The R&D World Index (RDWI) for the week ending February 23, 2024, closed at 3,620.48 for the 25 companies in the RDWI. The Index was up 1.06% (or 37.82 basis points). Twenty-one RDWI members gained value last week from 0.12% (Apple) to 5.61% (Sanofi SA). Four RDWI members lost value this past week from -1.02% (IBM) to -1.60% (Eli Lilly & Co.).
It was reported last week that RDW Index member Johnson & Johnson (JNJ), New Brunswick, New Jersey, will be closing its San Francisco Bay Campus (SFBC) in Brisbane, California. The 200,000 ft2 SFBC, which opened in September 2022, more than doubled the company’s R&D footprint in the Bay Area at the time with the plan to hire up to 400 researchers for the campus. The focus of the campus was emerging gene and RNA-based therapies, along with research on retinal and infectious diseases. JNJ’s focus on infectious diseases and the rebranding of its consumer health unit were both cut in 2021. The company stated it will “continue to have a significant footprint in California across its pharma and medtech units, plus the establishment of a new California Innovation Center.” No mention was made of the number of researchers affected by the SFBC closure.
Continental AG, Hanover, Germany, announced last week that it will reduce the R&D staffing in its automotive group sector by 1,750 jobs by the end of 2025. This is part of a wider business restructuring in this division. The company also plans to reduce the share of expenditures on R&D in the sector by 9% by 2028. However, its spending in this area will increase in line with its expected sales growth. The company warned in late 2023 that it would cut thousands of jobs in the automotive division worldwide as part of its plan to save more than $400 million annually from 2025.
RDW Index member Intel, Santa Clara, California, announced last week that it has added Microsoft, Redmond, Washington, as a customer for its contract chip-making arm that it created three years ago. Microsoft is designing chips to be made in one of Intel’s most advanced factories. Neither company stated what kind of chip they were talking about, Microsoft has sought to bolster its chip design capabilities, including devices for AI calculations, unveiled in 2023. While Intel lags far behind Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung in contract manufacturing, it has set an internal goal of becoming the second-largest contract chip maker by 2030.
RDW Index member Google/Alphabet, Mountain View, California, announced last week that it suspended the ability of its flagship chatbot, Gemini, to generate images of people. This action follows the online backlash surrounding the tool’s treatment of race and ethnicity. The company will pause this feature as it addresses recent issues with “inaccuracies in some historical depictions.” The company did not disclose how long this suspension might last. The decision came as users flooded the social network X with examples of Gemini responses they viewed as historically inaccurate or biased against white people. The pause highlights the balancing act of moderating AI programs that can generate novel text and images with tools that technology leaders have promoted.
Chip maker Nvidia, Santa Clara, California, announced last week that its fourth-quarter sales for 2023 more than tripled the similar period in 2022. The increase is attributed to the company’s attempt to meet demand for its chips that power new AI systems. The company said it expects to see similar growth in the current and next quarter’s figures. The company has grown from a primary videogame supplier in 18 to the current center point of the AI boom. This growth came about as researchers exploited the graphical capabilities of those initial Nvidia chips to become able to perform many mathematical calculations simultaneously. The company continues to work with U.S. regulators to create lower-performing chips that can be exported to restricted countries like China.
BASF, a chemical maker in Ludwigshafen, Germany, announced last week that it will cut more jobs to reduce costs and save a little more than $1 billion annually by the end of 2026. The company added that it expects its economic weakness seen in 2023 will continue into 2024. Exact job cuts and the reduction of the company’s overall R&D staff and budgets were not disclosed.
U.S. oil producers such as Fasken Oil & Ranch, Midland, Texas, and others, were noted last week as fighting plans to shuttle radioactive waste from nuclear power plants around the U.S. and temporarily park it in the Permian Basin, the U.S.’s busiest oil field. A radioactive incident in this oil field would devastate U.S. energy and the local economy. Holtec International, Camden, New Jersey, has contracts to rail ship thousands of canisters of spent nuclear fuel to Lea County, New Mexico, and store the containers below ground. The site has a 40-year license and could hold about 170,000 metric tons of used fuel. This would be the largest such facility in the world. Protesting organizations cited concerns about derailed waste-carrying trains and terrorist attacks, among other areas.
R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2020 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies), and ICT (9 companies) that invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spending in the world by government, industries, and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ, NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.
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