Semiconductor Market Continues to Increase R&D Spending in 2018

Wednesday February 14, 2018

2017 was a great year for the semiconductor industry, thanks to booming demand from existing and new markets and supply constraints of key products pushing prices up.  Total revenue in 2017 reached $419 billion, and is expected to grow a further 7.5% in 2018 to $451 billion (Gartner).

R&D spending benefited significantly from the increased revenue, with the top 10 semiconductor R&D spenders increasing outlays by 6% in 2017.  The push for R&D was driven not only by increased revenues but also by new markets gaining traction, particuarly IoT, AI, and cloud computing(Electronics Weekly).  Intel ranked top for R&D spending, accounting for 22% of total worldwide semiconductor R&D spending, while Nvidia and TSMC increased their spending on R&D the most compared to 2016 (23% and 20% increase, respectively) (Electronics Weekly).

2018 is expected to see further investments in R&D as diversification in the market continues.  According to the KPMG global semiconductor industry outlook, around 2/3rds of the 150 semiconductor industry leaders surveyed believed that diversification – particularly into AI, cloud computing and IoT – would lead to further revenue growth in 2018 (YourStory).
As such, semiconductor leaders are optimistic regarding the outlook on profitability, revenue, growth, capital spending, R&D spending, and workforce growth.  The industry leaders forecast, along with diversification, an increased focus on M&As and JVs and talent management as the market becomes increasingly technical and competitive (YourStory).
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