Electronics Supply Chain Weekly Digest 7-3-25.
DATAPOINT OF THE WEEK: S&P reported the June HCOB Eurozone manufacturing PMI at 49.5, up slightly from 49.4 in May, marking the second straight month of the slowest contraction since August 2022.
Signs of stabilization in the Eurozone are supported by production growing for the fourth consecutive month and longer delivery times, suggesting a pickup in demand despite headwinds such as US tariffs and Middle East tensions.
Germany’s HCOB manufacturing PMI rose to 49.0 in June from 48.3 in May, with new orders and output increasing for the third time in four months. In the US, S&P’s manufacturing PMI climbed to 52.9 in June from 52.0 in May, its highest level since May 2022, driven by the first output increase since February and a sixth straight month of rising new orders, reflecting stronger domestic and international demand. This contrasts with ISM’s June US PMI reading of 49.0, up modestly from 48.5 in May.
Meanwhile, China’s Caixin manufacturing PMI rebounded to 50.4 in June from 48.3 in May, beating expectations and diverging from the government’s official PMI of 49.7, which marked a third consecutive month of contraction. The Caixin increase was driven by stronger new orders and promotional activity, lifting output to its highest level since November 2024.
Headlines:
Auto/Transportation
- Audi holds US prices steady despite 19% Y/Y drop in 2Q deliveries and tariff pressure
- BYD hits record June sales of 377k vehicles but faces pressure to accelerate 2H growth amid price cuts and scrutiny
- BYD pauses Mexico EV plant amid US trade tensions, advances Brazil factory launch, according to Bloomberg
- Chinese automakers led by BYD and MG capture record 9% share of Europe’s hybrid and EV market in May, says Dataforce
- Chinese car dealers in Yangtze River Delta region call on automakers to reform sales strategies amid inventory and pricing pressures
- Only 15 of 129 EV and PHEV brands expected to survive in China by 2030, according to research from AlixPartners
- Preliminary CPCA data shows China’s NEV retail sales reached 1.07M in June, up 25% Y/Y
- Ford’s 2Q EV sales fall 31% Y/Y amid Mustang Mach-e safety halt and model transition shutdowns
- Geely announces plans to launch EV EX5 SUV and Super Hybrid PHEV in UK and Italy in 4Q
- Mercedes expects margin impact to be less than 3%, better than orginaly feared, according to Bernstein
- Renault to take €9.5B write-down on Nissan stake amid sales slump; financial guidance unchanged
- Rivian’s 2Q deliveries fall 23% Y/Y amid competition and tariffs; production limited ahead of 2026 model launch
- Stellantis warns of potential factory closures in Europe over up to €2.5B EU CO₂ fines amid unrealistic emission targets
- Stellantis’ US sales fall 10% Y/Y in 2Q despite Jeep and Ram growth; new CEO targets affordable models and promotions
- Tesla’s 2Q deliveries fell 13.5% Y/Y, marking a second straight quarterly drop and putting it on pace for another annual sales decline
- Toyota delays new US electric SUV production to 2028, shifts manufacturing to Kentucky to boost hybrid and gas SUV output
- US new vehicle sales rise in 2Q to 1.25M in June amid strong ICE demand and tariffs, says Wards Intelligence
- Volvo reports 12% Y/Y sales decline in June, EV sales drop 19% amid tariffs and weak demand
- Xiaomi CEO says EV exports won’t happen before 2027 due to strong domestic demand
Datacenter
- Global AI server shipments forecast to grow 24.3% in 2025, driven by NA CSPs and sovereign cloud investments, says TrendForce
- Microsoft announces plan to lay off 9k employees as AI infrastructure costs rise, impacting gaming and sales divisions
- OpenAI says no plans to use Google TPUs at scale, remains committed to Nvidia and AMD as it develops in-house chip, says Reuters
- OpenAI to rent 4.5GW of datacenter power from Oracle for Stargate project, according to DigiTimes
Industrial
- Senate passes modified Trump tax bill that eases clean energy cuts, but risks to renewables remain as House eyes deeper rollbacks
Semiconductors
- Advanced chipmaking capacity to double by 2028 as AI demand drives 14% CAGR in 7nm-and-below nodes, SEMI reports
- China’s $48B Big Fund III targets chip bottlenecks in lithography and design tools to counter US tech curbs, says DigiTimes
- Compal completes first phase of Poland auto electronics plant, with ECU production set for 2026 and ADAS to follow
- Intel’s may pivot from 18A to 14A process to win Apple and Nvidia, according to Reuters
- Samsung to resume P5 fab construction in Korea after two-year pause amid rising AI-driven memory demand, per DigiTimes
- TSMC to exit GaN wafer business by 2027, repurpose Fab 5 for advanced packaging amid China competition, according to Commercial Times
- US Senate raises semiconductor investment tax credit from 25% to 35% to boost domestic chip manufacturing, pending House approval
Consumer/Other
- Apple enters early prototyping of foldable iPhone, aiming for 2H26 launch despite foldable market challenges, per DigiTimes
- EU pushing for immediate tariff relief in key sectors in US trade talks ahead of July 9 deadline, warns of countermeasures, per Reuters
- Ex-China rare earth magnet demand surges amid Chinese export restrictions despite higher costs, according to Reuters
- President Trump says he does not plan to extend July 9 trade negotiation deadline, expresses doubt on deal with Japan
- US and Vietnam agree on trade deal cutting tariffs on Vietnamese exports to 20% and expanding US market access
