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Semiconductor R&D expenditures rising faster than revenues, says IC Insights

10 July 2008 | By Mark Osborne | News > Fab Management

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R&D ExpenditureSemiconductor R&D and engineering costs are rising at a faster rate than IC sales, according to a new report from IC Insights. R&D and engineering expenditures increased at a compound average growth rate (CAGR) of 12.7 percent between 1990 and 2007, while semiconductor sales grew at a CAGR of 9.9 percent in the 17-year period.

In 2007, IDMs, fabless and pure-play wafer foundries spent a total of $45.7 billion on R&D and related engineering activities, up 8 percent compared to $42.5 billion spent in 2006, according to IC Insights.

In the first quarter of 2008, spending on semiconductor research and development grew 12 percent to $11.1 billion compared to $10.0 billion in R&D expenditures in the same period last year. R&D spending as a percent of semiconductor market sales was 17.5 percent compared to 16.4 percent in the same quarter last year.

According to IC Insights, foundries spent only 7.1 percent of total sales on R&D and engineering expenditures in 1Q08.

R&D Expenditure

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