Transcript Slide 1

Trends in R&D Investments
Global ICT Companies
2007 to 2011
Alain Stekke
DG INFSO Economic and Statistical Unit
Georg Kelm
DG INFSO Nanoelectronics Unit
R&D Data
• 2010 Digital Competitiveness Report
– Eurostat BERD + Predict Report (IPTS) + EU
KLEMS
• 2011 Digital Agenda Scoreboard
– No new Eurostat and EU KLEMS data
=>
R&D expenses as reported by
companies in their quarterly and annual
reports
Firm level analysis
"Nations do not trade; it is firms that trade. This simple truth makes it
clear that understanding the firm-level facts is essential to good
policy making in Europe."
The happy few: the internationalisation of European firms. New facts based on firm-level
evidence, Thierry Mayer and Gianmarco I.P. Ottaviano,
"Geography matters for R&D" given the strong link between R&D
and growth driven by ‘knowledge spillovers’ between firms located
close to each other
Why geography matters for R&D, John Van Reenen
The European Union’s business research and development deficit
relative to the United States can be almost entirely accounted for by
the EU having fewer young leading innovators"
Europe's missing yollies, Reinhilde Veugelers and Michele Cincera
EU Sample - Net Sales
100%
Siemens (Healthcare)
Philips
Autonomy
Atos
Software AG
Dasault Systemes
Sage
Wincor Nixdorf
Amdocs
Indra
Logica
Cap Gemini
SAP
ARM
ASML
NXP
Infineon
STM
Nokia
Alcatel Lucent
Ericsson
80%
60%
40%
20%
11
Q
4/
11
Q
3/
11
Q
2/
11
Q
1/
10
Q
4/
10
Q
3/
10
Q
2/
10
Q
1/
09
Q
4/
09
Q
3/
09
Q
2/
09
Q
1/
08
Q
4/
08
Q
3/
08
Q
2/
08
Q
1/
07
Q
4/
07
Q
3/
07
Q
2/
Q
1/
07
0%
€28bn
€27bn
Impact of the economic crises
Post Lehman Brother bankruptcy recession
Q4/2008 & Q1/2009 Panic
Net sales ($m)
35000
30000
ASML
Applied Materials
UMC
TSMC
NXP
Infineon
STM
Freescale
National Semiconductor
TI
AMD
Intel
25000
20000
15000
10000
5000
0
Q1/07
Q2/07
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
Q1/09
Net sales ($m)
40000
35000
30000
ASML
Applied Materials
UMC
TSMC
NXP
Infineon
STM
Freescale
National Semiconductor
TI
AMD
Intel
25000
20000
15000
10000
5000
11
4/
11
Q
Q
3/
11
2/
11
Q
Q
1/
10
4/
10
Q
Q
3/
10
Q
2/
10
1/
09
Q
Q
4/
09
3/
09
Q
Q
2/
09
1/
08
Q
Q
4/
08
3/
08
Q
Q
2/
08
Q
1/
07
4/
07
Q
Q
3/
07
2/
Q
Q
1/
07
0
EU ICT Sample - Net Sales (Revenue) in $m
90000
Siemens (Healthcare)
Philips
Autonomy
Atos
Software AG
Dasault Systemes
Sage
Wincor Nixdorf
Amdocs
Indra
Logica
Cap Gemini
SAP
ARM
ASML
NXP
Infineon
STM
Nokia
Alcatel Lucent
Ericsson
80000
70000
2%
60000
50000
40000
30000
20000
10000
4/
11
Q
3/
11
Q
2/
11
Q
1/
11
Q
4/
10
Q
3/
10
Q
2/
10
Q
1/
10
Q
4/
09
Q
3/
09
Q
2/
09
Q
1/
09
Q
4/
08
Q
3/
08
Q
2/
08
Q
1/
08
Q
4/
07
Q
3/
07
Q
2/
07
Q
Q
1/
07
0
EU ICT Sample - R&D in $m
9000
8000
Wincor
Software AG
Amdocs
Autonomy
Dassault
SAP
Philips
ARM
ASML
NXP
Infineon
STM
Nokia
Alcatel Lucent
Ericsson
7000
6000
5000
4000
3000
2000
1000
11
Q
4/
11
Q
3/
11
Q
2/
11
Q
1/
10
Q
4/
10
Q
3/
10
Q
2/
10
Q
1/
09
Q
4/
09
Q
3/
09
Q
2/
09
Q
1/
08
Q
4/
08
Q
3/
08
Q
2/
08
Q
1/
07
Q
4/
07
Q
3/
07
2/
Q
Q
1/
07
0
R&D is pro-cyclical
90000
9000
80000
8000
70000
7000
60000
6000
50000
5000
R&D
Net sales
EU sample - Revenue and R&D in $m
40000
4000
30000
3000
20000
2000
10000
1000
0
0
Q1/07
Q2/07
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
Q1/09
Q2/09
Q3/09
Q4/09
Q1/10
Q2/10
Q3/10
Q4/10
Q1/11
Q2/11
Net sales
R&D
EU ICT Sample - R&D Intensity (% sales)
14
12
10
8
6
4
2
0
Q1/07
Q2/07
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
Q1/09
Q2/09
Q3/09
Q4/09
Q1/10
Q2/10
Q3/10
Q4/10
Q1/11
Q2/11
US Sample - Net Sales in $m
100%
Yahoo
Amazon
Google
eBay
CSC
EMC
Oracle
Microsoft
Dell
HP
IBM
Qualcomm
Freescale
Appled Materials
Texas
AMD
National Semiconductor
Intel
Broadcom
Apple
RIM
Motorola (Devices)
Juniper
Cisco
80%
60%
40%
20%
0%
Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11
US ICT Sample Net Sales in $m
250000
46%
200000
150000
100000
50000
11
Q
2/
11
Q
1/
10
Q
4/
10
Q
3/
10
Q
2/
10
Q
1/
09
Q
4/
09
Q
3/
09
Q
2/
09
Q
1/
08
Q
4/
08
Q
3/
08
Q
2/
08
Q
