This week in R&D: AMD puts R&D centers in Taiwan cities, Northvolt relocates battery operations to its Sweden R&D center

The R&D World Index (RDWI) for the week ending August 23, 2024, closed at 3,947.43 for the 25 companies in the RDWI. The Index was up 1.78% (or 68.94 basis points).

Twenty-two RDWI members gained value last week from 0.11% (Meta Platforms) to 7.23% (Ford Motor). Three RDWI members lost value the previous week from -0.40% (Microsoft) to -2.53% (Bristol-Myers Squibb).

AMD locates R&D centers in Taiwanese cities and buys server company

Advanced Micro Devices (AMD), Santa Clara, California, announced last week that it has chosen to locate its new R&D centers in Tainan and Kaohsiung, both major cities in Taiwan, as part of the company’s $270 million project to advance its development of cutting-edge technologies, such as AI and silicon photonics. AMD did not comment on why it chose two sites rather than one. Tainan is a central manufacturing hub of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract semiconductor manufacturer and the birthplace of AMD CEO Lisa Su. While its leading manufacturing is located near its headquarters in Taipei, TSMC is also building a new fab in Kaohsiung to produce next-generation 2-nanometer chips. AMD is the latest semiconductor manufacturer seeking to develop its R&D centers in Taiwan under Taiwan’s A+ global R&D and innovation partnership program. AMD was granted a $104 million subsidy by Taiwan in July 2024, which is about 38% of AMD’s investment over three years.

AMD also announced last week that it is buying a server company but has no plans to enter the server business. AMD will spend $4.9 billion to acquire ZT Systems, Secaucus, New Jersey. AMD said it will seek a buyer for ZT’s manufacturing business once the deal closes. AMD will get about 1,000 world-class design engineers with deep expertise in motherboard, power, thermal, networking, and rack design. This will put AMD in a competitive position with Nvidia and allow it to design complete AI systems.

Northvolt moves battery technology development to its R&D hub in Sweden

Battery maker Northvolt, Stockholm, Sweden, announced last week that it will consolidate operations, shifting lithium-metal battery technology development to its R&D hub in Vasteras, Sweden, from California. The move reflects a strategic move to consolidate the R&D and industrialization of its cell product portfolio in one location. Northvolt acquired California battery technology company Cuberg in 2021, which has grown nearly 10-fold since then and focused on developing lithium-metal battery technology.

Bangkok technical institute opens semiconductor R&D Center

King Mongkut’s Institute of Technology Ladkrabang (KMITL), Bangkok, Thailand, announced the opening of its semiconductor technology R&D center last week. The KMITL Academy of Innovative Semiconductor Manufacturing will function as a central laboratory, uniting experts from diverse fields to collaborate on semiconductor research, innovation, and electronic manufacturing processes. Thailand has the potential to position itself as a stable alternative semiconductor manufacturing hub to other countries without that stability.

Ford rethinks electric SUV

RDW Index member Ford Motor, Dearborn, Michigan, announced last week that it is canceling plans for a large electric sport utility vehicle (SUV) and expects to take $1.9 billion in related special charges and write-downs. Ford said it is scrapping plans for the three-row electric SUV, citing tough pricing pressure as they and other automakers resort to aggressive discounts to move their fully electric vehicles (EVs). Ford said it would change its introductions by offering hybrid gas-electric versions of future large three-row SUVs, including Ford’s Explorer and Expedition nameplates. The company said it will trim its capital spending on fully electric vehicles to about 30% of its development budget from its current 40%.

PG&E still grappling with fire risk

Pacific Gas & Electric Corporation (PG&E), Oakland, California, reported to state regulators last week that it had 62 ignitions in high-threat fire areas this year, compared with 65 for 2023. Twenty-nine of these fires occurred in recent weeks following an early July heat wave. Utilities must report ignitions caused by their equipment when flames travel more than one meter from the ignition point. In July, PG&E established a task force to evaluate the problem and determine how to address it quickly before fall 2024, when strong offshore wind patterns increase wildfire risks. The company has been working to clear vegetation beneath 50,000 utility poles and install equipment to better monitor power-line disruptions.

