[R&D Current Status] Intel Pouring Investments... South Korea Lags Behind Other Countries in Investment

Global Semiconductor R&D Spending Hits $80.5 Billion
United States Leads...Intel Ranks First

[Asia Economy Reporter Kim Pyeonghwa] In March, Intel announced a research and development (R&D) investment plan worth 80 billion euros (approximately 106.9928 trillion KRW) in Europe. The company also revealed plans to build an R&D center near Paris, France, to conduct research on high-performance computing (HPC) and artificial intelligence (AI) design.

Last year, Intel also announced a $600 million (approximately 796.2 billion KRW) investment to expand its R&D center in Israel. Pat Gelsinger, Intel's CEO, said regarding the European R&D investment, "With a broad plan, we aim to promote R&D innovation in Europe and establish cutting-edge manufacturing capabilities that benefit global customers and partners."

Major countries worldwide are eager to expand R&D investments in key industries such as semiconductors, electric vehicles, and secondary batteries through public-private partnerships. When governments boldly provide institutional and financial support, companies respond with generous investments to maximize their competitiveness. Especially in the semiconductor sector, often called the "rice of modern industry," the competition is about who secures the ultra-gap technology first, leading to massive R&D investments.

A representative company aggressively investing in foundries is the U.S.-based Intel. Last year, it invested the largest amount in R&D among global semiconductor companies. The investment totaled $15.2 billion (approximately 20.1674 trillion KRW), accounting for 19% of global semiconductor spending and more than twice that of Samsung Electronics.

TSMC of Taiwan, competing with Samsung Electronics in the foundry market, also invested $4.5 billion (5.9715 trillion KRW) last year under full government support. This figure represents a 20% increase compared to the previous year. In 2020, TSMC also recorded a 26% increase in investment, viewing R&D investment as a key card to enhance business competitiveness. The Taiwanese government's active R&D support and cross-border cooperation are yielding results. In June, TSMC opened a new semiconductor R&D center in Ibaraki Prefecture, Japan.

On the other hand, the scale of R&D investment by Korean semiconductor companies lags far behind global competitors, who spent about 13.1% of their total revenue on R&D last year. Market research firm IC Insights reported in its latest report that global semiconductor R&D spending reached $80.5 billion last year, growing 58.5% over ten years.

Of this, 55.8% was made by companies headquartered in the U.S., like Intel. During the same period, semiconductor R&D spending in the Asia-Pacific region, including Korea, Taiwan, and China, ranked second at 29.5%, followed by Europe at 8.1% and Japan at 6.6%. Among Asia-Pacific countries, Korean companies' R&D proportion is particularly low. As of the end of last year, Korean semiconductor companies' R&D spending accounted for only about 11.9% of the global total.

Regarding R&D spending as a percentage of revenue, the U.S. recorded 16.9%, while Korea was at 8.1%, trailing behind China (12.7%), Japan (11.5%), and Taiwan (11.3%).

Korea's insufficient R&D investment in the semiconductor industry could lead to worsening competition in patent technology. According to the Korean Intellectual Property Office, in the foundry sector, the global patent application share related to the cutting-edge Gate-All-Around (GAA) technology is led by TSMC at 31%, followed by Intel (24%), IBM (19%), and Samsung Electronics (18%).