Electronics Supply Chain Weekly Digest 6-6-25.
DATAPOINT OF THE WEEK: S&P reported May HCOB Eurozone mfg PMI reached 49.4, up from 49.0 in April, marking the slowest contraction in the manufacturing sector since August 2022, supported by production growth across all four major Eurozone economies, though the risk of a possible increase in US tariffs on EU imports casts a shadow over the outlook.
Germany’s HCOB mfg PMI declined slightly to 48.3 from 48.4 in April, and below preliminary flash PMI of 48.8. Despite the decrease, German production has seen broad based improvement for three straight months, though there is slight concern this growth may be tied to rush orders from the US.
S&P US manufacturing PMI surged to 52.0 in May, up from 50.2 the prior two months, supported by a rise in new orders and record-high input inventories as customers front-ran tariff-driven price increases and supply disruptions. S&P’s US results contrast that of the ISM who’s May mfg PMI is 48.5, a decrease from 48.7 in April.
Caixin China mfg PMI fell to 48.3 in May, down from 50.4 in April indicating the first contraction in eight months as output, new orders, and export demand all declined amid weaker market conditions. Manufacturing output and new orders both fell for the first time in 19 months, while export orders contracted at the fastest pace since September 2022. The 48.3 result is broadly in line with the Chinese government’s official PMI that showed factory activity fell for a second month.
Headlines:
Auto/Transportation
- China summons EV makers over unsustainable price war, according to Bloomberg
- Preliminary CPCA data shows China NEV retail sales continue to grow +30% y/y in May, topping 1M for first time this year
- China rare earths export suspension disrupts global auto supply chains, forcing factory idling in US and halting European production
- China vehicles sales in UK make up 9.4% of total sales in May, led by BYD surge and new entrants
- Germany EV policy unlikely to boost adoption, industry warns, as tax break excludes households and leasing firms
- Nio to cut R&D spending by up to 25% in push for break-even by Q4, with savings expected to show in Q2
- Tesla pressure in China continues as May sales fall for eighth straight month, according to preliminary CPCA data
- Tesla loses ground in Europe as May sales slump despite EV market growth, says Reuters
- Tesla holds off on India manufacturing, eyes imports amid policy shift
- US light vehicle SAAR drops sharply in May to 15.65M after pre-tariff buying surge, according to Wards Intelligence
Datacenter
- AWS expands in Taiwan with new APAC region and $5B investment
- HPE beats revenue estimates in 2Q, sees limited tariff impact and AI systems revenue hits $1B
- Microsoft cuts 300+ more jobs following largest layoffs in years last month
Industrial
- Airbus deliveries fall 4% Y/Y in May amid supply delays and airline pressure, according to Reuters
- Germany manufacturing new orders rise on strong electronics demand, according to Destatis
- Global energy investment to hit record $3.3 Trillion in 2025 led by clean energy, says the IEA
- US solar policy setback as subsidies for leasing companies end in budget bill
Semiconductors
- Broadcom launches Tomahawk 6 chip with improved performance for AI datacenters
- Broadcom forecasts 3Q revenue slightly above estimates driven by AI data center demand
- China’s largest SiC wafer plant launches in Wuhan, aiming to supply 30% of domestic output
- Globalfoundries plans $1.26B investment to nearly double wafer fab capacity in Dresden
- Global semiconductor market forecast to grow 11.2% in 2025 led by AI and cloud demand, according to WSTS
- Huawei doubles down on semiconductor investments to build self-reliant chip supply chain amid US sanctions, according to Nikkei
- OpenGMSL Association, led by Analog Devices, formed to set global SerDes standard for automotive video and data transmission
- Renesas reportedly exiting SiC business amid slower EV demand and Chinese competition, according to DigiTimes
- Samsung partners with Infineon and NXP to develop next-gen automotive chips, according to TrendForce
- SiC power semiconductor market faces pressure from weak EV demand and China’s low-cost production strategy, says DigiTimes
- STMicro to cut 5K jobs over three years amid restructuring and local resistance in Italy
- STMicro sees market upcycle as order momentum strengthens, led by China demand
- TSMC delays second Kumamoto fab as traffic congestion hampers construction timeline, according to CNA
- US CHIPS Act grants under review as Trump administration seeks better returns for taxpayers
- Wolfspeed faces financial strain amid CHIPS Act delays and EV slowdown, foreign buyout unlikely
Consumer/Other
- EU targets critical raw material independence with 13 global projects under 2030 supply plan
- Counterpoint Research cuts global smartphone sales outlook as tariff concerns weigh on 2025 forecasts
- US critical mineral policy shift as Trump eyes Defense Production Act to fast-track supply chain
- US steel and aluminum tariffs doubled to 50% in push for national security and manufacturing boost