This week in R&D: BMW & Toyota’s hydrogen EV alliance, Moderna’s R&D spending scrutinized, and Nvidia’s AI data center investment

Automotive R&D:

BMW and Toyota partner on hydrogen-fueled electric cars

BMW (Bayerische Motoren Werke AG), Munich, and Toyota, Toyota City, Japan, announced last week that they will partner to develop hydrogen-fueled electric cars. BMW said it will release hydrogen-powered versions of one of its existing model lines in 2028 as part of its strategy (which it shares with Toyota) to broaden its reach with various fuel types. These vehicles will use powertrains developed in tandem by the two companies. Hydrogen-powered cars run on hydrogen-generated electricity when it mixes with oxygen inside a fuel cell. Safety and hydrogen infrastructure are the main issues with these vehicles. BMW has crash-tested its vehicles and has had concept cars on the road for the past year.

 

Electronics R&D:

LEM International expands R&D facilities in Munich and Shanghai

Electrical measurement technology developer LEM International SA, Meyrin, Switzerland, announced last week that it had opened new R&D facilities in Munich, Germany, and Shanghai, China. The Shanghai facility is equipped with the latest in laboratory equipment technologies. In contrast, the Munich facility will focus on the design of application-specific integrated circuits (ASICs) and semiconductor technologies, which will support LEM’s innovations in integrated current sensors. These new facilities are built on LEM’s new advanced manufacturing technology site in Penang, Malaysia, and other R&D facilities in Lyon, France; Sofia, Bulgaria; and Geneva, Switzerland.

Microsoft’s Windows PCs face gaming compatibility snags with Qualcomm chips

Microsoft, Redmond, Washington, announced last week that Windows PCs equipped with Qualcomm Snapdragon chips face compatibility issues with some games. Microsoft’s Windows-based personal computers were rolled out this past spring with Copilot+, which includes functions such as creating AI-generated pictures and videos. However, instead of the Intel chips that have powered Microsoft Windows PCs for nearly four decades, the new PCs use Qualcomm chips that rely on U.K.-based Arm designs. However, the Qualcomm chips are incompatible with most PC games, including popular ones like “Fortnite” and “Valorant,” which are made to work with Intel’s x86 chip, which has been the standard for most PCs for decades.

Energy and infrastructure R&D:

Eaton to establish global application engineering center in India

Power management company Eaton, Dublin, Ireland, announced last week that it plans to establish a new $24 million global application engineering center in Chennai, India. The new facility will add to Eaton’s electronics manufacturing unit in Chennai and provide R&D solutions while offering engineering solutions that cater to Eaton’s global markets. India’s Department for Promotion of Industry and Internal Trade noted that Chennai had recently received investments for new facilities from Rockwell Automation, Hyundai, and Ohmium, among others.

Nvidia invests in Applied Digital’s AI data centers

Nvidia, Santa Clara, California, announced last week that it has invested in Applied Digital Corporation, Dallas, Texas, to support the development of AI-optimized data centers. Nvidia announced last week that it was investing in a $160 million financing round for Applied Digital, Dallas. Applied Digital operates data centers and is building a business leasing out computing power for AI. The company has started an AI cloud computing operation powered by Nvidia’s AI chips. The company expects the financing round to support its development of a significant data center project in North Dakota.

Pharmaceutical R&D:

Moderna’s high R&D spending prompts investors’ concerns

Moderna, Cambridge, Massachusetts, has been spending heavily on R&D, which has raised concerns among some investors about the company’s financial strategy. An economic analysis last week of the R&D spending by Moderna revealed that its annual $4.5 billion R&D spending is too high, and investors may want that investment trimmed. Moderna was among the first two U.S. companies to develop a COVID-19 vaccine. Its current R&D spending is roughly twice that of other similar pharmaceutical companies, according to analyst FactSet, Norwalk, Connecticut. Moderna reported in 2023 that it lost $4.7 billion and will lose another $3 billion in 2024. The company says it plans to break even in 2026. WSJ covered the news.

Global R&D and economic trends:

Eurozone economic growth slows in second quarter

The European Union’s statistics agency reported last week that economic growth in the 20 countries that use the euro currency slowed to 0.3% in the second quarter of 2024 from 0.4% in the first quarter. A report released last week by the European Union’s statistics agency revealed that the eurozone economy grew less rapidly in the three months through June 2024 than previously estimated. The combined gross domestic product (GDP) of the eurozone’s 20 members grew by just 0.2% in the second quarter from the first, having previously estimated output increased by 0.3%. The U.S. economy grew at an annualized rate of 3%, while a similar calculation had eurozone growth at just 0.8%. Investment and consumer spending fell sharply in the quarter, indicating the high interest rates were cooling demand. Exports and government spending mainly drove growth.

Saudi Arabia seeks increased R&D collaboration with Asian countries

Saudi Arabia has expressed interest in increasing R&D collaboration with Asian countries, particularly in renewable energy and advanced manufacturing. Saudi Arabia said last week that it sought greater R&D collaborations with Asian countries — specifically China — to increase its technology base. Saudi officials said their country could complement the Asian region in providing greater opportunities for relocating most of the manufacturing to Saudi Arabia with cooperation in R&D and innovation. The move to Saudi Arabia would solve the challenges of recent supply chain disruptions. Saudi Arabia is China’s largest trading partner — mostly in oil and gas products. The trade volume between the two countries reached more than $100 billion in 2023. Saudi Arabia has invested heavily in the multi-billion-dollar King Abdullah University of Science and Technology (KAUST).

Beijing Launches New Comprehensive Bonded Zone Focused on R&D

Last week, the Beijing municipal government announced the establishment of the Beijing Zhongguancun comprehensive bonded zone, which will focus on supporting R&D activities and international technology transfer. The Beijing Zhongguancun comprehensive bonded zone announced it had started operation last week. This zone is the first in China to feature R&D and innovation. It covers 660,000 m² of industrial space and is dedicated to strategic emerging and future-oriented sectors, including integrated circuits, pharmaceuticals, AI, and technology services.