The R&D World Index (RDWI) for the week ending July 8, 2022, closed at 4,813.50 for the 25 companies in the RDWI. The Index was up 5.50% (or 251.04 basis points) from the week ending July 1, 2022. Sixteen of the 25 RDWI members gained value from 0.37% (General Motors) to 9.76% (Alphabet/Google). Nine of the 25 RDWI members lost value last week from -0.02% (Novartis) to -2.09% (Roche Holdings AG).
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RDW Index member Microsoft, Redmond, Washington, announced last week that it has launched a climate research effort aimed at building a network of collaborative participants for addressing key environmental problems. Microsoft’s Climate Research Initiative will initially focus on carbon reduction and removal, carbon accounting and environmental resilience. An initial round of nine projects includes work on reducing emissions from cement production and monitoring carbon dioxide in the atmosphere. Most of these research projects are new although some researchers were already engaged in research at Microsoft.
Applied Materials, Santa Clara, California, announced last week that it has signed a memorandum of understanding (MOU) with the Ministry of Trade, Industry and Energy of South Korea to build an R&D center in Gyeonggi Province, South Korea. This action follows the U.S.-South Korea summit in May 2022 which included President Biden and Samsung Electronics’ top executives. Applied Materials competitors Lam Research and Tokyo Electron already have R&D centers in South Korea, which will constitute three of the top four semiconductor equipment companies. The other top equipment maker, Europe’s ASML plans to open an EUV lithography and remanufacturing facility in South Korea in 2024.
RDW Index member Apple, Cupertino, California, announced last week that it is developing a feature for securing its products against some of the world’s most sophisticated spyware. The tool, called Lockdown Mode, is targeted at a small number of users favored by state-sponsored hackers. When used, it will limit the abilities of apps, websites and features for security purposes. On Apple’s iPhone, the product will block most message attachments and incoming FaceTime calls from first-time callers. Apple is expected to roll-out the feature for testing before wide release in the fall 2022.
Several semiconductor and electronic device manufacturers last week issued announcements of slowing demand due to slumping personal computer sales and a rout in cryto-currency markets. These warnings do not include automotive equipment markets or data centers currently. Micron Technologies, for example, issued a muted sales outlook last week citing weakened demand. Advanced Micro Devices (AMD) also stated that it is taking a conservative view of the PC market for 2022. And RDW Index member Microsoft has lowered its earnings outlook, citing a stronger U.S. dollar which has lowered the value of its foreign sales. The good news is that the lead times for chips has declined along with the ballooning prices with the overall lower demand.
NASA’s Glenn Research Center in Cleveland, Ohio, announced last week the opening of its new Research Support Building (RSB). The new building will house 164 employees with open office floor plans, private offices, conference rooms and collaborative engineering rooms. The contemporary building was awarded the Leadership in Energy and Environmental Design (LEED) Gold certification for its environmental features. RSB is part of a multiyear effort to revitalize or replace WWII-era buildings.
RDW Index member Ford Motor Co., Dearborn, Michigan, announced last week that its Argo AI startup focused on driverless car technologies had laid off about 150 workers or 6% of its workforce following several years of fast-paced hiring. The Pittsburgh-based startup stated that this action was made to bring its staffing levels to more operational levels. Argo AI began driverless car testing operations in Miami and Austin, Texas, earlier this year.
Rising sales of electric and hybrid vehicles, which almost doubled from a year ago, fueled a 23% rebound in China’s car sales in June, according to a report issued last week by the China Passenger Car Association. Tesla was among Chinese car makers seeing the strongest rebound, following a three-month slump in sales which ended in May. Tesla sales almost doubled that of May, while sales at Volkswagen AG’s joint venture with China’s SAIC Motor increased 51% in June from a year ago.
Shell Oil, Houston, announced last week that, despite the political uncertainty of offshore oil drilling operations, it continues to expand its operations in the Gulf of Mexico and expects strong second and third quarter profits from existing operations in the Gulf. This reverses pandemic-affected lower demand over the past two years. Shell is the largest offshore operator in the Gulf and has faced fierce opposition from environmental groups.
Following the energy crisis created by the Russian invasion of Ukraine and European sanctions against Russian energy supplies, the coal industry is seeing a renewed interest in supplying the energy shortfall. Spot coal prices last week at Australia’s Newcastle port topped $400 a ton for the first time in June. Europe, the U.S. and China are all expanding coal production to prevent summertime electricity shortages or brownouts. The burning of coal fuels emit about twice the carbon dioxide as does the burning of natural gas for the same energy output. Environmentalists are concerned but admit that it’s justified as a short-term solution to the Russia-Ukraine war and its resulting sanctions.
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.
