Samsung, SK Hynix accounted for 71% of DRAM sales.  Major supplier base now reduced to six.

IC Insights’ 112-page May 2Q Update to The McClean Report 2022 is now available for subscribers to download. It includes a current outlook for the 2022 global economy, detailed market, unit shipment, and ASP forecasts for IC and O-S-D products through 2026, 2021 semiconductor supplier rankings by product type, the 1Q22 top-25 semiconductor supplier ranking, an analysis of the IC market by region with additional focus on the China market, semiconductor R&D spending trends, and an overview of various government-sponsored investment programs targeting the semiconductor industry.

Over the past 30 years, the DRAM market has been characterized by periods of spectacular growth and years of devastating crashes (Figure 1).  Most recently, the DRAM market fell 37% in 2019 but soared 42% in 2021. No matter the cause—and there are many—boom-bust cycles have lowered the number of major DRAM suppliers from 20 in the mid-1990s to just six today.  The three largest suppliers—Samsung, SK Hynix, and Micron—collectively held 94% DRAM marketshare in 2021 (Figure 2).  South Korea-based Samsung and SK Hynix accounted for 71.3% of the world’s DRAM sales last year.

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New update shows Intel continues to lead research and development ranking, the top 10 raised spending 18% last year, and 21 companies invested $1 billion or more on R&D in 2021.

Research and development spending by semiconductor companies worldwide is forecast to grow 9% in 2022 to $80.5 billion after climbing by an above average 13% in 2021 to a record-high $71.4 billion, according to IC Insights’ soon-to-be-released 2Q Update to The McClean Report 2022.  Total R&D spending by semiconductor companies is expected to rise by a compound annual growth rate (CAGR) of 5.5% between 2022 and 2026 to $108.6 billion.

When the world was hit by the Covid-19 virus health crisis in 2020, wary semiconductor suppliers kept a lid on R&D spending increases even though the chip industry’s revenue grew by a surprising 11% in the year despite shutdowns of businesses and other emergency measures to slow the deadly pandemic. Semiconductor R&D spending as a percentage of worldwide industry sales slipped to a ratio of 13.1% in 2021 compared to 14.5% in 2020 and 15.1% in 2019, when research and development expenditures declined 1% and total chip market revenue fell 12%.  Figure 1 plots semiconductor R&D spending levels and the industry’s R&D/sales ratios over the past four decades and IC Insights’ forecast through 2026.

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