TSMC increases R&D spend by nearly 50 percent

Chip firm TSMC upped its research and development spending by nearly 50 percent in 2010, making it one of the top 10 spenders in the R&D department of the semiconductor industry last year.

IC Insights released a report that showed TSMC rising into the top 10 with a 44 percent increase in R&D spending, up from $656 million in 2009 to $945 million in 2010. 

This increase secured it the tenth spot on the list, beneath a number of other big names who have been spending big time on research lately. Intel topped the list, with Samsung and STMicro taking second and third slots respectively. Renesas, Broadcom, Toshiba, Qualcomm, TI, and AMD also featured above TSMC.

The majority of the above companies, including TSMC, operate a fabless or fab-lite model, which is becoming an increasingly successful business model. R&D is a larger element of the fabless approach, with these companies typically spending more of their revenue in this area.

Integrated device managers and fabless IC suppliers tend to spend between 15 and 20 percent of their budgets on research, nearly double the five to 10 percent that foundries spend, even though the latter will often have more money at their disposal. 

TSMC’s research spending is forecast to increase by another 20 percent this year, resulting in a total R&D spend for 2011 at $1.1 billion.