Lilly gains Zepbound momentum

RDW Index member Eli Lilly & Co., Indianapolis, reported last week that its anti-obesity drug Zepbound significantly reduced the risk of Type 2 diabetes among people with excess weight and elevated blood sugar levels. This study widens the list of additional health benefits beyond weight loss for a hot new crop of anti-obesity drugs. Other drugs were found to reduce the risk of heart attacks and strokes, while Zepbound eases the severity of obstructive sleep apnea. The growing list of health benefits could boost sales and convince health insurers to pay for the expensive medicines, which initially costed more than $1,000 per month. Lilly may be open to reconsidering pricing, however. On August 27, the company announced that would be slashing the cost of the drug for patients paying out of pocket.

Stellantis delays Illinois assembly plant

RDW Index member Stellantis, Hoofddorp, Netherlands, announced last week that it would delay its plans for an assembly plant in Belvidere, Illinois, and added that it remains committed to the endeavor that it made with the United Auto Workers union. The recent UAW agreement ratified four-year contracts, which secured the return of cost-of-living adjustments, a 25% base wage increase, and the right to strike over plant closures.

Company	Ticker	Exchange	2020 R&D billions$	08/16/24	08/23/24	8/16/24 to 8/23/24	1/1/22 to 8/23/24
Alphabet/Google	GOOGL	NASDAQ	27.303	164.74	167.43	1.63%	15.59%
Microsoft	MSFT	NASDAQ	17.198	418.47	416.79	-0.40%	23.93%
Volkswagen AG	VWAGY	OTC	17.259	10.46	10.80	3.25%	-63.01%
Apple	AAPL	NASDAQ	18.667	226.05	226.84	0.35%	27.75%
Facebook/Meta	META	NASDAQ	13.874	527.42	528.00	0.11%	56.98%
Intel	INTC	NASDAQ	14.503	20.87	20.54	-1.58%	-60.12%
Johnson & Johnson	JNJ	NYSE	13.750	159.39	164.13	2.99%	-4.06%
Roche Holdings AG	RHHBY	OTC	14.143	40.56	41.71	2.84%	-19.31%
Merck & Co.	MRK	NYSE	11.381	113.67	116.60	2.58%	52.14%
Novartis	NVS	NYSE	9.387	114.70	118.56	3.37%	35.54%
Toyota	TM	NYSE	10.724	182.67	185.09	1.32%	-0.11%
Pfizer	PFE	NYSE	8.336	28.30	28.90	2.12%	-51.06%
Alibaba	BABA	NYSE	6.006	83.18	85.41	2.68%	-28.10%
GM	GM	NYSE	6.727	45.32	48.57	7.17%	-17.16%
Honda	HMC	NYSE	8.806	31.72	32.69	3.06%	14.90%
Ford	F	NYSE	9.340	10.51	11.27	7.23%	-45.74%
AbbVie	ABBV	NYSE	13.949	193.90	197.55	1.88%	45.90%
Sanofi SA	SNY	NYSE	7.750	54.07	56.21	3.96%	12.20%
Cisco	CSCO	NASDAQ	6.331	49.46	50.74	2.59%	-19.93%
Bristol-Myers Squibb	BMY	NYSE	7.130	49.36	48.11	-2.53%	-22.84%
Astra Zeneca PLC	AZN	NYSE	6.056	84.41	86.66	2.67%	48.77%
IBM	IBM	NYSE	5.368	193.78	196.10	1.20%	46.72%
Oracle	ORCL	NYSE	6.928	137.47	139.19	1.25%	59.60%
Eli Lilly & Co.	LLY	NYSE	8.606	922.12	952.74	3.32%	242.29%
Stellantis NV	STLA	NYSE	5.309	15.89	16.80	5.73%	-14.20%