Advertisement
New Zealand markets open in 1 hour 6 minutes
  • NZX 50

    11,671.19
    -96.21 (-0.82%)
     
  • NZD/USD

    0.6133
    -0.0011 (-0.18%)
     
  • ALL ORDS

    8,010.50
    -5.30 (-0.07%)
     
  • OIL

    81.47
    -0.10 (-0.12%)
     
  • GOLD

    2,342.70
    -4.20 (-0.18%)
     

Semiconductor R&D spending by company: Top 12

In this article, we will talk about the top 12 semiconductor companies that spend the most on research and development. If you wish to skip our detailed analysis, you can go directly to Semiconductor R&D Spending By Company: Top 5.

The Global Semiconductor Shortage

Semiconductors are vital for the majority of technologies around us including automobiles, communications systems, computers, household appliances, and more. These tiny chips witnessed an extreme shortage during the pandemic when consumer demands suddenly shifted. People became more inclined towards consumer electronics and PCs, due to the rise of remote work and education, while vehicle sales dropped. The industry also faced massive supply chain disruption and logistical issues that further fueled the shortage.

The semiconductor industry is currently in its recovery phase. Many semiconductor products including smartphones have even come a full circle from being short to having a surplus. One of the most prominent semiconductors that still seem to be struggling are the GPUs used for training and developing AI applications like ChatGPT. NVIDIA Corporation (NASDAQ:NVDA) dominates the market and controls almost 80% of the supply. The reliance on this singular giant in the semiconductor GPU market slowed the progress of many companies developing generative AI products.

ADVERTISEMENT

Generative AI companies have been struggling to meet their needs as the supply is limited to one dominant company. To keep up, generative AI companies have started to explore more options and overcome this shortage. On October 6, Reuters reported that OpenAI is exploring the option of making its own chips instead of relying on external chipmakers. By making its chips, the company will be able to reach its goals for expansion without potential delays caused by the shortage. It will also enable the company to have more control and diversity in its supply. 

Governments across the globe have also become more alert to the issue of semiconductor shortages and are making efforts to nurture its growth. Many countries have announced attractive government incentives to encourage companies to set up manufacturing and production in them. The CHIPS and Science Act by the United States government is noteworthy. According to a report by the Semiconductor Industry Association (SIA), the earnest implementation of the Act that began at the start of 2023 has gathered $200 billion in private investments. Even in light of the semiconductor market tug-of-war between the US and China, implementing the CHIPS Act can potentially create thousands of jobs and foster the semiconductor ecosystem in the country. The close involvement of the governments could move the semiconductor shortage in the right direction, overcoming the ongoing slump. You can also check out Semiconductor R&D Spending By Country: Top 12.

Semiconductor Industry At A Glance

According to a report by Precedence Research, the global semiconductor market was valued at $664.2 billion in 2023. The market has been estimated to grow to $1.88 trillion by 2032, at a compound annual growth rate (CAGR) of 12.28%.

The Asia Pacific region dominates the semiconductor market. According to the report, the region will uphold its position through the forecast period. In 2022, the Asia Pacific semiconductor market was valued at $230.5 billion, which accounted for 46% of the total market share. The presence of top-notch semiconductor companies in China, South Korea, Japan, and Taiwan contributes to the region's distinct position in the global market. North America and Europe have also been estimated to grow substantially during the forecast period. Increasing investments alongside advanced R&D are predicted to be the main factors in this growth.

By application, the networking and communications segment was the most noteworthy. According to the report, in 2022, the segment comprised 34% of the market share. As the popularity of smartphones rises, so does the demand for semiconductors used for its manufacturing. The demand for smartphones is expected to stay strong; therefore, the segment is estimated to grow as well.

Major Players in the Semiconductor Industry

Some of the biggest players in the semiconductor industry include NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Advanced Micro Devices Incorporated (NASDAQ:AMD).

NVIDIA Corporation (NASDAQ:NVDA) has emerged as one of the most noteworthy names in the semiconductor industry. The use of NVIDIA Corporation (NASDAQ:NVDA) chips in training generative AI applications substantially boosted the company's popularity. The company constantly introduces innovations to maintain its position in the global market. On October 30, Reuters reported that NVIDIA Corporation (NASDAQ:NVDA) has published research on using AI in designing semiconductor chips. The company has combined more than three decades of data with a Large Language Model (LLM), similar to the one used in chatbots, to assist in the chip designing process. Training the chatbot from the experiences of the company would also help train junior designers and engineers as it can answer their queries quickly.

Another major player using innovation and advancing R&D to stay ahead of its competitors is QUALCOMM Incorporated (NASDAQ:QCOM). On October 25, Reuters reported that QUALCOMM Incorporated (NASDAQ:QCOM) has announced the launch of its Snapdragon Elite X chip that will be available in laptops starting next year. Growing AI features have stirred the demand for laptops with more advanced chips that can perform tasks efficiently. These chips will be used in the Microsoft Corporation (NASDAQ:MSFT) laptops and computers, facilitating them to directly compete with the chips used by Apple Inc. (NASDAQ:AAPL).

