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% 80% 60% 40% 20% 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 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 Q3/11 Q4/11
28bn 27bn
Impact of the economic crises Post Lehman Brother bankruptcy recession
Q4/2008 & Q1/2009 Panic
Net sales ($m) 35000 30000 25000 20000 15000 10000 ASML Applied Materials UMC TSMC NXP Infineon STM Freescale National Semiconductor TI AMD Intel 5000 0 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09
40000 35000 30000 25000 20000 15000 10000 5000 0 Net sales ($m) ASML Applied Materials UMC TSMC NXP Infineon STM Freescale National Semiconductor TI AMD Intel Q3/11 Q4/11 Q2/11 Q1/11 Q4/10 Q3/10 Q3/09 Q4/09 Q1/10 Q2/10 Q2/09 Q1/09 Q4/08 Q3/08 Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07
EU ICT Sample - Net Sales (Revenue) in $m 90000 80000 70000 60000 50000 40000 30000 20000 10000 2% 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 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 Q3/11 Q4/11
9000 8000 7000 6000 5000 4000 3000 2000 1000 0 EU ICT Sample - R&D in $m Wincor Software AG Amdocs Autonomy Dassault SAP Philips ARM ASML NXP Infineon STM Nokia Alcatel Lucent Ericsson Q3/11 Q4/11 Q2/11 Q1/11 Q4/10 Q3/10 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q4/08 Q3/08 Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07
R&D is pro-cyclical EU sample - Revenue and R&D in $m 90000 9000 80000 8000 70000 7000 60000 6000 Net sales 50000 40000 5000 4000 R&D Net sales R&D 30000 3000 20000 2000 10000 1000 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 0
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% 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 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 ICT Sample Net Sales in $m 250000 200000 150000 100000 50000 0 46% Yahoo Amazon Google ebay CSC EMC Oracle Microsoft Dell HP IBM Qualcomm Freescale Appled Materials Texas AMD National Semiconductor Intel Broadcom Apple RIM Motorola (Devices) Juniper Cisco Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11
US sample - R&D spending ($m) 18000 16000 14000 12000 10000 8000 6000 4000 2000 40% Yahoo Amazon Google ebay Oracle Microsoft Dell HP IBM Qualcomm Freescale Applied Materials Texas AMD National Semiconductor Intel Broadcom Apple RIM Juniper Cisco 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 Q3/11 Q4/11
US sample net sales ($m) 250000 200000 150000 100000 50000 0 Internet Platforms Apple Q1/07 Q2/11 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
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???? 16/14 nm 12/11 nm after IHS isuppli 2011
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