The R&D World Index (RDWI) for the week ending January 28, 2022, closed at 5,280.68 for the 25 companies in the RDWI. The Index was up 1.39% (or 72.41 basis points) from the week ending January 21, 2022. The stock of 12 RDWI members gained value from 0.34% (AstraZeneca) to 4.88% (Apple Computer). The stock of 13 RDWI members lost value from -1.29% (Novartis) to -8.28% (Intel).
Chinese authorities last week approved the $35 billion purchase by AMD (Advanced Micro Devices), Santa Clara, California, of Xilinx Inc., San Jose, California. China’s State Administration for Market Regulation said it had conditionally approved the deal which the companies reached in October 2020. Regulators in most other major countries, except China, had approved the deal in December 2021. U.S. regulators are expected to approve the deal by early Spring 2022. The AMD deal would put it on an equal level with rival Intel, which also has a FPGA (floating point gate array) business similar to Xilinx in its Altera division which Intel purchased in 2015. The programmable FPGA chips are used in military communication systems, 5G telecomm systems and radar systems. The Chinese regulator stated that part of the approval requires the merged entity to maintain or expand investments into R&D activities in China for core technologies.
RDW Index member Intel, Santa Clara, announced last week that it had scored a legal victory in Europe when the European Union’s General Court in Luxembourg struck down much of a 2009 European finding that Intel had abused its dominant market position at the time by issuing rebates and payments that restricted rival AMD from competing. The court said that the finding was incomplete.
China announced last week that it expects to sign a space agreement with Russia by the end of 2022 that will include the construction and operation of a joint lunar research facility. The two countries are targeting construction of the International Lunar Research Station to begin by 2026 with a site chosen by 2025. It’s expected to have its basic infrastructure completed by 2035. The station will be able to conduct multidisciplinary research activities. The space industry is a critical element of China’s overall national strategy according to a recent China National Space Administration white paper. The station design would also include a reserve spacecraft capable of taking off from the moon’s surface. Member states of the European Space Agency (ESA) have been invited to participate in the development of China’s facility, but they have not yet responded.
The U.S. Federal Reserve System (Fed) last week said it was ready to raise short-term interest rates at its next (March 15-16) meeting and could continue to raise them at a faster rate in 2022 than it did during the past decade. The Fed will likely raise interest rates 0.25% in March and another 0.25% at its follow-up meeting in May 2022. The Fed has scheduled three 0.25% interest rate increases in 2022 and another three in 2023.
RDW Index member Pfizer, New York City, and its COVID-19 vaccine partner BioNTech, Mainz, Germany, announced last week that they have started a trial evaluation of an adapted version of their COVID-19 vaccine that targets the Omicron variant of the coronavirus. They are testing the new vaccine on adults aged 18 to 55 in the U.S. and South Africa to evaluate its safety, tolerability, and immune response when given as a primary shot and also as a booster dose. Initial results are expected by June 2022. Pfizer could ask the U.S. Food and Drug Administration (FDA) for emergency authorization and begin distribution in March 2022 if the vaccine works safely. If needed, the companies could manufacture four billion doses in 2022. The other approved COVID-19 vaccine manufacturer, Moderna, Cambridge, Massachusetts, is scheduled to start clinical trials of its Omicron-specific vaccine candidate in early February 2022.
RDW Index member General Motors, Detroit, last week confirmed it is converting its Lake Orion, Michigan, assembly plant outside of Detroit into a $4 billion center for production of electric pickup trucks. The company also said it was building an electric cell-manufacturing plant in Lansing, Michigan. GM will split the $2.6 billion cost of the battery cell plant with its partner LG Energy Solution, Seoul, South Korea. LG also recently announced it was working on a joint venture with Honda Motors to supply batteries for its electric vehicles (EVs). Honda U.S. plans on using the GM-developed Ultium platform for its EVs. The collaboration of Korean and Japanese companies to build EVs in the U.S. is a unique situation.
The U.S. Environmental Protection Agency (EPA) announced last week that it is preparing tougher environmental regulations for power plants in the coming months as part of the administration’s efforts to reduce greenhouse gas emissions. The agency is looking at a full suite of air and water pollution issues to maximize their ability to protect the public, according to the EPA administrator, Michael Regan. A lot of new rules could raise the cost of electric power to business and communities, according to the power watchdog groups.
Blommer Chocolate Co., Chicago, announced last week that it was opening a new customer friendly R&D Applications Lab in February in downtown Chicago at the Merchandise Mart. Blommer is the largest chocolate-ingredient supplier in North America and the largest cocoa bean processor. Blommer expects the lab to deliver innovation, technical support and creative solutions for its customers.
Kubata, Osaka, Japan, announced last week that it has initiated R&D programs to develop autonomous agricultural robots and other farming technologies at its North America R&D Unit in Grapevine, Texas. The R&D unit plans to focus on the advancement of research in agricultural machinery using artificial intelligence (AI) and smart technologies while utilizing next-generation power sources. The R&D group has already developed concepts for use in U.S. vineyards.
The U.S. Department of Commerce (DOC) last week announced that the U.S. economy, adjusted for inflation, grew at a 6.9% annual rate the 4Q 2021. This was significantly larger than 3Q’s 2.3% GDP growth and exceeded analysts’ expectations of 5.5% growth. Reasons cited for the growth included increased consumer spending, an increase in inventories and increased factory production.
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.