Research spending in the semiconductor industry continues to rise, with Intel remains the leader in spending

Research spending in the semiconductor industry continues to rise, with Intel remains the leader in spending


Research and development (R&D) spending by semiconductor manufacturers will continue to increase at a CAGR of 5.8% from 2021 to 2025 to reach $ 89.3 billion, according to analyst firm IC Insights. This is evidenced by the data of the analysts’ report published on the company’s website.

The report said that when the world was negatively impacted by the coronavirus pandemic last year, semiconductor manufacturers were holding back R&D investment. Despite the unfavorable environment caused by the pandemic, the industry’s revenue grew by an impressive 8% over the year. As for development costs, over the past year they increased by 5% and reached $ 71.4 billion.

The source notes that since the end of the 70s of the last century, semiconductor manufacturers’ research and development costs have decreased only four times. A decrease in investment volumes at the level of 1% due to the economic downturn was recorded in 2019, and in 2009 there was a decrease in investment by 10% due to the global recession. The economic downturns also led to a 1% decline in R&D investment in the semiconductor industry in 2002 and 10% in 2001. It is noted that after the global recession of 2008-2009, spending on R&D increased significantly in 2010 and 2011, after which, over the past decade, their further increase has slowed down.

If we consider investments in research and development of individual manufacturers, then Intel continues to lead here. Last year, Intel’s R&D spending accounted for 19% of global spending in this direction. Despite this, the American corporation continues to work on reducing costs, abandoning the production of certain types of products and increasing efficiency. This led to the fact that last year Intel’s R&D spending fell by a record 4% to $ 12.9 billion. Samsung is the second largest investment in research and development in the semiconductor industry, which increased spending in 2020 by 19% to $ 5. 6 billion

In addition to Intel and Samsung, the largest research investors in the semiconductor industry are Broadcom, Qualcomm, Nvidia, TSMC, MediaTek, Micron, SK Hynix and AMD. Together, these ten companies increased their R&D spending by 11% to $ 43.5 billion, or 64% of the industry’s global figure. It is noted that in 2020 Nvidia climbed to the fifth place in the ranking of the largest investors in R&D (a year earlier the company was in sixth place), MediaTek climbed two positions at once and took seventh place, and AMD climbed to the tenth place of the largest investors.

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