The R&D World Index (RDWI) for the week ending July 1, 2022, closed at 4,562.46 for the 25 companies in the RDWI. The Index was down 4.86% (or 232.89 basis points) from the week ending June 24, 2022. Four of the 25 RDWI members gained value from 0.24% (Oracle) to 1.40% (Pfizer). Twenty-one of the 25 RDWI members lost value last week from -0.28% (Eli Lilly & Co.) to -7.83% (Alphabet/Google).
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Global Wafers Co., Hsinchu, Taiwan, announced last week that it plans to build a $5 billion silicon wafer plant in Sherman, Texas (near Dallas). If built, this would be the first silicon wafer plant built in the U.S. in more than 20 years. The company stipulated that their building of the plant depends upon Congressional approval of the Chips Act which will provide about $52 billion to build up the U.S. semiconductor industry. The Chips Act is currently tied down as Senate and House leaders try to resolve differences between a broader Senate bill passed in 2021 as the U.S. Innovation and Competitiveness Act and the House version called the America Competes Act.
The Biden Administration’s Office of Science and Technology Policy (OSTP) last week confirmed an earlier MIT Technology Review report that it has created an interagency working group for climate change as called for under the current federal funding bill. The group includes representatives of 10 research and mission agencies, including NOAA, NASA and the Department of Energy. The group is soliciting input from groups and individuals with a five-year plan already agreed upon for creating solar geoengineering-based ways of counteracting climate change. The group plans to complete a draft by the end of July which will be reviewed by the Subcommiittee on Global Change Research and other federal offices in time to meet the mid-September deadline spelled out in the appropriations act. Solar geoengineering plans are controversial in that they are massive in concept, impact all global countries and will require those countries’ approval before implementation.
RDW Index member Volkswagen AG, Wolfsburg, Germany, was reported last week to be close to selling a minority stake in its U.S. electric vehicle (EV) recharging business to Siemens AG, Munich, Germany, in a deal valued at $2 billion. The plan would more than double the number of EV charging stations across the U.S. and Canada to 1,800 by 2026. The deal would complement Siemens existing operations in the EV recharging sector. Siemens develops and manufactures charging equipment for buses, trucks and heavy duty EVs in Wendell, North Carolina.
The United Kingdom’s National Epitaxy Facility announced last week that it has received additional funding from U.K. Research and Innovation (UKRI) which will allow it to support semiconductor epitaxial R&D for the next 5 to 10 years. Since 2017, the facility has supported about $140 million in research in 25 universities. The facility is a collaboration between the Universities of Sheffield, Cambridge and University College London (UCL).
RDW Index member Apple, Cupertino, California, was reported last week to be expanding its engineering R&D site in Rawabi, Palestine. No specific details on the R&D expansion were provided. The Rawabi site currently has about 60 researchers working on Apple Silicon and Face ID, which is also being investigated in other Israeli sites, as well.
The U.S. Food and Drug Administration (FDA) announced last week that it is devising plans to allow clinical trials testing for the transplantation of pig organs into humans. The plans come following a small number of experimental surgeries involving transplantation of pig organs into a critically ill man and brain-dead patients. No details were provided as to when these trials might begin, adding that proposals from researchers will be handled on a case-by-case basis.
A decision by the U.S. Supreme Court last week sharply curtailed the Environmental Protection Agency’s (EPA’s) powers for imposing limits on emissions from coal-fired plants, such as electric power plants. The Court stated that when the agency issues regulations with sweeping economic and political consequences the regulations are presumptively invalid unless Congress has specifically authorized the action. The ruling provides strength for litigants, such as the Securities and Exchange Commission (SEC) to pending court cases.
The recent Federal Reserve action for increasing the short-term interest rates is expected to have dire consequences for the cost of federal borrowing and as a result the federal funding of R&D. The interest rate increase is expected to increase federal debt payments by more than $100 billion annually. The increase in debt interest expense will result in higher debt borrowing — and even higher interest expenses.
The FDA advised Covid-19 vaccine manufacturers (Pfizer and Moderna) to make new vaccines that target the ancestral strain of the coronavirus, and specifically the subvariants BA.4 and BA.5. These subvariants have been spreading rapidly throughout the U.S. and have been partly able to elude the original vaccines provided to the U.S. population.
The Federal government last week agreed to pay $3.2 billion for 105 million doses of Pfizer Inc.’s Covid-19 vaccine. The deal would provide enough doses for the government’s planned fall booster campaign, which the government is expecting to blunt a potential wave in new cases, possibly driven by the Omicron subvariants noted above.
Semiconductor memory maker, Micron Technology, Boise, Idaho, last week reported that it expects a significant drop in demand at the end of its quarter. The 21% decline is below what analysts expected the company’s first year-over-year decline in more than two years. The company pointed to the weakening PC and smartphone markets as the main culprits for this 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) 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.
