Semiconductor R&D spending to hit record high in 2012

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Worldwide spending on semiconductor R&D is expected to increase 10% in 2012 to a record high of $53.4billion.

According to market research firm IC Insights, the rise will lift R&D spending by chip companies to 16.2% of total semiconductor sales in 2012, which are now forecast to rise 3% to $329.8bn from revenues of $321.4bn in 2011. Intel's R&D expenditures accounted for 32% of the top 10 spending and about 17% of total R&D expenses at all semiconductor companies worldwide. The chip maker's 27% increase in R&D expenditures was the largest among companies spending $1bn or more on R&D last year. Fifth-ranked Qualcomm, the industry's largest fabless semiconductor supplier, increased its R&D spending by 25% in 2011, while silicon foundry giant TSMC raised its amount 23%. IC Insights' mid year update shows that US companies accounted for 57% of worldwide semiconductor R&D spending in 2011, followed by suppliers based in Japan, 17%; Europe, 10%; Taiwan, 8%; South Korea, 7%; and mainland China, 1%. Integrated device manufacturers accounted for about 66% of R&D spending by semiconductor companies in 2011, while fabless suppliers represented 29%, and pure play foundries made up the remaining 5% of the total.