flat at $2.8 billion since 2011.
While Intel and Samsung are both independent device manufacturers, with Qualcomm being fabless, the IC Insights report showed that Samsung kept its R&D-to-sales ratio below 10 per cent through its participation in IBM's Common Platform joint development alliance for the most part. Furthermore, Samsung's business involves manufacture of commodity type products such as DRAM and flash memory devices—products that are not as R&D-intensive as those of Intel's and TSMC's. Overall,�Samsung's sales had grown much faster than its R&D spending at 15 per cent annual sales growth versus its 5 per cent in R&D spending over 2001 to 2013.
The second-largest fabless IC supplier Broadcom ranked four, with the highest 30 per cent R&D spending as a percentage of revenue among the top ten spenders. Meanwhile, it was revealed in the same IC Insights report that the top ten companies spent nearly one percentage less on R&D as a percentage of semiconductor sales at 15.8 per cent than the 16.7 per cent average for all companies in 2013. This was said to be the first time the top ten R&D-to-sales ratio came in at a lower rate than the overall industry ratio since IC Insights started report in 2013.
Five of the top 10-ranked companies are based in the U.S., while two are in Japan, two in the Asia-Pacific region, and one in Europe. Two of the top 10—Qualcomm and Broadcom—are fabless semiconductor companies.
One result of the growing fabless and fab-lite trend is that, in 2010, for the first time ever, a pure-play foundry joined the group of top-10 semiconductor R&D spenders. TSMC, the industry's largest foundry, increased its R&D spending a hefty 44 per cent in 2010, moving it from 18th to 10th place in the R&D ranking in one year. The company's R&D spending has continued to climb since then with 2013 R&D growing 18 per cent to reach a little over $1.6 billion.
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