What types of industry positions favor PhD over a masters?

I'm coming from a biomedical engineering background, and I'm noticing that almost all job postings ask for either an MS or a PhD, and from speaking with my friends with masters it seems that masters are often favored, because they demand less pay. In fact, the only positions that specifically seek out PhDs seem to be research positions in industry.

Based on that, I'm curious to see if this exists beyond just engineering. Are there any non-research industry positions that actively seek to hire PhDs over masters students?

Answer

High-tech engineering companies, for one. A friend of mine works at a small system-on-a-chip designer company, and they supply highly specialized chip designs to other businesses which utilize embedded systems -- think leading automotive, aerospace, consumer electronics OEMs. The company is small and every engineering employee has at least a MSc, most of them have PhDs or higher (that would be associate professors and professors).

Another example is automotive R&D -- mechanical engineering. Companies are financing new development of new methodologies in product development -- particularly structural optimization, design automation, manufacturing process simulations. Virtual prototyping is the name of the game for top manufacturers currently, and the demand for highly-skilled experts is great, even in these uncertain economic times.

In the country where I study, PhD projects are financed jointly by interested private companies as well as research organizations, and the companies have a vested interest to receive not only the direct results from the research, but also trained individuals that can integrate the research outcomes into their product development or manufacturing process.

Obviously YMMV by country and research field. PhDs in in mostly theoretical projects might have harder time finding a good position after graduating, while hands-on graduates whose projects were conducted in collaboration with industrial partners are much more likely to secure a senior technical position even before their dissertation.