The R&D World Index (RDWI) for the week ending June 23, 2023, closed at 2,855.67 for the 25 companies in the RDWI. The Index was down -1.43% (or -41.38 basis points). Six of the 25 RDWI members gained value last week from 0.76% (Johnson & Johnson) to 4.83% (Merck & Co.). Nineteen of the 25 RDWI members lost value last week from -0.96% (Alphabet/Google) to -23.77% (Volkswagen AG).
RDW Index member Ford Motor Co., Dearborn, Michigan, announced last week that its joint venture with EV (electric vehicle) battery maker SK On, Seoul, South Korea, will get a $9.2 billion loan from the U.S. Department of Energy (DOE) to help finance two new battery production plants in Kentucky and one in Tennessee. The Ford/SK on collaboration is called BlueOval SK and needs to meet several criteria to receive the DOE loan.
Advanced Micro Devices (AMD), Santa Clara, California, announced plans last week to invest $135 million over the next four years in several R&D projects to develop technologies for data centers, networking, 6G infrastructure, and next-generation artificial intelligence systems. The work will be performed at AMD’s Xilinx sites in Ireland. AMD purchased the fabless semiconductor Xilinx company in 2022 for $49 billion.
Last week, U.S. Senate majority leader Chuck Schumer (D, NY) launched an effort to write new rules for AI-based products. Schumer called for more federal involvement in maintaining U.S. competitiveness while mitigating AI’s potential harms. Schumer wants the U.S. to take the lead in innovating AI products and not let adversaries craft the standards for AI transformative technologies. He realizes that imposing new regulations on technologies that are still being developed will be difficult especially where tech companies have battled with industries and consumers for years.
The COO of OpenAI, Brad Lightcap, noted at a Wall Street Journal-sponsored technical event in Cannes, France, last week that while AI technologies may create new jobs, they will likely eliminate some as well. He stated that AI models need people to identify the tasks they should be doing, and the resulting work must be checked and verified. People will them become AI orchestrators. New people will also need to be brought in to do distribution and operations and sales and marketing.
RDW Index member Intel, Santa Clara, California, announced last week that it will invest up to $25 billion in a new semiconductor factory in Kiryat Gat, Israel. Work at the site is already underway.
China banks reduced interest rates on loans to households and businesses last week, signaling to analysts the country’s attempts to reignite a fading economic recovery. The government also said it is studying other policy measures to promote sustained economic growth. Rates for short-term loans and mortgages dropped by about 0.1%.
The European Union (EU) last week said it is looking to lock in about $55 billion in financing for Ukraine between 2024 and 2027 to provide sustained external funding regardless of the U.S.’s decisions after the 2024 presidential election. The budget support would help reconstruction in Ukraine and underpin other programs. The proposal will need backing from EU member states, many of which face tight budget conditions amid the economic slowdown.
RDW Index member Alphabet, Mountain View, California, last week announced the launch of a new AI-driven anti-money-laundering product as part of its cloud business. The technology uses machine learning to help clients in the financial sector comply with regulations that require them to screen for and report potentially suspicious activities.
3M, St. Paul, last week agreed to pay up to $12.5 billion to settle hundreds of lawsuits brought by cities that said their drinking water was contaminated with “forever chemicals (PFAS used in firefighting foam)”. The settlement will cover public water systems throughout the U.S. The risk of exposure to PFAS comes from chemicals in firefighting that seeped into the ground in U.S. communities. The company previously announced that it will cease PFAS manufacturing by the end of 2025.
The President Biden administration announced last week that it is broadening eligibility for federal subsidies under the Chips Act, stating that companies providing tools, chemicals, and supplies for the semiconductor industry can now qualify for funding along with the chip manufacturers. Taiwan Semiconductor Manufacturing Company (TSMC) has pushed the U.S. to make funding available for dozens of its suppliers supporting its new $40 billion chip plant in Phoenix.
Surveys by data firm S&P Global, New York City, last week revealed sharper-than-expected slowdowns in the Eurozone, Japan, and Australia. In particular, activity in the services sector grew more slowly last month than in previous months. Manufacturing activity also remained weak according to the survey. The U.S. composite Purchasing Managers Index also dropped from previous months.
World banks underestimated inflation in 2022. Banks are trying not to make similar mistakes in 2023 and, as a result, are expecting to make further interest rate hikes and stating that the rates will stay high for some time. Pressure for these hikes is slowly ebbing in some areas as housing markets stabilize and unemployment is resuming its decline.
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