The R&D World Index (RDWI) for the week ending October 14, 2022, closed at 2,197.17 for the 25 companies in the RDWI. The Index was down -0.31% (or -6.78 basis points) from the week ending October 7, 2022. Eleven of the 25 RDWI members gained value during the past week from 0.74% (Intel) to 5.23% (Merck & Co.). Fourteen of the 25 RDWI members lost value last week from -0.11% (Novartis) to -10.12% (Alibaba).
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RDW Index member Ford Motor Co., Dearborn, Michigan, announced last week that it is opening a new R&D center in Atlanta, joining other Ford R&D facilities in Tel Aviv, Israel, Palo Alto, California, and its main headquarters in Dearborn. The Ford Atlanta Research and Innovation Center (FARIC) will be in a 24,000-ft2 space on Atlanta’s Upper West Side. Ford chose Atlanta to take advantage of one of the “most diverse tech talent markets in the country.” FARIC’s work will focus on developing software solutions in areas that include digitally connected vehicles and artificial intelligence.
RDW Index member General Motors, Detroit, announced last week that it is starting an energy business, GM Energy, to sell power storage units and services to homeowners and commercial clients. The new division will help customers transfer electricity from electric vehicles (EVs) to a home or building to protect against power outages and to transfer electricity to the grid during off-peak hours. The new division is an offshoot of the automaker’s battery development work for its EVs. In 2021, GM created its BrightDrop division which sells electric vans and software services to commercial customers.
RDW Index member Intel, Santa Clara, California, last week announced a corporate restructuring that plans to create a greater decision-making separation between its semiconductor chip designers and its chip manufacturing plants. The restructuring is designed to let Intel’s global network of factories operate like a contract chip-making enterprise, taking orders from both Intel engineers and external chip companies on an equal footing.
Westinghouse Electric Co., Cranberry, Pennsylvania, which is owned by Brookfield Business Partners, Toronto, announced last week that it is being purchased by Cameco Corp., Saskatoon, Saskatchewan, and Brookfield Renewable Partners in a roughly $8 billion strategic partnership where Brookfield would own 51% and Cameco would own 49%. Westinghouse’s primary focus is on the design and development of nuclear reactors. The company was purchased from Toshiba in 2018 following a string of financial failures in the construction of nuclear power plants. Westinghouse currently services about half of all the global nuclear reactors.
Samsung’s local offices and R&D center in Kyiv, Ukraine, last week were affected by a Russian missile that landed about 150 meters from their large high-rise office building. All personnel had been evacuated and the damage was mostly limited to shattered windows. It was not immediately clear why the Samsung building might have been targeted.
Taiwan Semiconductor Manufacturing Co., (TSMC), Hsinchu, Taiwan, announced last week that it was scaling back on its capital expenditures for 2022. In July, the company said it would invest $40 billion this year in capital expenditures and now it says it will only invest $36 billion, about 10% less. Most of these expenditures go into the purchase of long-lead semiconductor tooling. The semiconductor sales slowdown is blamed for these cuts, which had soared during the COVID-19 pandemic. TSMC’s production capacity has been reduced for Q4 2022 as a result. About 72% of TSMC’s production demand for 3Q 2022 was targeted at North American customers, up from 64% in 2Q 2022. About 41% of this production goes into smartphones.
The slowing global economy is affecting personnel hiring in the tech industry, according to a report released last week by Freelancer.com, an online freelance marketplace. The number of job postings for software developers on this site rose 55% in 3Q on a year-over-year basis. This was the sharpest gain among the more than 2,000 job-related skills tracked on this platform.
RDW Index member Toyota, Toyota City, Japan, announced last week that it had begun producing cars at a new production plant in Myanmar, which had been on hold following a military coup that seized power last year. The car maker’s business in Myanmar includes parts imports, manufacturing, and sales which aren’t directly related to state-owned and military-affiliated companies, according to Toyota personnel.
New subvariants of the COVID-19 Omicron variant are on the rise, according to recent data from the U.S. Centers for Disease Control and Prevention (CDC) released last week. Two of the Omicron subvariants (BQ.1 and BQ.1.1) are related to the BA.5 version which drove the most recent U.S. viral surge. These were estimated to represent a combined 11.4% of the U.S. COVID-19 cases by mid-October. BA.5 accounts for 68% of recent cases.
U.S. Department of Labor data released last week noted that the core consumer price index, which excludes energy and food prices, rose 6.6% in September from September 2021, the largest increase since August 1982. This index rose 6.3% in August. The overall consumer price index (CPI) rose to 8.2% in September. This data ensures that the Federal Reserve will increase short-term interest rates by another 0.75% at its meeting on November 1-2. This will bring the interest rates to a range of 3.75% to 4.00% with another Fed meeting on December 13-14 where they might again raise the rates to combat the persistent inflationary effects.
Automaker Renault SA, Boulogne, France, and Nissan Motor Co., Yokohama, Japan, announced last week that they were discussing a partnership that could include investment by Nissan in Renault’s new electric vehicle (EV) unit. Nissan has been producing EVs for more than 10 years and is seen as holding the upper hand in these alliance negotiations. Renault currently owns a 43% stake in Nissan. Nissan was forecast to invest $5.2 billion in R&D in 2021 while Renault invested about $2.5 billion in the same period.
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) who invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spent 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.
