Intel spent 3x Qualcomm’s R&D spend. Qualcomm was the second largest R&D spender.
Samsung was third. It’s R&D spend flat since 2011 at $2.8 billion. The top ten were:
Whereas Samsung’s R&D-to-sales ratio is under 10%, Intel’s is over 20%.
The IBM Common Platform alliance has helped Samsung to keep its R&D-to-sales ratio below 10% in recent years.
Another explanation for Samsung’s low R&D-to-sales ratio is that its primary business is making and selling DRAM and flash memory devices, which are commodity-type products that are very capital-intensive, but not as R&D-intensive as the complex, high-performance logic-based products made by Intel and TSMC.
Samsung’s sales have been growing much faster than its R&D spending (15% annual growth in sales during 2001-2013 versus 5% yearly growth for R&D spending over the same time period.
Meanwhile, Intel saw its R&D spending jump to 22% of its semiconductor sales in 2013 as compared to 21% in 2012 and 17% in 2011. The company’s R&D spending reached a record-high $10.6 billion in 2013, but it was just 5% above 2012 spending.
Number four-ranked Broadcom’s R&D spending as a percent of semiconductor sales was 30% in 2013. Broadcom, the second-largest fabless IC supplier, has had the highest R&D spending as a percentage of revenue among the top-10 spenders every single year since breaking into the top-10 ranks in 2006.
Broadcom’s R&D-to-sales ratios varied widely during its formative years, including a couple years (2001 and 2002) when it spent all of its sales on R&D, but since 2006 the company’s R&D budgets have grown at the same 12% annual rate as its sales, keeping its R&D-to-sales ratios at an average of 31%!
Another interesting fact about the R&D spending ranking is that the top 10 companies spent almost one percentage point less on R&D as percent of semiconductor sales than the average for all chip companies in 2013 (15.8% versus 16.7%).
That’s the first time the top-10 R&D/sales ratio came in at a lower rate than the overall industry ratio since IC Insights started reporting detailed semiconductor R&D trends in 2005.
Combined R&D spending by the top 10 exceeded total spending by the rest of the semiconductor companies ($28.7 billion versus $26.0 billion) in 2013, something that has continued to hold true since 2005 and probably well before that.
Five of the top 10-ranked companies are based in the U.S., while two are in Japan, two in the Asia-Pacific region, and one in Europe. Two of the top 10—Qualcomm and Broadcom—are fabless semiconductor companies.
One result of the growing fabless and fab-lite trend is that, in 2010, for the first time ever, a pure-play foundry joined the group of top-10 semiconductor R&D spenders.
TSMC increased its R&D spending 44% in 2010, moving it from 18th to 10th place in the R&D ranking in one year. The company’s R&D spending has continued to climb since then with 2013 R&D growing 18% to reach a little over $1.6 billion.