TSMC vs Intel: R&D Spending, Growth, and Ratio

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This article examines the research and development (R&D) spending of TSMC and Intel Corporation.

TSMC operates as a pure-play foundry, meaning it manufactures semiconductors for other companies. Notably, TSMC produces chips for clients such as Apple, AMD, and Nvidia. Unlike some of its competitors, TSMC does not design its own chips, focusing instead on the manufacturing process to ensure the highest quality for its customers.

On the other hand, Intel is an integrated device manufacturer (IDM), which means it designs, manufactures, and sells its own chips. In recent years, Intel has also expanded its foundry services to produce chips for other companies under its IDM 2.0 strategy, broadening its operational scope.

Despite their different business models, both TSMC and Intel heavily invest in research and development to advance chip technology. Their R&D efforts include the adoption of cutting-edge processes such as extreme ultraviolet (EUV) lithography, pushing the boundaries of semiconductor manufacturing.

In this article, we delve into the R&D expenditures of both firms, comparing how each company allocates resources to maintain its technological edge and leadership in the semiconductor industry.

Investors looking for key statistics of TSMC and Intel may find more resources on these pages:

TSMC

• TSMC revenue by product category: wafer sales and others,
• TSMC revenue by region: North America, Asia Pacific, EMEA, China, and Japan,
• TSMC vs Intel profit margin,
• TSMC revenue by process node: 3nm, 5nm, 7nm, 10nm and more,

Intel

• Intel largest customers by revenue: Dell, Lenovo, and HP,
• Intel financial health: debt due vs liquidity,
• Intel revenue by country and region: U.S., China, Singapore, and Taiwan,
• Intel foundry revenue and profit margin,

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Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

R&D To Revenue Ratio: The R&D to revenue ratio is a financial metric measuring the proportion of a company’s revenue that is spent on research and development (R&D).

It is calculated by dividing the total R&D expenditures by the total revenue, usually expressed as a percentage. This ratio helps investors and analysts understand how much a company is investing in innovation and future growth relative to its sales.

The formula for the R&D to revenue ratio is:

\[\text{R&D to Revenue Ratio} = \left( \frac{\text{R&D Expenditures}}{\text{Total Revenue}} \right) \times 100\%\]

A higher R&D to revenue ratio indicates a stronger commitment to innovation and development, which can be crucial for long-term growth and competitiveness.

R&D To Gross Profit Ratio: The R&D to gross profit ratio is a financial metric measuring the proportion of a company’s gross profit that is spent on research and development (R&D).

This ratio helps investors and analysts evaluate how much of a company’s gross profit is being reinvested into innovation and future growth.

The formula for the R&D to gross profit ratio is:

\[\text{R&D to Gross Profit Ratio} = \left( \frac{\text{R&D Expenditures}}{\text{Gross Profit}} \right) \times 100\%\]

A higher R&D to gross profit ratio indicates a greater investment in innovation relative to the company’s profitability, which can be a sign of a commitment to long-term growth and competitiveness.

R&D To Operating Expenses Ratio: The R&D to operating expenses ratio is a financial metric measuring the proportion of a company’s operating expenses that are spent on research and development (R&D).

This ratio helps evaluate how much of the company’s total expenses are dedicated to innovation and future growth efforts.

The formula for the R&D to operating expenses ratio is:

\[\text{R&D to Operating Expenses Ratio} = \left( \frac{\text{R&D Expenditures}}{\text{Total Operating Expenses}} \right) \times 100\%\]

A higher R&D to operating expenses ratio indicates a greater commitment to innovation relative to the company’s overall spending, which can be a positive indicator of future growth potential. Comparing this ratio with industry peers can provide additional insights into a company’s investment in research and development.

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Who Is Winning The R&D Race?

While both TSMC and Intel invest heavily in research and development, Intel’s R&D spending is significantly higher in absolute terms. In 2025, Intel’s R&D expenditure was twice as much as that of TSMC. However, TSMC’s focused approach on manufacturing excellence and advanced technology development has allowed it to maintain a competitive edge in the semiconductor industry.

Intel’s broader scope of R&D investments across various technologies and product categories reflects its integrated device manufacturer (IDM) model. Despite the higher R&D spending, Intel has faced challenges in advancing its manufacturing processes, while TSMC has been more consistent in adopting cutting-edge technologies like extreme ultraviolet (EUV) lithography.

