As global competition for semiconductor development intensifies, the amount of money poured into research and development has steadily increased over the past 40 years. With the figure expected to increase to $110 billion by 2026, Intel is making the largest R&D expenditure ever, with Samsung closely following in second place.

According to a report released by IC Insights on the 5th (local time), the top 10 semiconductor companies worldwide increased their R&D spending by 18% compared to last year, and 21 companies invested more than 1 billion dollars in R&D.

IC Insights forecasts that global semiconductor companies' R&D spending increased by more than 13% last year to $71.4 billion, and that it will increase by 9% to $80.5 billion in 2022. Total R&D spending by semiconductor companies is expected to reach $108.6 billion by 2026, growing at a compound annual growth rate (CAGR) of 5.5%.

IC Insights also reported that Intel surpassed all other semiconductor suppliers in R&D spending in 2021, accounting for about 19% of the industry total. Intel explained that it is focusing on launching next-generation IC processing technologies and establishing itself as a major provider of advanced wafer foundry services. To this end, it recorded a record-high $15.2 billion in R&D spending in 2021, up 12% from last year, and the difference in R&D spending between 2019 and 2020 was found to be small.

Samsung ranked second in IC Insights’ 2021 R&D rankings, with an estimated R&D spending of $6.5 billion, up 13% from a 23% increase in 2020. The domestic memory giant is also accelerating its R&D spending, focusing on 5nm advanced logic processes to compete with foundry powerhouse TSMC, it added. It increased its R&D spending to about $4.5 billion in 2021, following a 26% increase in 2020.

IC Insights' 2021 R&D rankings show that 21 semiconductor suppliers spent more than $1 billion on R&D. The top 10 companies in the R&D rankings were found to have increased their R&D by 18% year-on-year to $52.6 billion, accounting for approximately 65% of the industry's total R&D last year.

The R&D to sales ratio of the top 10 companies was 13.5% last year, compared to 14.5% in 2020, showing a slight decrease from the previous year.

In 2020, when the world was in crisis due to the COVID-19 virus, semiconductor industry revenue grew by more than 11% despite semiconductor suppliers implementing factory closures and other emergency measures to slow the deadly pandemic. In contrast, R&D spending tended to suppress growth.

The share of semiconductor R&D spending in global semiconductor industry sales fell from 15.1% in 2019 to 14.5% in 2020 and 13.1% in 2021. While semiconductor R&D spending levels have continued to increase over the past 40 years, the industry’s ratio of R&D to sales has fluctuated frequently.

This is closely related to the global economy, as overall semiconductor R&D spending has historically experienced four downturns. The recession that followed the dot-com bubble burst resulted in a 10% decline in 2001 and a 1% decline in 2002, a 10% decline in 2009 when the global economic downturn was hit by the financial collapse caused by the subprime mortgage crisis and the industry was hit by the financial crisis, and a 1% decline in 2019 during the recession.

The report assessed that semiconductor R&D spending had recovered significantly in the past few years from the aftermath of the global recession in 2008 and 2009, but that spending has slowed over the past decade due to a variety of factors, including continued economic uncertainty and a wave of mergers and acquisitions.

Since 2000, total semiconductor R&D spending as a percentage of global semiconductor sales has exceeded the average of 14.5% in all periods except five (△2000, 2010, 2017, 2018, and 2020). The report added that the five years below the average were more related to the growth of overall semiconductor sales than to a decline in R&D spending by semiconductor suppliers.