Advanced Micro Devices Incorporated (NASDAQ:AMD) is also a giant in the semiconductor industry. The company is making strategic acquisitions to nurture innovation. On October 10, Reuters reported that Advanced Micro Devices Incorporated (NASDAQ:AMD) plans to buy Nod.ai, an AI startup. The aim is to build a unified collection of software that will be used to power many semiconductor chips that the company makes. The AI startup will catalyze the company's journey to achieve this goal as it uses AI models suited for the company's chips. 

R&D is pertinent to sustain a reputable position in this highly competitive industry. Many semiconductor companies allocate large sums of money for this purpose annually. We have made a list of the top companies that have the highest R&D spending.

Semiconductor R&D spending by company: Top 12
Semiconductor R&D spending by company: Top 12

Semiconductor R&D spending by company: Top 12

Our Methodology

To make a list of the top 12 companies that spend the most on semiconductor R&D, we initially found the largest semiconductor companies. The largest semiconductor companies were separated based on their market cap. We made a list of the top 30 companies, building on the hypothesis that larger companies spend more on R&D as well. We then individually looked up their trailing twelve-month research and development expenses from Macrotrends. The companies have been ranked based on the trailing twelve-month research and development expenses for the latest data available. The list has been arranged in ascending order. 

Semiconductor R&D spending by company: Top 12

12. Microchip Technology Incorporated (NASDAQ:MCHP)

Trailing Twelve Months R&D Expense as of June 30, 2023: $1.15 Billion

Microchip Technology Incorporated (NASDAQ:MCHP) is one of the largest semiconductor companies in the world. It earns the majority of its revenue from the sale of its microcontroller units (MCUs) that are used in a variety of electronic devices. The company has advanced research and development facilities in India and France. For the twelve months ending June 30, Microchip Technology Incorporated (NASDAQ:MCHP) has spent $1.15 billion on research and development.

11. Analog Devices Incorporated (NASDAQ:ADI)

Trailing Twelve Months R&D Expense as of July 31, 2023: $1.68 Billion

Analog Devices Incorporated (NASDAQ:ADI) is a renowned company in the global semiconductor market. It manufactures a variety of products including analog, mixed-signal, and digital signal processing (DSP) integrated circuits. In July, Analog Devices Incorporated (NASDAQ:ADI) announced its plans to invest in India to expand its R&D operations. The investment will be made during the next five years and will create the company's largest design center in Banglore, India. As of July 31, it has a trailing twelve-month R&D expenditure of $1.68 billion.

10. Texas Instruments Incorporated (NASDAQ:TXN)

Trailing Twelve Months R&D Expense as of September 30, 2023: $1.84 Billion

Texas Instruments Incorporated (NASDAQ:TXN) is one of the top semiconductor companies by market share. The company is constantly working on developing new products. The company has a 300-mm manufacturing roadmap for which the Utah plant is central. Texas Instruments Incorporated (NASDAQ:TXN) is constructing new plants alongside R&D to meet its goals and build capacity for its manufacturing roadmap. It has spent $1.84 billion on research and development over the past twelve months, as of September 30.

9. Marvell Technology Incorporated (NASDAQ:MRVL)

Trailing Twelve Months R&D Expense as of July 31, 2023: $1.85 Billion

Marvell Technology Incorporated (NASDAQ:MRVL) is the leading name in the industry providing data infrastructure solutions. One of the most significant R&D centers of the company is located in Vietnam. For the twelve months ending July 30, Marvell Technology Incorporated (NASDAQ:MRVL) has spent $1.85 billion on research and development.

NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Advanced Micro Devices Incorporated (NASDAQ:AMD) have invested large sums of money in semiconductor research and development and dominate the industry.

8. NXP Semiconductors NV (NASDAQ:NXPI)

Trailing Twelve Months R&D Expense as of June 30, 2023: $2.25 Billion

NXP Semiconductors NV (NASDAQ:NXPI) is one of the top companies based on semiconductor R&D spending. In September, NXP Semiconductors NV (NASDAQ:NXPI) stated that it would provide a grant via the 2nd Important Project of Common European Interest on Microelectronics (IPCEI ME/CT). The grant will enable the company to nurture R&D capabilities in Europe. As of June 30, it has a trailing twelve-month R&D expenditure of $2.25 billion.

7. Micron Technology Incorporated (NASDAQ:MU)

Trailing Twelve Months R&D Expense as of August 31, 2023: $3.11 Billion

Micron Technology Incorporated (NASDAQ:MU) is one of the largest semiconductor companies by market cap. The company specializes in the research and development of advanced memory and storage solutions. Micron Technology Incorporated (NASDAQ:MU) has spent $3.11 billion on research and development over the past twelve months, as of August 31. 

6. Broadcom Incorporated (NASDAQ:AVGO)

Trailing Twelve Months R&D Expense as of July 31, 2023: $5.06 Billion

Broadcom Incorporated (NASDAQ:AVGO) has one of the highest R&D spending in the semiconductor industry. Broadcom Incorporated (NASDAQ:AVGO) develops advanced semiconductor solutions for various industries, including AI. For the twelve months ending July 31, it has spent $5.06 billion on research and development

Some of the giants in the semiconductor industry include NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Advanced Micro Devices Incorporated (NASDAQ:AMD).

Click to continue reading and see the Semiconductor R&D Spending By Company: Top 5.

Suggested articles:

Disclosure: None. Semiconductor R&D Spending By Company: Top 12 is originally published on Insider Monkey.