 Intel Corp has spent an impressive $10 billion US dollars more on research and development (R&D) than any other semiconductor company in the period between 2001 and 2005 that amounted to $22.1 billion in that time frame, according to IC Insights' newly revised ‘Strategic Reviews Online' database. Intel's R&D spending accounted for 26 percent of total R&D expenditure by the top 25 Integrated Device Manufacturers (IDM's)
However, based on a five-year weighted average of R&D spending compared to Intel's sales in that period the chip giant's R&D spend was only 14 percent of sales. The market research firm highlighted that the other top 25 IC manufacturers averaged 16% of sales for R&D expenditures. Companies close to the average included Texas Instruments at $9.0 billion that equated to 17% of semiconductor related sales but only 10 percent of group sales. STMicroelectronics also came in 17 percent of semiconductor sales at a total spend of $6.4 billion but only 7 percent of group total sales in the period covered. Notably, Samsung a growing force within the semiconductor industry has spent $12.0 billion on R&D which equates to 20 percent of sales and 14% of group's total R&D spending. Infineon followed Samsung with $6.3 billion spent on R&D or 19% of sales but was only 7 percent of group total. Freescale spent $5.2 billion on R&D but was 20% of semiconductor sales yet only 6% of group total within the five year period. IC Insights found that pure-play foundries consistently spend less of their sales on R&D compared to IDMs and major fabless customers. Between 2001 and 2005, TSMC invested a total of $1.8 billion, or 6 percent of sales, on R&D, while its major competitor UMC, spent $1.1 billion in the past five years on R&D, or 9.0 percent of sales. IC Insights attributes the lower spending levels due to foundries not needing to develop their own IC's and can concentrate on process related spending. Chartered Semiconductor invested $539 million in R&D, or 14 percent of sales, between 2001 and 2005, while SMIC spent only $236 million, or 9 percent of sales. Though it should be noted SMIC settled a law suit with TSMC over process technology theft last year and is paying over $200 million to TSMC over a set period of years! Total R&D spending by semiconductor companies exceeded $30 billion in 2005, an increase of nearly 10% from 2004. Overall, research and development spending by all semiconductor companies worldwide grew at an annual average rate of 9% between 2001 and 2005. The world's 30 largest fabless semiconductor suppliers increased their R&D expenditures at double that rate during the first half of this decade, according to IC Insights.
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