Chip makers boost R&D spending

Total research and development (R&D) spending by semiconductor companies exceeded $30 billion in 2005, an increase of nearly 10% from 2004, according to a new study by researcher IC Insights.

Overall, R&D spending by all semiconductor companies worldwide grew at an annual average rate

Among the top 25 integrated device manufacturers (IDMs), Intel’s R&D expenditures were $22.1 billion between 2001 and 2005, about $10 billion more than any other semiconductor company. Intel’s R&D spending accounted for 26% of total R&D money spent by the top 25 IDMs that manufacture products and break out semiconductor financial results, along with research and development costs.

While Intel’s R&D expenditures dominated the semiconductor industry, the company’s five-year average rate of spending, based on a percentage of sales, was just 14%. In the past five years, the top 25 IC manufacturers averaged 16% of sales for R&D expenditures. The R&D spending level for the top 30 fabless suppliers was 17% of sales based on the analysis IC Insights.

Samsung was the second biggest R&D spender with about $12 billion over the five-year period and Texas Instrument was third at $9 billion.