Who is developing the chips of the future?


Technology and Geopolitics: Jan-Peter KleinhansJulia Hess 
Data Science Unit: Pegah MahamAnna Semenova


Semiconductors are a foundational technology and indispensable for any modern society. Their application goes far beyond typical information and communication technologies such as smartphones, laptops and cloud infrastructure. Hospitals, car manufacturers and electricity companies, to name just a few, all rely on access to increasingly complex chips. The global semiconductor value chain that produces those chips has received a lot of attention from policy makers and the media. It is at the heart of the on-going US-China technology rivalry and several regions, including the European Union, try to strengthen their own semiconductor industry in an effort to become less reliant on foreign technology providers. 

But an often overlooked aspect of the semiconductor industry is the amount of research & development (R&D) necessary to advance the cutting-edge. The chips industry has one of the highest R&D margins across all industries – semiconductor companies easily spend on average more than 18% of their revenue on R&D. Furthermore, the vast majority of R&D is done by just a handful of countries and they are at the center of this analysis. 

Why focus on R&D? Recent policy initiatives in the USEurope and South Korea pay a lot of attention to semiconductor manufacturing – how best to subsidize fabrication plants (fabs) and increase domestic wafer capacity. This is understandable, not least because of skyrocketing investment costs of modern fabs. But the semiconductor industry also faces a lot of technological challenges in terms of energy efficiency, sustainability, new materials and many more. Thus R&D at all process steps is quintessential. While it might matter, from the perspective of geopolitics and geoeconomics, where chips are manufactured, it matters at least as much who develops – defines and shapes – the chips of our future. 

In a first attempt to assess the R&D power in semiconductors of different countries and regions, SNV’s Data Science Unit teamed up with the Technology and Geopolitics program to analyze paper contributions to three of the leading academic semiconductor conferences: 

  • The International Electron Devices Meeting (IEDM) covers technological innovations from semiconductor and electronic device technology to design, manufacturing, physics and modeling. International research throughout the whole semiconductor value chain is presented. IEDM started in 1955.
  • The International Solid-State Circuits Conference (ISSCC) brings together leading experts in the field of solid-state circuits and systems-on-a-chip covering scientific achievements at the different stages of the design-process of semiconductors. ISSCC started in 1954. 
  • The Symposia on VLSI Technology and Circuits (VLSI) connects two international multistakeholder-conferences on semiconductor technology and circuits with the aim to create synergies on topics of joint interest ranging from process technology to systems-on-chip. The VLSI symposia are focused on research about manufacturing and design of very-large-scale integration (VLSI) circuits. VLSI started in 1981. 

Following are some key insights from this quantitative analysis, and we invite you to explore the data yourself in the interactive charts at the end of the report. To learn more about our method, its limitations and challenges please have a look at the Frequently Asked Questions at the bottom. To learn more about SNV’s Data Science Unit feel free to reach out to Pegah Maham and if you are interested in SNV’s work on semiconductors & geopolitics you can contact Jan-Peter Kleinhans


Insight #1: For the past 25 years US and Japan developed the chips of the future