2023 Trends and Insights

Samsung Still the One For Second Year Running; Qualcomm Moves Into Second Place

U.S. patent awards in 2022 revealed a big shift in company leadership: IBM, after 29 years of topping IFI’s list of most U.S. patents granted, dropped to second place, behind Samsung, the South Korean electronics company. In 2023, IBM drops down again—to fourth place, behind Samsung, which held its top billing with 6,165 patents, San Diego-based wireless technology corporation Qualcomm (3,854 patents), which moved up five places from the preceding year, and TSMC (3,687 patents), in third place. Other companies with big moves upward were virtualization technology company VMWare (recently acquired by Broadcom), up 63 places in rank, instant messaging service Snap, up 34, and banking giant Capital One, up 21. Over the past five years, the top areas of specialization for VMWare have focused on technologies around virtual machine monitors and network access, in addition to distribution in those machines. Snap’s patents have concentrated on mixed reality and multimedia content for user messaging during the same time period.

The Magnificent….Four?

When considering the stock market performance in 2023, the dominant story of the year was the breathtaking rise of The Magnificent Seven technology companies—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Of the 24% gain for the S&P 500 in 2023, those few companies delivered nearly all of it. At the high end of returns, Nvidia rose more than 230% during the year. At the low end, Apple returned just under 50%. As such, that small collection of companies now contribute some 30% of the market cap for the entire index.

All seven of these companies have a reputation for innovation. But if we’re measuring innovation by U.S. patent grants, how did these seven superstars fare in 2023? On IFI’s Top 50, based on U.S. patent assignees, just four of the Magnificent Seven made the cut. Apple came in first with 2,536 patents, followed by Google (1,837), Microsoft (1,820), and Amazon (1,591). Nvidia, which boasted the biggest stock return thanks to generative AI boosting its chip demand, had fewer than 400 patents assigned to it in the U.S. last year.

Patents Settle Down

It’s been four years since U.S. patent grants hit an all-time high—a level that coincides with the start of the global pandemic. Since then, the grant trend has descended incrementally every year. Grants slumped to 312,095 in 2023, from 322,966 in 2022, a 3.4% decline. That’s on top of a 1.3% tick downward the previous year. It’s not to say, however, that companies are losing their inventive aspirations. Patent applications, the best indicator for what technology companies are chasing currently, are up just slightly from last year to an all-time high of 418,111.

Country Leaderboard

Of the U.S. patents granted in 2023, U.S.-based entities won a little less than half of the grants (they do have some home-turf advantage, after all). Japan garnered the second highest number of patents, with 12.5% of the total pie. South Korea, meanwhile, collected enough grants to take back third place from China, which had overtaken South Korea the previous year. Among European countries, Germany won the highest number of U.S. grants with 12,517 patents and ranks fifth overall.

Patents Wax and Wane

Simple rankings are important. But so are comparisons to previous years. Last year, the U.S. was losing some ground in patent grants, while China and South Korea were gaining. This year, the tables have turned. The share of grants to U.S.-based companies has risen in 2023, while every other country in the top ten, except Canada (up 5%) and Taiwan (up 3.8%), has decreased its share. Japan is down 15.6% this year. Compared to 2022, South Korea, China, and Germany have lost 0.2%, 12.5%, and 15% of the divide, respectively.

Patents, Across Continents

Across the globe, North America accumulated the most patents in 2023, with a total of 155,034, a 4.3% increase from its 2022 level. Asia, brought in 102,239 patents in 2023, down from the preceding year’s record of 112,698. Europe, with 42,469 patents last year, also dropped from the prior year.

Classified Patent Information

When counting the sheer number of CPC codes used throughout the year in granted patents, G06F (electrical digital data processing) and H04L (transmission of digital information) ranked first and second in 2023—a repeat performance of the previous year. Use of the code G06F increased by 3%, while H04L decreased by the same amount. Technologies that grew the most in 2023 were Y02E (reduction of greenhouse gas emissions) and Y02P (climate change mitigation technologies); each class expanded at a 21% clip. The biggest decliners among top patented technologies? H01L (semiconductor devices) came down 14% and A61P (therapeutic activity of chemical compounds) shrunk 12%.

Patent Technology Proxy

As for current technological pursuits, patent applications provide a better proxy statement for where the market is heading because the information is much more recent. As with grants above, G06F and H04L have the most applications in 2023, but the growth trend for the latter class is curving downward. Greenhouse gas code Y02E is far and away the fastest grower over the past year, bursting forth with an eye-popping 48% in new applications. H01M, the technology behind batteries for the conversion of chemical energy into electrical energy, has also flourished in the last year with a strong advance of 20%. Of the 20 top-cited codes last year, 13 of them either decreased (or remained flat) from the preceding year.