Semiconductor companies around the world are projected to increase R&D spending by 9% in 2022 to $ 80.5 billion after climbing 13% above average in 2021 to a record $ 71.4 billion. dollars, according to IC Insights forthcoming Q2 Update to McClean 2022 report.
Total research and development spending by semiconductor companies is projected to increase by a compound annual growth rate (CAGR) of 5.5% between 2022 and 2026 to $ 108.6 billion.
The Covid-19 pandemic has seen wary semiconductor suppliers keep tabs on increases in R&D spending even as chip industry revenues grew 11% in 2020, despite business closures and other measures. to slow the deadly pandemic. Spending on semiconductor research and development as a percentage of global industry sales fell to a ratio of 13.1% in 2021 compared to 14.5% in 2020 and 15.1% in 2019, when research and development fell 1%, and total chip market revenue fell 12%.
The following figure traces the levels of spending on semiconductor research and development and industry R&D / sales reports over the past four decades and IC Insights’ forecasts through 2026.
Total spending on semiconductor research and development has declined in just four years since the 1980s (-1% in 2019 during an economic slowdown, -10% in 2009 after the sector was hit by a severe global recession caused the collapse of the financial markets and the return to backlog of -10% in 2001 and -1% in 2002 when an economic recession coincided with the implosion of the Internet “dot-com” bubble at the turn of the century).
In the aftermath of the 2008-2009 global recession, semiconductor research and development spending rebounded sharply for a few years, but then spending slowed over the rest of the last decade for a variety of reasons, including continued economic uncertainty and a historic wave of acquisitions in the chip industry.
Since the year 2000, total semiconductor R&D spending as a percentage of world sales has exceeded the historic four-decade average of 14.5% in all but five years (2000, 2010, 2017, 2018 and 2020). In these five years, the lower ratios between R&D and sales have had more to do with the strength of total revenue growth than with the weakness of R&D spending by semiconductor suppliers.
Intel continued to outperform all other semiconductor vendors in R&D spending in 2021, accounting for approximately 19% of the industry total. Intel increased its R&D spending by 12% in 2021, reaching an all-time high of $ 15.2 billion, as part of its efforts to regain the lead in launching new generations of IC processing technologies and positioning itself as a leading provider of advanced wafer foundry services. In 2020, Intel’s R&D spending grew only 1% after dropping 1% in 2019.
Samsung came in second in the R&D rankings with expenses growing 13% to about $ 6.5 billion after a 23% increase in 2020. The company accelerated its R&D spending on processes. state-of-the-art logic (5nm and below) to increase competition with the market from leading Taiwan Semiconductor Manufacturing foundry, which increased its R&D spending by 20% in 2021 to approximately $ 4.5 billion after a 26% increase in 2020.
IC Insights’ 2021 R&D chart shows that 21 semiconductor vendors spent $ 1 billion or more on research and development compared to 19 companies in 2020. The top 10 on the R&D rankings collectively increased spending by 18% to $ 52.6 billion, which was about 65% of the industry’s total research and development last year. The R & D / sales ratio of the top 10 was 13.5% in 2021 compared to 14.5% in 2020, the next Q2 update says.