The R&D World Index (RDWI) for the week ending February 9, 2024, closed at 3,559.79 for the 25 companies in the RDWI. The Index was up 3.17% (or 109.24 basis points). Seventeen RDWI members gained value last week from 0.10% (Johnson & Johnson) to 10.86% (Eli Lilly & Co.) Eight RDWI members lost value the previous week from -0.10% (Cisco) to -5.15% (Astra Zeneca PLC).
Late last week, the Biden Administration announced $5 billion in funding for a semiconductor research consortium to enhance U.S.-based processor design and hardware innovation. The semiconductor funding will formally establish the National Semiconductor Technology Center in a location to be announced later. This is the second R&D investment from the CHIPs & Science Act signed in 2022. The first investment from the CHIPs Act was $35 million awarded to BAE Systems, Falls Church, Virginia, in December 2023 to expand a New Hampshire factory producing semiconductor chips for military aircraft, including F-15 and F-35 fighter jets. In January 2024, Microchip Technology, Chandler, Arizona, received $162 million in non-CHIPs government funds to improve two plants, one in Colorado Springs, Colorado, and another in Gresham, Oregon. Additional companies expected to benefit from CHIPs funding include Applied Materials, KLA Corp., Lam Research, Qualcomm, Intel, AMD, and Nvidia.
RDW Index member Google/Alphabet, Mountain View, California, announced last week the creation of a subscription chatbot, Gemini Advanced. This product is an update to the chatbot Google released a few months after the rise of OpenAI’s ChatGPT. Gemini Advanced is an attempt to profit from growing consumer interest in AI services that can generate novel text and images. A free chatbot version chatbot using less sophisticated AI technologies will remain available. The advanced subscription version will cost users $20 a month. This pricing will match similar offerings from Microsoft and OpenAI.
Biotech Metagenomi, Emeryville, California, announced last week that it had raised $94 million from its IPO (initial public offering) to support its gene-editing research of potential disease cures. The company says high-throughput screening and AI technologies enable it to mine billions of novel proteins to create gene-editing tools. With a diverse and modular set of tools, the company said it can choose the right one for a particular disease. The company is already partnered with Moderna, Cambridge, Massachusetts, and Ionis Pharmaceuticals, Carlsbad, California.
Power plants, industrial facilities, diesel trucks, road surfaces, and factories will be limited from emitting fine-particle pollution (or soot). The Environmental Protection Agency (EPA), Washington, D.C., announced last week that rules have been finalized for limiting particles less than 2.5 µm in diameter, which can get into human lungs and the bloodstream and cause severe health effects such as heart attacks, asthma, and cardiovascular diseases. The new rules will require states to monitor air quality and meet a new standard of 9 micrograms of soot per cubic meter, down from the existing standard of 12 micrograms per cubic meter. The new rule is expected to prevent up to 4,500 premature deaths and save up to $46 billion in net health benefits in 2033.
LG Chem, Seoul, South Korea, and RDW Index member General Motors, Detroit, announced a new agreement last week where LG will supply GM with $19 billion in electric battery cathode materials as part of the automaker’s long-term ambitions to become a leader in the development and manufacture of electric vehicles (EVs). The 10-year deal notes that LG will provide GM with more than 500,000 tons of cathode materials, enough for about five million EVs, beginning in 2026. The contract is said to be worth about $19 billion. LG will produce the material in a new plant it is building in Tennessee, where it expects to produce up to 60,000 metric tons of cathode materials a year starting in 2026.
Taiwan Semiconductor Manufacturing Company, Hsinchu, Taiwan, announced last week that it will add a second semiconductor manufacturing plant in southern Japan with an expected investment of about $20 billion. TSMC is also spending about $40 billion on two plants in Arizona and a similar investment in Germany. Its first fab, under construction since 2021, is expected to start operations in late 2024. The second Japanese plant is expected to be complete by 2027. These plants are expected to make chips for automotive, industrial, and consumer applications.
Semiconductor chip equipment maker Infineon Technologies, Neubiberg, Germany, announced last week that it was lowering its 2024 sales forecast as it reacts to continuing weak demand for chips for personal electronics. Its forecast for fiscal 2024, which ends in September, is down about 2% to $17.2 billion from its 2023 sales revenue. Automakers have provided a lifeline to chip equipment makers as they seek smaller and more electronics-intensive vehicles. Infineon has also lowered its investments in plants, equipment, and other assets (for example, R&D) to roughly $2.9 billion from $3.3 billion previously.
RDW Index member Merck & Co., Rahway, New Jersey, announced last week that it had struck a deal to purchase Elanco Animal Health, Greenfield, Indiana, aqua business for about $1.3 billion. The deal expands Merck’s animal health business. The deal includes a portfolio of medicines and vaccines, nutritional, and supplements for aquatic species, along with manufacturing plants in Canada and Vietnam and a research facility in Chile. Merck’s existing animal health business accounts for about $5.6 billion of the firm’s more than $60 billion in total revenues. The deal is expected to close in mid-2024.
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.
Tell Us What You Think!