The R&D World Index (RDWI) for the week ending June 7, 2024, closed at 3,707.32 for the 25 companies in the RDWI. The Index was up 2.44% (or 88.31 basis points).

Seventeen RDWI members gained value last week from 0.08% (Alibaba) to 7.45% (Oracle). Eight RDWI members lost value the previous week from -0.10% (Sanofi SA) to -5.97% (Volkswagen AG).

Industry highlights

RDW Index member Microsoft, Redmond, Washington, and Hitachi, Tokyo, announced last week a multibillion-dollar collaboration to accelerate the adoption of generative AI. As part of the three-year collaboration, Hitachi will integrate Microsoft products, including Microsoft Cloud and GitHub Copilot into Hitachi’s Lumada core digital software and services business. Hitachi expects to see $18.9 billion in revenue from Lumada in its 2024 financial year. Hitachi announced a partnership with Google, Mountain View, California, in May that would see Hitachi establish a business unit focused on helping businesses solve industry problems with Google’s AI technology. Microsoft plans to invest $2.2 billion in cloud and AI infrastructure in Malaysia, Indonesia, and Thailand, the company announced in May.

Vanguard International Semiconductor, Hsinchu, Taiwan, announced last week that it is teaming with NXP Semiconductors, Eindhoven, Netherlands, to build a $7.8 billion semiconductor plant in Singapore. Vanguard is partially owned by Taiwan Semiconductor Manufacturing Company (TSMC), Hsinchu. The new plant will supply semiconductor chips for automotive, industrial, consumer, and mobile markets. Construction is planned to start in late 2024, with initial production expected to be available by 2027. Vanguard is a specialty contract chip maker that operates only 8-in. wafer fabs in Taiwan and Singapore. NXP is one of the largest chip suppliers to the automotive industry. The new facility will allow Vanguard to build its first 12-in. fab by leveraging TSMC technologies.

Company	Ticker	Exchange	2020 R&D billion$	5/31/24	6/7/24	5/31/24 to 6/7/24	1/1/22 to 6/7/24
Alphabet/Google	GOOGL	NASDAQ	27.303	173.93	175.95	1.16%	21.47%
Microsoft	MSFT	NASDAQ	17.198	415.6	423.85	1.99%	26.03%
Volkswagen	VWAGY	OTC	17.259	14.23	13.38	-5.97%	-6.80%
Apple	AAPL	NASDAQ	18.667	192.32	196.89	2.38%	10.88%
Meta Platforms	META	NASDAQ	13.874	467.29	492.96	5.49%	46.56%
Intel	INTC	NASDAQ	14.503	30.84	30.74	-0.32%	-30.19%
Johnson & Johnson	JNJ	NYSE	13.75	146.67	147.08	0.28%	-14.02%
Roche	RHHBY	OTC	14.143	32.01	33.55	4.81%	-35.00%
Merck	MRK	NYSE	11.381	125.54	130.67	4.09%	70.50%
Novartis	NVS	NYSE	9.387	103.13	105.33	2.13%	20.42%
Toyota	TM	NYSE	10.724	217.51	206.36	-5.17%	11.36%
Pfizer	PFE	NYSE	8.336	26.84	26.8	-0.15%	-6.15%
Alibaba	BABA	NYSE	6.006	78.34	78.4	0.08%	-34.00%
General Motors	GM	NYSE	6.727	44.99	45.72	1.62%	-22.02%
Honda	HMC	NYSE	8.806	33.92	32.2	-0.07%	10.18%
Ford	F	NYSE	9.34	12.13	12.15	0.16%	-41.50%
AbbVie	ABBV	NYSE	13.949	160.57	169.42	5.51%	25.13%
Sanofi	SNY	NYSE	7.75	49.03	48.98	-0.10%	-2.24%
Cisco	CSCO	NASDAQ	6.331	46.5	45.84	-1.42%	-27.66%
Bristol Myers Squibb	BMY	NYSE	7.13	41.09	41.48	0.95%	-33.47%
AstraZeneca	AZN	NYSE	6.056	78.02	80.02	2.56%	37.37%
IBM	IBM	NYSE	5.368	166.85	170.01	1.89%	27.20%
Oracle	ORCL	NYSE	6.928	117.19	125.92	7.45%	44.39%
Eli Lilly	LLY	NYSE	8.606	840.32	849.99	1.15%	70.72%
Stellantis	STLA	NYSE	5.309	22.27	21.85	-1.89%	-18.72%

