Wk 10 Electronics Supply Chain Digest

Electronics Supply Chain Weekly Digest 3-7-25.

DATAPOINTS OF THE WEEK: S&P reported Feb Eurozone manufacturing PMI up ticked to 47.6, from 46.6 in Jan, marking a two-year high with production nearly stabilizing and new orders index bouncing to 47.7 from 45.4, its highest since May 2022. Germany’s PMI showed a similar improvement to 46.5 in Feb from 45.0 in Jan, marking a 25-month high.

ISM reported US Feb manufacturing PMI dropped slightly to 50.3 from 50.9 in Jan, signaling stagnation amid growing tariff concerns. New orders declined, while prices paid surged to a nearly three-year high, highlighting potential cost pressures and supply chain delays from tariffs on imports. Canada’s S&P PMI of 47.8 in Feb marked its first contraction in six months due to heightened trade tariff uncertainty.

China’s PMI rose to 50.2 in Feb vs 49.1 in Jan, its highest in three months, driven by stronger new orders and production, though external trade pressures remain a concern.

Headlines:

Auto/Transportation

• Trump suspends 25% tariffs on Canada, Mexico imports, but uncertainty remains
• Trump’s potential tariffs could worsen US car affordability crisis
• BYD Feb shipments surges 161% Y/Y, new record for overseas EV sales 
• BYD accelerates European expansion to counter EU tariffs, plans third factory and local battery production
• China’s preliminary passenger car sales rise 26% Y/Y in Feb, NEV sales exceed estimates, according to CPCAt
• Chinese EV makers face hurdles in Southeast Asia, including high prices, infrastructure gaps, and local competition
• Continental warns of weak 2025 market outlook, restructuring with plant closures and job cuts
• EU pushes to boost EV demand through corporate fleet incentives, targeting tax changes to shift from ICE vehicles
• EU grants carmakers three-year extension on 2025 CO2 emissions targets, easing pressure but raising concerns
• Ford’s US sales drop 9% Y/Y in February, but EV and hybrid sales grow 23%
• Automotive IC demand remains sluggish amid deepening tariff conflicts, according to DigiTimes
• Mercedes-Benz strikes deal for buy-outs and salary cuts in cost-cutting push to reduce production costs by 20% by 2030
• North American auto suppliers cut jobs and costs amid weak sales growth and EV uncertainty
• Tesla’s China-made EV sales drop 49.2% Y/Y in February; YTD China made shipments down 29%
• Tesla’s European sales drop 45% Y/Y in January, with steep declines in Germany, Scandinavia, and France
• Toyota launches its cheapest smart EV in China, aims to up market share
• Valeo sees €7.3B in canceled orders amid market uncertainty, expects €21.5-22.5B in 2025 sales
• VW unveils ID. EVERY1, its cheapest EV at $21k, to compete with budget models from rivals

Datacenter

• Amazon’s cloud business to invest $8.2 billion in Indian state in coming years
• Foxconn reportedly lands exclusive AI server orders for US Stargate AI project
• HPE lowers revenue forecast, cites US tariffs and announces 5% workforce reduction for cost savings
• Microsoft developing AI reasoning models to compete with OpenAI, The Information reports
• Wiwynn invests $300M in new Texas factory, expands domestic production with $243.1M investment in Taiwan

Industrial

• Boeing seeks plan B after fire destroys key supplier’s plant
• Tesla builds new megafactory in Texas for Megapack production, creating 1.5k jobs
• US factory orders rise 1.7% M/M in January, but tariffs pressure manufacturing recovery

IP&E

• Analysts forecast global copper deficit, rising prices, and potential US tariffs on copper imports by 2H25

Semiconductors

• ADI to end distribution agreement with WT Microelectronics
• Broadcom projects strong 2Q revenue, fueled by AI semiconductor growth and new hyperscale customers
• Trump wants to kill $52.7 billion CHIPS Act; 1/3 of staff terminated
• China pushes for adoption of open-source RISC-V chips to reduce reliance on Western technology
• Global semiconductor sales hit $56.5B in Jan, up 17.9% Y/Y, marking the highest-ever Jan sales, according to SIA
• Intel’s next-gen Panther Lake delayed: concerns over its in-house Intel 18A process node
• Nvidia and Broadcom testing chips on Intel manufacturing process, says Reuters
• Microchip announces layoffs and plant closures amid weak financial performance and declining sales
• Nvidia’s CoWoS orders reportedly face decline concerns as Hopper ends, market awaits gb300 boost
• CSPs pushing ODMs to ramp quantum computing efforts; Quanta and Foxconn seen investing
• onsemi offers $6.9B to acquire Allegro MicroSystems, but board rejects bid as inadequate
• Intense price competition leads to losses for major PCB players, prompting capital cuts and loan repayments
• SK Hynix exits CMOS image sensor business, shifts focus to AI memory amid market struggles
• TSMC announces $100B US expansion with 5 new chip facilities, but analysts expect 15% price hikes due to higher production costs
• TSMC’s US expansion to help America capture 22% of global advanced semiconductor market by 2030
• WT Microelectronics expects strong growth in auto, robotics, and AI sectors

Consumer/Other

• China’s imports tumble as demand skids, trade war heats up
• Compal Electronics boosts 2025 capex for server expansion, AI, and automotive electronics growth
• PC industry faces challenges with inflation, tariffs, and weak demand, projecting 7.9% Y/Y decline in 1Q25 notebook shipments