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Chart: The Global Leaders in R&D Spending, by Country and Company

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Chart: The Global Leaders in R&D Spending, by Country and Company

Chart: The Global Leaders in R&D Spending

The countries and firms that put the most into R&D

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Given a choice of being the disruptor or the disrupted, many would prefer to choose the former.

But it’s not as easy as just flipping a switch and subsequently reaping the benefits of a forward-looking vision, new product categories, and forthcoming patents. Instead, an organization has to proactively acquire this innovation and intellectual capital from somewhere.

For many established companies, there is no other choice but to buy innovative startups through M&A to get their innovation fix, though this typically comes at a marked up price. On the flipside, especially for companies in tech, auto, and pharmaceutical spaces, innovation likely has to be in the DNA of the company culture, managerial decisions, and any new talent hired.

Global Leaders in R&D Spending

For those companies that aim to innovate internally, money needs to go into the research and development (R&D) line of their income statement.

Today’s chart looks at the countries that put the most into R&D (in % of GDP terms, and absolute $ terms), as well as the companies that have spent the most on R&D in the last 12 months trailing.

It’s also worth noting that money put into R&D is like any other investment – the money can be used wisely or simply squandered into initiatives that don’t pay off. Despite this, R&D spending is a loose approximation for global innovation.

R&D by Country

Global R&D spending is heavily concentrated in the G20 countries. In total they account for 92% of all R&D spending, and 94% of all patents granted at the U.S. Patent and Trademark office.

Here is a breakdown of R&D spending by GDP of select G20 countries:

CountryR&D Spending (% GDP)
South Korea4.23%
Japan3.29%
Germany2.93%
United States2.79%
France2.22%
Australia2.11%
China2.07%
Canada1.71%
United Kingdom1.70%
Italy1.33%
Russia1.10%
Turkey0.88%
South Africa0.73%
Argentina0.63%
Mexico0.53%

By total dollar spend, however, massive economies like the United States, China, and the EU take their rightful place.

RankEconomyR&D Spending ($) in 2015
#1United States$463 billion
#2China$377 billion
#3European Union$346 billion
#4Japan$155 billion
#5South Korea$74 billion

R&D by Company

On a company basis, the top five R&D spenders today are mostly technology companies.

RankCompanyR&D Spending (Last 12 months)
#1Amazon$17.4 billion
#2Volkswagen$15.1 billion
#3Alphabet$14.5 billion
#4Intel$12.8 billion
#5Samsung$12.8 billion

Interestingly, that wasn’t always the case – even as short as 10 years ago, the largest R&D spenders tended to be pharmaceutical companies like Pfizer, or automobile manufacturers like GM and Volkswagen.

A final note: Amazon doesn’t list R&D on its income statement directly, and instead classifies everything under a “Technology and Content” line which includes R&D. While it is likely Amazon is an R&D leader, there isn’t an exact number for it as of now.

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Ranked: Largest Semiconductor Foundry Companies by Revenue

Most of the 10 largest semiconductor foundries in the world, are headquartered in just three Asian countries, accounting for 90% of the entire industry’s revenue.

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A cropped chart showing the largest semiconductor foundry companies by their percentage of global revenues in Q1 2023.

Ranked: Largest Semiconductor Foundry Companies by Revenue

They’re in our phones, cars, planes, and even fridges.

Semiconductor chips have become critical for the modern way of life, and the biggest semiconductor foundry companies rake in billions of dollars from widespread demand.

This chart shows the largest semiconductor foundry companies by their percentage of global revenues in Q1 2023, using data sourced from Trendforce.

โ„น๏ธ We highlight data for companies that only operate foundries (fabrication plants) that manufacture chips for clients, also known as a “pure-play” foundries, as well as companies that design and manufacture their own chips, known as integrated device manufacturers. “Fabless” manufacturers that only design and don’t manufacture their own chips are not included.

Semiconductor Foundry Companies by Revenue

At the top of the list and dwarfing every other company by revenue share is TSMC which earned 60% (or nearly $17 billion) of the entire industry’s revenue in Q1 2023.

Founded in 1987, TSMC is a pure-play foundry that has become Taiwan’s largest company and manufactures products for a host of clients including Apple, NVIDIA, and AMD.

RankCompanyCountryRevenue
(Q1 2023, USD)
1TSMC๐Ÿ‡น๐Ÿ‡ผ Taiwan$16,735M
2Samsung๐Ÿ‡ฐ๐Ÿ‡ท South Korea$3,446M
3GlobalFoundries๐Ÿ‡บ๐Ÿ‡ธ US$1,841M
4UMC๐Ÿ‡น๐Ÿ‡ผ Taiwan$1,784M
5SMIC๐Ÿ‡จ๐Ÿ‡ณ China$1,462M
6HuaHong Group๐Ÿ‡จ๐Ÿ‡ณ China$845M
7Tower Semiconductor๐Ÿ‡ฎ๐Ÿ‡ฑ Israel$356M
8PSMC๐Ÿ‡น๐Ÿ‡ผ Taiwan$332M
9VIS๐Ÿ‡น๐Ÿ‡ผ Taiwan$269M
10DB Hitek๐Ÿ‡ฐ๐Ÿ‡ท South Korea$234M
Other$556M
Global Total$27,860M

Note: Revenue based on the following conversion rates: USD 1 = WON 1,276; USD 1 = NTD 30.4.

Well behind TSMC in foundry revenues is integrated device manufacturer Samsung, the biggest company in South Korea, which made $3.4 billion (12.4% of the industry’s revenue) from its semiconductor manufacturing business.

GlobalFoundries from the U.S., UMC from Taiwan and SMIC from China round out the top five, with each taking home around 6% of industry’s revenue share in Q1 2023. The former spun out from AMD’s manufacturing arm when the company went fabless in 2009.

Industry concentration is apparent in semiconductors. For example, the top 10 semiconductor foundry companies account for 98% of the entire industry’s revenue. Furthermore, 90% of the market is dominated by companies in just three Asian countries: Taiwan, South Korea, and China.

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