The R&D World Index (RDWI) for the week ending August 27, 2021, closed at 5,580.60 for the 25 companies in the R&D World Index. The Index was up 2.42% (or 131.63 basis points) from the week ending August 20, 2021. The stock of 15 R&D World Index members gained value from 0.17% (Honda) to 5.89% (Ford Motor Co.). The stock of 10 R&D World Index members lost value from -0.54% (Roche Holdings AG) to -4.35% (Pfizer).
South Korean electronics supplier Samsung announced last week that it plans to increase its R&D investments to $206.1 billion over the next three years, a 30% increase over its R&D investments over the past three years. The company plans to build a $17 billion semiconductor chip factory in the U.S. – it has been considering sites in Texas, New York and Arizona for the past six months. Samsung also announced that it is considering mergers and acquisitions to “solidify technology and market leadership.” The M&As will likely involve artificial intelligence (AI), 5G mobile networks and automotive technologies. The company is also considering expanding its contract drug-manufacturing business and creating a U.S.-based electric vehicle battery manufacturing plant.
The world’s largest contract semiconductor chip manufacturer, Taiwan Semiconductor Manufacturing Co. (TSMC) announced last week that it will increase prices on its devices by up to 20%. The increases will take effect by late-2021 or early-2022. High-performance devices will increase in price by 10%, while less-advanced chips will increase in price by about 20%. The price increases are expected to reduce short-term demand and provide long-term increased revenue for TSMC who expects to invest $100 billion over the next three years on new chip factories and equipment and increased R&D. TSMC has already started construction on a new chip fabrication facility in Arizona. TSMC accounts for roughly half (by revenue) of the global semiconductor foundry market and manufactures more than 90% of the world’s most advanced devices.
The White House more than doubled its forecast for 2021’s inflation last week stating it will rise 4.8% in 4Q 2021, up from its earlier 2% forecast in May 2021. Economists see inflation slowing in 2022 to a 2.5% CPI (consumer-price index) increase in 4Q 2022 and a 2.3% increase in 2023. Federal Reserve chairman Jerome Powell stated last week that the current inflation rate surge is temporary and that it is still too early to tighten money policy, which could slow economic growth. The White House also raised its projection for U.S. economic growth to 7.2% in 2021, from its earlier 5.0% rate noting, however, that the current COVID-19 Delta variant rise could damp that outlook. The U.S. budget deficit was also lowered to $3.1 trillion from its May forecast of $3.7 trillion. The deficit as a share of GDP is now forecast to be down to 13.9% from a May 2021 forecast of 16.7%.
German multinational chemical company BASF announced last week that it will build a pilot plant and development center for catalysts and solids-processing technologies at its headquarters site in Ludwigshafen, Germany. According to company representatives, the center will help its chemical catalyst experts transfer lab formulae to commercial scale more quickly and produce sample quantities of new catalysts for testing with shorter lead times.
Switzerland-based multinational food and drink processing conglomerate Nestle last week announced that it has upgraded its Singapore R&D facilities to feature labs, experimental kitchens, consumer testing, sensory evaluation rooms and open working spaces. The expansion also includes a new regional R&D accelerator with capabilities for start-ups, students and employees to develop and test new concepts in less than six months. The R&D accelerator is part of Nestle’s global R&D organization, consisting of 23 global locations.
RDW Index member General Motors announced last week that it was expanding its Technical Center in Israel by taking over a 120,000 ft2 building in Herzliya Pituach. The new building will bring together a GM workforce currently scattered over three sites in Herzliya Pituach. The new building will include a designated area for advanced test vehicles where development teams can examine new technologies developed locally. GM has had corporate activities in Israel since 2008 and had the first R&D center of a global car maker in the country. The company significantly increased its Israeli-based R&D capabilities in 2016.
RDW Index member Eli Lilly and Co. and San Francisco-based biotech Lycia Therapeutics last week jointly announced that they had entered into a multi-year research collaboration and licensing agreement focused on the discovery, development and commercialization of targeted therapeutics using Lycia’s lysosomal targeting chimera protein degradation technology. Lycia uses this approach to target the untapped extracellular proteome. This platform has the potential to inhibit many targets previously considered intractable across a spectrum of therapeutic areas. The companies expect to develop up to five targets, including those for immunology and pain. Lilly will be responsible for preclinical and clinical candidate development.
The state of Michigan last week announced that it has approved economic assistance projects for semiconductor wafer manufacturer SK Siltron, a Michigan-based subsidiary of South Korea’s SK Group. The manufacturing and R&D project is supported by a $1.5 million grant and expected to create more than 150 new jobs in Monitor Township, Michigan and generate more than $500 million in investments for supporting auto industry electric vehicle components.
RDW Index member Intel announced last week that it would provide commercial foundry services in the first phase of a broad U.S. Department of Defense (DOD) program that aims to build up the domestic design and production of high-performance semiconductor devices. Intel stated that it will join with IBM, Synopsys (Mountain View, Calif.), and Cadence Design Systems (San Jose, Calif.) and others as part of the DOD’s Rapid Assured Microelectronics Prototypes – Commercial program. The U.S. government’s FY2022 DOD budget includes $2.3 billion for microelectronics deemed critical to long-term national security. Intel has already planned to invest $20 billion in building out two new semiconductor fabs in Arizona. Construction on these plants is expected to start in 2021.
According to industry analysts, Western Digital (San Jose, Calif.), is in talks to merge with Japan’s semiconductor memory chip manufacturer Kioxia Holdings in a deal valued at more than $20 billion. Western Digital designs and manufactures hard-disk drives and has a long-term joint venture with Kioxia for manufacturing and R&D. Kioxia was formerly a part of Toshiba known as Toshiba Memory. Toshiba still retains a 40% share of the Kioxia business.
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 2019 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.