The R&D World Index (RDWI) for the week ending March 17, 2023, closed at 2,416.44 for the 25 companies in the RDWI. The Index was up 3.19% (or 74.74 basis points). Fifteen of the 25 RDWI members gained value last week from 0.52% (Johnson & Johnson) to 12.58% (Alphabet/Google). Ten of the 25 RDWI members lost value last week from -1.41% (IBM) to -10.92% (Volkswagen AG).
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RDW Index member Volkswagen AG, Wolfsburg, Germany, announced last week that it had chosen a site in Ontario, Canada, for its first automotive battery plant outside of Europe. VW is already building similar plants in Spain and Germany. VW has been negotiating for months about building its new battery plant in eastern Europe. VW’s Porsche AG division also announced last week that it plans to launch an all-electric SUV, which will be the cornerstone of its growth plan for high-end automotive consumers, especially in its biggest markets in China and the U.S. This vehicle is currently undergoing testing and development and has not been revealed.
To boost its sales in China and the U.S., VW announced last week that it plans to invest close to $200 billion in those countries over the next five years. The company said it would target two-thirds of that money on the development of electric vehicles (EVs) and new digital technology. The company’s previous investment plan only spent a little more than half of its R&D budget in these areas. Part of the investment in the U.S. is in response to the U.S.’s Inflation Reduction Act (IRA) which sees $300 billion in government spending aimed at clean technologies.
South Korea announced plans last week to create the world’s largest semiconductor base over the next 20 years. The new industrial complex for advanced semiconductors will be formed by 2042 in the city of Yongin, near Seoul based on private sector investments of about $238 billion, according to the country’s Ministry of Trade, Industry, and Energy. Samsung has committed to building five plants in Yongin to support a mix of the company’s contract chip-making operations and memory chip production. The complex will include up to 150 materials, components, and chip-design firms. The country will increase tax breaks for chip infrastructure investments and work to ease regulations.
Micron Technology Inc., Boise, Idaho, announced last week that it plans to invest $100 billion to open a semiconductor manufacturing campus near Clay, New York, with construction beginning in 2024 and production beginning in the latter half of this decade. To make this viable, local civic leaders are looking to cultivate a local technology workforce. Local colleges and universities are overhauling their education and training programs to increase the number of new engineers they produce and teach technical workers skills such as supply chain management and orbital welding. Micron has indicated it will apply for federal incentives along with subsidies from the state of New York.
RDW Index member Meta Platforms Inc., Menlo Park, California, has announced that it created a tool to predict the structure of hundreds of millions of proteins using the artificial intelligence (AI)-based computer program ESMFold. This program created a public database of 617 million predicted proteins. Researchers are using ESMFold to compete with the AlphaFold modeling system from DeepMind Technologies, London, which is now a subsidiary of Alphabet/Google. AlphaFold has a database of 214 million predicted proteins being used to help accelerate drug discovery. ESMFold is said to be 60 times faster than AlphaFold.
The recent failures of Silicon Valley Bank, Santa Clara, California, and Signature Bank, New York City, have created issues for the Federal Reserve System and its schedule of interest rate increases to ward off the past year of rising inflation rates. The Fed is scheduled to meet next week, and the expected plan was to increase interest rates by either 0.25% or 0.50%. Continuing to raise interest rates now could cause some concern in an unstable banking system and lower rates might be preferred. But economic data is not changing as fast as the fed would like so continuing to raise rates is more likely their option of choice. And with inflation still at 6.0% the more likely choice next week is to see a 0.5% increase.
The U.K. last week announced that it would spend an extra $6 billion on its nuclear-armed submarine fleet and replace munitions stockpiles (depleted by the Russia/Ukraine war) in response to an “epoch-defining systemic challenge” by China to the U.K. and its allies. British diplomats were aggressive in their remarks explaining these actions. The U.K. said it would spend these extra funds over the next two years to reinforce its stretched military. The $6 billion was less than some Ministry of Defense officials had hoped for.
OpenAI, San Francisco, the Microsoft-backed developer of the viral chatbot ChatGPT that has taken the tech world by storm over the past six months, announced last week a new version of its AI technology. GPT-4 (Generative Pre-Trained Transformer) is a more powerful version of ChatGPT, it is more creative and more collaborative, according to OpenAI. The company is rolling out the new version through data-sharing partnerships, which companies are paying to access. GPT-4 also makes fewer mistakes and performs better than most people on exams.
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 spending 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