1/
07
Q
4/
07
Q
3/
07
2/
Q
Q
1/
07
0
Yahoo
Amazon
Google
eBay
CSC
EMC
Oracle
Microsoft
Dell
HP
IBM
Qualcomm
Freescale
Appled Materials
Texas
AMD
National Semiconductor
Intel
Broadcom
Apple
RIM
Motorola (Devices)
Juniper
Cisco
US sample - R&D spending ($m)
18000
40%
Yahoo
Amazon
Google
eBay
Oracle
Microsoft
Dell
HP
IBM
Qualcomm
Freescale
Applied Materials
Texas
AMD
National Semiconductor
Intel
Broadcom
Apple
RIM
Juniper
Cisco
16000
14000
12000
10000
8000
6000
4000
2000
11
4/
11
Q
Q
3/
11
2/
11
Q
Q
1/
10
4/
10
Q
Q
3/
10
Q
2/
10
1/
09
Q
Q
4/
09
3/
09
Q
Q
2/
09
1/
08
Q
Q
4/
08
3/
08
Q
Q
2/
08
Q
1/
07
4/
07
Q
Q
3/
07
2/
Q
Q
1/
07
0
US sample net sales ($m)
250000
Yahoo
Amazon
Google
eBay
CSC
EMC
Oracle
Microsoft
Dell
HP
IBM
Qualcomm
Freescale
Appled Materials
Texas
AMD
National Semiconductor
Intel
Broadcom
Apple
RIM
Motorola (Devices)
Juniper
Cisco
200000
Internet Platforms
150000
100000
50000
Apple
0
Q1/07
Q2/11
2007 – 2011 is about innovation
Global Internet platforms / Social networks /
Smartphones / Tablets / Cloud computing / LTE and
Fiber
– Demand for 24/7 internet connectivity
– Mobility
– Software “Renaissance” (apps)
– More e-content (publishing)
Industry shake up
semiconductors, telecom equipment & devices, software and
publishing industry, telecom operators etc.
Policy digital agenda
Net neutrality, broadband deployment, cloud computing
regulation, privacy,
2007 – 2011 is about innovation
• Innovations of a magnitude (probably) never
experienced before
• Truly disruptive
–
–
–
–
Big winners (and losers)
Bankruptcies/ Exits / Entries / Acquisitions
Goodwill and intangible asset impairments
Wave of patent litigation & gold rush for patents
• Very different from an economic downturn
– Where you go down and up together
US versus EU
• US
– Extending the ICT universe
• Devices + content + platform
– Re-integrating software and hardware
• Oracle/Sun, HP/EDS, Dell/Perot
• EU
– Technological leadership
– Silicon driven
– Extending outside rather inside ICT
The European Semiconductor Industry – Application
Driven
Largest market shares in application fields as:
Automotive, Industrial, Security, Communication, Medical
Silicon Technologies used to fabricate such devices:
- From 0,32µm down to 40 nm CMOS, both bulk CMOS and FD SOI
- From 0,16 µm Smart power to IGBT high power devices
- From 77 GHz BiCMOS RF to
- CMOS cameras (65 nm CMOS) and to MEMS based sensors
Both large IC makers as STM, Infineon, NXP and GlobalFoundries as well as
smaller European foundries as X-fab, L-foundry or Elmos are competitive in
the market place with high volume production or specialised products for
niche markets respectively.
Value chain:
It is important to note that the critical elements of the supply chain are still
present in Europe; special strenghts in Lithography, Metrology and
Materials.
European S/C Component Suppliers in Global Context
A
Courtesy STM
EU IC suppliers are competitive !!!
Leading edge NanoE and PowerE
Technology for your Car
Courtesy STM
Advanced nanoE components down to 40 nm CMOS processors
Reduction of cost / transistor by factor of 1 million over past 40 years
Source: IC-Insights, 01/2008
The other side of “Moore’s Law”
TSMC
Globalfoundries
STMicroelectronics ?
?
Intel
Samsung
22/20 nm
after IHS iSuppli 2011
?
16/14 nm
?
12/11 nm
Outlook
The global technology race does not stop.
There is visibility for another decade of ever
smaller features (3nm!), larger Si wafers (450
mm), both boosting functionality &
performance and keeping cost per function low.
In the long run Europe cannot afford to be out of
this race as the system know-how is more and
more integrated in the chip
Outlook
The global technology race does not stop.
There is visibility for another decade of ever
smaller features (3nm!), larger Si wafers (450
mm), both boosting functionality &
performance and keeping cost per function low.
In the long run Europe cannot afford to be out of
this race as the system know-how is more and
more integrated in the chip