American chip companies spent more than half of the industry’s total investment in research and development (R&D) in 2021, according to IC Insights. Despite political and national security concerns about U.S. domestic semiconductor production, about 56% of global R&D spent in 2021 was by companies headquartered in the Americas region—essentially all of them in the U.S. A large chunk of that came from Intel (19%, or $15.2 billion last year).
Figure 1 shows semiconductor R&D expenditures by Asian-Pacific companies—including wafer foundries, fabless chip suppliers, and integrated device manufacturers (IDMs) — exceeded 29% of the worldwide total in 2021, followed by those based in Europe at about 8%, and Japan at nearly 7% of industry spending. Since 2011, the global share of semiconductor R&D expenditures held by American chip companies grew slightly from nearly 55% and Asia-Pacific companies (including China) climbed from 18%.
Worldwide, semiconductor companies spent 13.1% of combined sales on R&D in 2021 ($80.5 billion) versus 15.5% ($50.8 billion) in 2011, according to IC Insights’ 2Q22 Update of The McClean Report. R&D spending covered by IC Insights’ industry analysis include expenditures by wafer fab-operating IDMs, fabless chip suppliers, and pure-play foundries, but does not include other companies and organizations involved in semiconductor-related technologies, such as production equipment and materials suppliers, packaging and test service providers, universities, government-funded labs, and industry cooperatives.
R&D expenditures as a percent of semiconductor sales for companies headquartered in the Americas region averaged 16.9% in 2021. The R&D-to-sales ratio for semiconductor suppliers in the Asia-Pacific region was 9.8% in 2021, while European companies spent about 14.4% of their combined chip revenues on research and development last year. Japanese semiconductor companies had a combined R&D/sales ratio of 11.5% in 2021, according to IC Insights’ current update report.
Semiconductor companies based in Taiwan—including wafer foundries, like Taiwan Semiconductor Manufacturing Co, (TSMC)—accounted for 14.4% of the industry’s total R&D expenditures in 2021 (about $11.7 billion). IC Insights’ analysis also shows South Korean suppliers—including Samsung—represented 11.9% ($9.9 billion) of global semiconductor R&D spending. Chinese companies accounted for 3.1% (nearly $2.0 billion) of the semiconductor industry’s R&D expenditures last year, and the rest of the Asia-Pacific region was just 0.04% (about $300 million) of the global total, according to the update report.
In terms of R&D spending as a percent of sales, Taiwanese and Chinese companies averaged about 11.3% and 12.7%, respectively, in 2021, while South Korean companies (heavily influenced by memory giants Samsung and SK Hynix) had an average of 8.1% last year.
For more information contact Rob Lineback at rob@icinsights.com