In summary, Intel leads in terms of absolute R&D spending, but TSMC’s focused and efficient R&D investments have enabled it to maintain its leadership in semiconductor manufacturing.

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Insight & Summary of TSMC and Intel’s R&D Comparison

The following analysis consolidates the trends observed across TSMC and Intel in R&D comparison, consisting of R&D spending, growth, and several ratios for the 2018–2025 period.

• R&D Spending & Growth — In absolute terms, Intel has consistently outspent TSMC on R&D throughout the period. Intel’s R&D budget peaked at $17.5B in 2022 before pulling back to $13.8B in 2025 — a level last seen in 2018 — reflecting a combination of cost restructuring and strategic prioritization under its turnaround plan. TSMC, by contrast, has grown its R&D spend steadily from $2.8B in 2018 to $7.9B in 2025, a 2.8x increase, with a 3-year average growth rate of 14.1%. Intel’s 3-year average growth is -7.4%, making TSMC the clear aggressor on R&D investment momentum. The gap is narrowing: Intel spent roughly 4.8x TSMC’s R&D in 2018; by 2025, that multiple has compressed to 1.75x.

• R&D to Revenue — This ratio tells a fundamentally different story. Intel allocates a disproportionately large share of revenue to R&D — averaging 29.0% over the last three years versus TSMC’s 7.3%. Intel’s ratio has escalated sharply from 19.1% in 2018 to 31.2% in 2024, driven primarily by revenue contraction rather than spending growth, a warning sign for efficiency. TSMC’s ratio has been remarkably stable and even declining, from 8.5% in 2019 to 6.5% in 2025, reflecting revenue growth that consistently outpaces R&D reinvestment.

• R&D to Gross Profit — The contrast here is stark and arguably the most telling metric. TSMC’s R&D-to-gross-profit ratio has compressed from 17.3% in 2018 to 10.8% in 2025 (3-year average: 13.0%), a sign that its gross profit expansion is absorbing R&D costs with increasing efficiency. Intel’s ratio has exploded — from 31.0% in 2018 to a peak of 95.4% in 2024 (3-year average: 81.4%) — meaning Intel is committing nearly its entire gross profit to R&D. At 95.4% in 2024, Intel is in structurally unsustainable territory, reflecting both a gross margin collapse (from 61.7% in 2018 to 32.7% in 2024) and continued heavy R&D obligations.

• R&D to OpEx — Both companies deploy R&D as the dominant component of their operating expense base, with TSMC averaging 70.3% and Intel 66.0% over the last three years. Unlike the other ratios, this one is relatively comparable between the two companies, suggesting that for both, R&D is the primary lever within discretionary operating costs. The modest divergence — TSMC slightly higher — is somewhat counterintuitive given Intel’s IDM model but reflects TSMC’s lean non-R&D OpEx structure.

• Structural takeaway: TSMC and Intel represent two contrasting R&D postures. TSMC is a capital-efficient, growth-oriented R&D investor — spending less in absolute terms but generating far greater gross profit per dollar of R&D. Intel is in a high-intensity, low-efficiency phase where R&D is absorbing the bulk of its shrinking gross profit, and returns on that investment are not yet visible in revenue or margin recovery. For investors, TSMC’s trajectory signals disciplined reinvestment; Intel’s signals a company in transformation, where R&D productivity will be the critical variable to watch.

The table below combines all key Research and Development metrics into a single view for the latest three fiscal years.

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TSMC vs Intel: R&D Spending & Growth

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TSMC vs Intel: R&D To Revenue Ratio

You can find the definition of the R&D to revenue ratio here: R&D To Revenue Ratio.

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TSMC vs Intel: R&D To Gross Profit Ratio

You can find the definition of the R&D to gross profit ratio here: R&D To Gross Profit Ratio.

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TSMC vs Intel: R&D To Operating Expenses (OpEx) Ratio

You can find the definition of the R&D to OPEX ratio here: R&D To Operating Expenses Ratio.

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References and Credits

1. All financial figures presented in this article were obtained and referenced from TSMC’s annual reports published on the company’s investors relations page: TSMC Investor Relations.

2. Pexels Images.

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Disclosure

We may utilize the assistance of artificial intelligence (AI) tools to produce some of the text in this article. However, the data is directly obtained from original sources (usually the company’s quarterly and annual reports) and meticulously cross-checked by our editors multiple times to ensure its accuracy and reliability.

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