The R&D World Index (RDWI) for the week ending July 28, 2023, closed at 2,988.19 for the 25 companies in the RDWI. The Index was up 2.32% (or 30.57 basis points). Thirteen of the 25 RDWI members gained value last week from 2.03% (Apple Computer) to 11.99% (Stellantis NV). Twelve of the 25 RDWI members lost value last week from -0.77% (Eli Lilly & Co.) to -5.06% (Bristol-Myers Squibb).
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RDW Index member Volkswagen AG, Wolfsburg, Germany, announced last week that it was investing $700 million for about a 5% stake in Chinese electric-vehicle (EV) maker Xpeng Inc., Guangzhou, China. The two companies will jointly develop two new EVs for the Chinese market under the Volkswagen brand with a rollout expected in 2026. Volkswagen also said it would be working with its existing Chinese partner SAIC Motor, Shanghai, to develop premium EV models. SAIC is the largest of the “Big Four” state-owned automakers in China. China is also Volkswagen’s largest single market.
Arizona State University (ASU), Tempe, and the Taiwan Semiconductor Manufacturing Company (TSMC), Hsinchu, Taiwan, last week announced a partnership agreement focused on student support, training and recruitment, and faculty work projects and research. TSMC is scheduled to open its Phoenix (Arizona) semiconductor fabrication plant in 2025. TSMC has been actively recruiting talent throughout the U.S. and recently stated that due to staffing limitations, they might have to delay the new plant startup, which again is an emphasis for the ASU partnership. The TSMC Phoenix plant is expected to have the most advanced chipmaking technology in the U.S., further increasing the need for a prepared, highly trained workforce. The collaboration will support the creation of a direct student support process with faculty engagement, professional and career education plans, and membership in ASU’s Corporate Affiliate Program through the university’s career centers.
Biopharm developer Biogen, Cambridge, Massachusetts, announced last week that it would be eliminating about 1,000 jobs or 11% of its workforce, explaining that it has too many costly drug research projects that were not likely to generate large revenues. The cuts would help the company reduce its annual operating expenses by about $1 billion by 2025. The company currently has about 8,725 employees. The operating expense savings will be used to invest about $300 million into new product launches and the remaining R&D programs. The company is currently focusing on experimental drugs for Alzheimer’s disease, lupus, Parkinson’s disease, and amyotropic lateral sclerosis.
A group of major automakers plans to make a joint investment to build thousands of EV chargers in the U.S. to ease a shortage of charging spots that deter many consumers from choosing EVs. There are seven companies in this initiative including BMW, General Motors, Honda Motor, Hyundai Motor, Kia, Mercedes Benz, and Stellantis. Other companies including Ford Motor, Nissan Motor, and Rivian Automotive, along with GM and Mercedes have recently negotiated a deal with Tesla for partial access to Tesla’s U.S. system of about 22,000 fast chargers known as the Supercharger network. These automakers plan to change to Tesla-style charging hardware on their EVs within a few years from their current non-compatible hardware. The new company being created by the seven automakers plans to install a combination of each type of charger at each site. All these automakers now look to eventually change to the same charging port used by Tesla.
RDW Index member General Motors, Detroit, announced last week that it was raising its profit outlook for the second time this year citing better-than-expected new vehicle demand. The company now expects its pretax profit to be between $12 to $14 billion from its previous target of $11 to $12 billion. The company also expects to cut an additional $1 billion in fixed costs on top of the $2 billion the company had already targeted. The company also will spend less on capital projects. The average price customers paid for a GM vehicle rose in 2Q by 3% to about $52,000 from 1Q prices.
Despite a continued drop in the consumer price index, indicating a drop in the inflation metric, the Federal Reserve unanimously decided to raise short-term interest rates last week bringing the rates to a range of 5.25% to 5.50%, the highest rates in 22 years. The Fed also commented that there’s likely to be one more rate increase in 2023 and no relaxation until 2024 at the earliest. The Fed’s next meeting is in September and there were some comments that they may pause the rate increase at that meeting.
RDW Index member Intel, Santa Clara, California, announced a $1.5 billion profit last week for the current quarter. This was a change from the previous two quarters where the company recorded record losses. The profit noted was attributed to increases in the PC (personal computer) market which market analyst International Data Corp. (IDC), Needham, Massachusetts, said is now healthy again.
Advanced Micro Devices (AMD), Santa Clara, California, announced last week their plan to invest $400 million in India and employ about 3,600 engineers by 2028 at their Bengaluru, India, facility over the next five years. The investment is aimed at expanding R&D and engineering operations in India. The new 500,000 ft2 campus will increase AMD’s office footprint to 10 locations across several cities in India. AMD already has 6,500 employees in India.
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
