The R&D World Index (RDWI) for the week ending August 18, 2023, closed at 2,946.81 for the 25 companies in the RDWI. The Index was down -0.91% (or -26.84 basis points). Seven of the 25 RDWI members gained value last week from 1.36% (Bristol-Myers Squibb) to 3.44% (Eli Lilly & Co.). Eighteen of the 25 RDWI members lost value last week from -0.52% (Sanofi SA) to -8.03% (Alibaba).
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RDW Index member Intel, Santa Clara, California, announced last week that it has canceled its more than $5 billion offer to buy Tower Semiconductor, Migdal Haemek, Israel, following the failure of Chinese regulators’ approval of the deal. Tower is the seventh largest semiconductor manufacturer with facilities in Israel, Italy, U.S., and Japan. Tower invests more than $80 million annually in R&D. Intel was hoping to acquire Tower which could have contract manufactured older generation chips.
Israel also announced last week the establishment of a state-of-the-art R&D lab, aimed at providing critical infrastructure and support to companies and researchers throughout Israel. NextSilicon, Givatayim, Israel, was selected to lead a consortium of four Israeli companies with expertise in high-performance computing, artificial intelligence (AI) acceleration, branding and specialized memory access. This cooperative approach matches with a broader goal of promoting cross-industry synergies and knowledge exchange. The R&D lab has been equipped with state-of-the-art computer, communication, and storage systems.
Samsung Electronics, Suwon-si, South Korea, announced last week the establishment of an R&D organization in Mountain View, California. The focus of this U.S. lab is the enhancement of next-generation semiconductors. Samsung is facing challenges with decreased demand and intensified competition by global companies, including Taiwan Semiconductor Manufacturing Company (TSMC), Hsinchu, Taiwan, who has already secured Apple and Nvidia customers for its 2-nanometer processes.
The U.S. Office of Management and Budget (OMB) and the Office of Science and Technlogy Policy (OSTP) last week sent memoranda to the heads of federal agencies and executive departments stating that “trustworthy” AI tops the list of technologies they should consider for their FY2025 R&D budget proposals. The White House tasked agencies to come up with new approaches for applying AI to improve government functions and public services. The memo also noted that R&D budget submissions should prioritize national security, ways to offset climate change, and improve American’s health. The memo also directed agencies to fund regional innovation and workforce development in STEM (science, technology, engineering, and mathematics) with an emphasis on emerging research institutions and historically underserved communities.
VinFast, Singapore/Hai Phong, Vietnam, an electric vehicle (EV) manufacturer issued a non-traditional stock offering last week that initially put its outsized valuation ahead of that by General Motors and Ford Motor Company. The company is controlled by Vietnamese conglomerate Vingroup. VinFast was merged with special purpose acquisition company Black Spade, Hong Kong, which resulted in $30 million in proceeds going to Vin Fast. The company said it plans to build a new EV factory in North Carolina with production schedule there to begin in 2025. VinFast, however, has only delivered 18,700 EVs since starting production in Vietnam in 2021. Sales and revenues have slowed significantly in 2023.
The rush to hire researchers with AI experience is pushing the salaries of these individuals to high levels, according to a recent report in the Wall Street Journal. AI specialists can now demand mid-six-figure salaries according to the report and include hefty bonuses and stock grants. Recruiters say that this escalation is increasing because the available supply of AI practitioners is falling short of demand, particularly for mid-level and higher-level positions.
Advanced Micro Devices (AMD), Santa Clara, California, announced last week that it has opened two R&D facilities in upstate New York. The AMD facilities are in Fishkill and Linden Oak and they will focus on the development of devices for mixed signal integrated circuits and packaging for processors used in cloud computing and data centers. According to state officials, the projects could receive up to $5 million in tax credits in exchange for statewide job creation commitments. AMD said they expect to continue to finance operations at both locations over the next several years.
Tetra Pharm Technologies, Copenhagen, Denmark, announced last week the completion of its purpose-built headquarters. Formerly occupied by Ambu A/S the facility had extensive upgrades to enlarge Tetra’s manufacturing capacity, bolster and streamline its production capabilities, and provide an optional environment for the company’s R&D actvities. Tetra will continue operating its existing facility in Hillerod, Denmark, and it will transition to a dedicated pilot plant for testing, product trials and evaluations without interfering with the operations at the new facility. Tetra R&D and product development focus on the treatment of diseases related to the endocannabinoid system.
U.S. officials that approved the sales of DuPont’s sustainable materials business to a Chinese company are finding the deal is not working out as planned. Data that was termed as sensitive to U.S. interests which was supposed to stay within the U.S. was found U.S. Department of Defense personnel to reside on Chinese computers. The Chinese company claimed that DuPont transferred the suspected information to the wrong company. As a result of this incident, the Biden administration increased scrutiny on such actions.
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 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.
