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Intensive inputs
European semiconductor industry declared Europe’s most R&D intensive
Europe’s semiconductor industry has ranked first top for R&D investment intensity in a recently released European Commission 2010 EU Industrial R&D Investment Scoreboard, which every year calculates and ranks the ratio of R&D investment over net sales of 1400 listed companies worldwide. With a record ratio of 21.8% of annual R&D expenditure over annual sales, the sector’s R&D intensity is almost eight times that of the EU industry average.
Semiconductors rank alongside other sectors such as biotechnology or software as a High R&D intensity sector, with semiconductor R&D investment reaching 3.3 billion EURO in 2009 amongst the surveyed companies. The European R&D intensity average is calculated at 2.8% for 2009. For 2008 figures, surveyed chip makers were second with a 18% ratio and R&D investments of over 4 billion EURO. The result is replicated at the worldwide level, where semiconductor manufacturers were ranked second with 16.8% R&D intensity, also up one position from the 2008 report figures (15%) and positioned between biotechnology and pharmaceuticals.
Carlo Bozotti, ESIA President as of 2011 and President and CEO of Europe’s largest chip maker STMicroelectronics welcomed the outcome, commenting: “The 2009 data proves the continued importance of R&D to Europe’s semiconductor industry – an industry which kept on investing in R&D and innovation despite one of its most challenging years on record. It is no coincidence that as an enabling technology sector the semiconductor industry continues to be one which is driving Europe’s economy out of its economic crisis.
“Maintaining R&D investments at such high levels in a highly globalized economic environment also puts some unique demands on companies,” he continued. “ These demands must be recognized and supported in a more coherent and far stronger way to ensure Europe remains a top semiconductor player in the competitive global marketplace. It is critical that the existing European Key Enabling Technologies (KETs)1 initiative succeeds in delivering the right framework and we must be ready for it with the whole value chain.”
In a dedicated section the scoreboard also notes that EU chip-company investments are higher than other key semiconductor producing regions. One explanation the scoreboard gives for this is an emphasis that European semiconductor companies place on important and high-growth smaller markets, where these focused investments have smaller sales over which to spread the cost of the R&D.
“2009 was an extraordinary year in many ways. It is clear that EU companies are top scorers in focused high-potential markets such as automotive, medical devices or smart cards, while also serving all semiconductor markets. We should continue to anticipate market dynamics to stay at the forefront of the global semiconductor industry,” said ESIA R&D Group’s Chair Fred van Roosmalen (NXP).