Nvidia R&D Expansion

If Nvidia, located in Santa Clara, California, decides to establish a second R&D center in Taiwan, as previously announced, Taiwan’s Ministry of Economic Affairs (MOEA) announced that it requires that 50% of the engineers be recruited from outside Taiwan. Nvidia has already established an AI R&D center in Taipei, Taiwan, with subsidy support from MOEA’s “Pioneers for Innovation Leadership on Technology Program”. Nvidia is providing 25% of the computing power of the Taipei-1 supercomputer for use by academia and startups. Academic sources indicate that there was a controversy involving Nvidia poaching existing Taiwanese R&D talent for its R&D center. To address these concerns, Nvidia plans to hire 1,000 engineers for its R&D operations in Taiwan, half of whom will come from outside of Taiwan to avoid further poaching talent from local companies.

Talent challenges in life sciences

Life sciences companies will continue to face challenges in finding top R&D and manufacturing talent in 2024, according to a report released last week by CBRE, the large Dallas commercial real estate services and investment firm. The report describes U.S. life sciences job growth as sluggish and blames high interest rates as a culprit noting that unemployment in the sector is below 2%, compared to roughly 4% for all professions. According to the report, employment in the biotechnology R&D and pharmaceutical/medicine manufacturing industries has only grown 0.2% in the 21 months following June 2022.

R&D World Index Week Ending June 7, 2024 – Sectors

Category	5/31/24	6/7/24	5/31/24 to 6/7/24	1/1/22 to 6/7/24
ICT	1688.90	1740.56	3.06%	20.07%
Automotive	345.05	331.66	-3.88%	-2.99%
Biopharmaceutical	1585.06	1635.10	3.16%	59.02%

Industry acquisitions

Enterprise software giant SAP, Walldorf, Germany, announced last week that it will acquire digital adoption platform provider WalkMe, San Francisco, for $1.5 billion. WalkMe was initially founded in Israel and in May released WalkMeX, an AI-powered co-pilot that SAP intends to integrate with its own Joule copilot that it released in September 2023. The WalkMe acquisition will complement other SAP acquisitions over the past few years: Signavio and LeanIX.

China approves automated driving testing

China’s Ministry of Industry and Information Technology, Beijing, announced last week that it had approved a list of nine automakers, including manufacturers of trucks and passenger cars, whose automated driving technology can be tested on certain Chinese roads. BYD, NIO, and Chongqing Changan Automobile are on the list. This formal approval means automakers can test automated driving functions in certain areas in approved cities. Seven cities were approved including Beijing, Shanghai, Guangzhou, and Shenzhen. The automakers must conduct test and safety evaluations on the automobiles before they can test them on the road. This is the first time China has approved testing for level 3 and level 4 automated driving technologies in China. Both levels mean cars can go beyond assisted driving and make informed driving decisions with limited human intervention.

Volvo introduces battery transparency

Volvo Cars, Gothenburg, Sweden, announced last week that it is rolling out a new supply chain tracker that will allow customers to identify the source of key raw materials used in electric car batteries. The move comes amid increased scrutiny of the environmental and social impact of commodities used in the energy transition from internal combustion engines to electrically powered vehicles. Volvo worked with British technology firm Circulor, London, to create a first-of-its-kind electronic record or “battery passport” that contains verified data on raw materials, their origins, weight and size, the chain of custody of components, and recycled content inside the battery of its electric vehicles.

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.