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Silicon Foundry TSMC Remains Taiwan's No.1 R&D Spender in 2014

2015/04/29 | By Ken Liu

Taiwan Semiconductor Manufacturing Co. (TSMC), recognized as the world's No.1 pure silicon foundry, again was Taiwan's No.1 R&D spender last year with such outlay totaling NT$56.8 billion (US$1.83 billion), according to the Ministry of Economic Affairs (MOEA).

Throughout last year, the island's listed companies, whether on the main board or over-the-counter market, spent a total of NT$546.4 billion (US$17.62 billion) on R&D, increasing 10.3 percent from 2013.

Of the total, NT$267.3 billion (US$8.62 billion) came from the island's electronic-components industry, rising 15.5 percent year on year; followed by NT$184.3 billion (US$5.94 billion) from local computer, electronics and optoelectronics sector, whose expenditures together accounted for 82.7 percent of the 2014 total.

Taiwan Stock Exchange Corp.'s data show that in 2014, the island's listed manufacturers altogether generated NT$23.42 trillion (US$755.69 billion) in revenue, increasing 5.1 percent year on year to hit an all-time high. They made a total of NT$1.25 trillion (US$40.33 billion) in after-tax net income, adding 26.4 percent from the previous year to also mark a new high for growth at an annual double-digit rate for two consecutive years. Their net margin ratio was 5.3 percent, a gain of 0.9 of a percentage point from 2013. The margin ratio grew to 12 percent last year from 2013's 8 percent across the island's electronic-components sector, mostly generated by the semiconductor and liquid-crystal display industries.

MOEA officials say last year the top-five R&D spenders of Taiwan's manufacturing industry were sequentially TSMC, Hon Hai Precision Industry Co., Ltd., MediaTek Inc., United Microelectronics Corp. (UMC), and Wistron Corp., and that TSMC's 2014 outlay represented an 18.1 percent year on year increase and Hon Hai's NT$48.9 billion (US$1.57 billion) represented a 4 percent increase.

MediaTek's 2014 R&D spending totaled NT$43.3 billion (US$1.39 billion), soaring 63.8 percent from the previous year due chiefly to its development of the Long Term Evolution (LTD) wireless chip plus its 2013 acquisition of MStar Semiconductor Inc.

R&D expenditure accounted for 20.3 percent of MediaTek's 2014 revenue, the highest percentage of revenue among the top-five R&D spenders.

UMC, reportedly the world's No.2 pure silicon foundry, spent NT$13.7 billion (US$441.93 million) on R&D last year, leaping to the fourth place from the sixth on the top-five list. Wistron came next with NT$13.4 billion (US$432.25 million).

MOEA officials say R&D spending constituted 2.3 percent of the total revenue generated by the island's listed manufacturers overall last year, inching up 0.1 of a percentage point from a year earlier to rise for the fourth year. The spending comprised 5.2 percent of 2014 revenue by the local electronic-component industrial sector, rising 0.3 of a percentage point year on year to exceed the 5-percent milestone the first time.