The R&D World Index (RDWI) for the week ending February 24, 2023, closed at 2,373.81 for the 25 companies in the RDWI. The Index was down -4.47% (or -70.18 basis points) from the week ending February 17, 2023. Six of the 25 RDWI members gained value during the past week from 0.06% (Sanofi SA) to 1.62% (Stellantis NV). Nineteen of the 25 RDWI members lost value last week from -1.34% (Bristol-Myers Squibb) to -11.01% (Alibaba).
Last week, the U.S. Department of Commerce (DOC) announced that funds from the $53 billion Chips Act passed in August 2022 would be used to create at least two manufacturing clusters in the U.S. for designing and developing leading-edge semiconductors by 2030. About $39 billion in government funding would be dedicated to manufacturing plants and processes, while the remaining $13.2 billion would go to R&D and workforce training. The DOC’s lofty goals are to have the U.S. be the only country in the world where every company capable of producing these chips will have significant R&D and a high-volume manufacturing presence in the U.S. Specific details will be announced by the DOC this week. Arizona, Ohio, and Texas are likely to be named as locations based on previous announcements to build U.S. facilities by Intel Corp., Santa Clara, California, Samsung Electronics, Seoul, South Korea, and Taiwan Semiconductor Manufacturing Co., Taipei, Taiwan.
United Airlines Holdings Inc., Chicago, announced last week that it is launching a fund backed by several large aerospace firms, including Air Canada, Boeing, JPMorgan Chase & Co., Honeywell International, and General Electric Co. The fund will invest in startups targeting the development of sustainable aviation fuel to lower emissions from air travel. The fund will start with more than $100 million from United and its partners and will be capped at $500 million. United, Air Canada and other airlines that participate are expected to sign clean-fuel supply agreements with the startups they back and could share in the carbon credits tied to the sustainable fuel. The fund is expected to benefit from the recent climate law (Inflation Reduction Act), which offers tax credits for the sustainable fuel.
ChatGPT (generative pre-trained transformer) is an artificial intelligence (AI) chatbox developed by OpenAI, San Francisco. It was launched as a prototype on November 30, 2022. Microsoft has provided OpenAI with an investment of more than $11 billion. ChatGPT has been very successful due to its detailed responses and articulate answers across many domains. Microsoft has added ChatGPT to its Bing search tool. The success of ChatGPT has led numerous search software developers to mimic it, especially in China. China’s search engine owner Baidu Inc., its e-commerce giant (and RDW Index member) Alibaba Group Holding, and its social media conglomerate Tencent Holdings have all this year announced investments to develop their own equivalent to the AI chatbox. Microsoft also announced last week that it had upgraded its Bing search tool with the ChatGPT AI upgrade for Apple and Android platforms. In response to the recent ChatGPT news Google announced last week that it had opened its rival AI-powered tool, Bard, for testing.
Last week, Computer vision chip maker Nvidia Corp., Santa Clara, California, announced a drop in its quarterly profit by 21% and noted that the ChatGPT AI language-generation tools will be a boon to their future business. Advanced Nvidia chips can be used to generate AI systems, according to UBS analysts. UBS estimates that the ChatGPT being used by Microsoft requires about 10,000 of Nvidia’s graphics chips. Nvidia has about an 80% share of the microprocessors used in AI applications, according to an Omdia estimate. Nvidia also noted that it is launching a new cloud services business to tap into the growing AI business. Nvdia is a major supplier to Microsoft and Alphabet/Google (two of the largest in this sector) search businesses. The overall AI chip market is expected to become a $20 billion/year business by 2027 with Nvidia expected to maintain a long-term 65% market share, according to a Bank of America analyst.
Moderna, Cambridge, Massachusetts, developer of one of the first COVID-19 vaccines widely available in the U.S., announced last week that it will collaborate with Life Edit Therapeutics Inc., Morrisville, North Carolina, under an agreement to discover and develop mRNA gene-editing therapies. The collaboration will apply Life Edit’s collection of new technologies for gene editing with the Moderna mRNA platform that was behind the COVID-19 vaccine. Moderna will fund the research and clinical studies and assume responsibility for manufacturing and commercialization.
Semiconductor chip maker Ulvac Inc., Kanagawa, Japan, announced last week that it will build a new technology R&D facility in Pyeongtaek. South Korea. Groundbreaking is scheduled for March 2023 with construction complete in March 2024. The new facility is primarily to satisfy demand from client Samsung Electronics. Ulvac follows 2022 investments in South Korea by semiconductor equipment manufacturers Tokyo Electron, ASML, Lam Research, and Applied Materials, all in response to South Korea’s growing chip manufacturing sector. Ulvac recently completed the construction of its Oregon site in September 2022. Ulvac’s Japan, South Korea, and U.S. sites are all similar in scale to each other.
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) which 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.