Wk 3 Electronics Supply Chain Digest

Electronics Supply Chain Weekly Digest 1-16-26.

DATAPOINT OF THE WEEK: Passenger car retail sales in China continued to weaken in December, declining 14.2% Y/Y but increasing 1.6% M/M to 2.26M units, marking the third consecutive month of Y/Y contraction, according to the China Passenger Car Association (CPCA).

December NEV retail sales remained positive, rising 2.7% Y/Y and 1.2% M/M to a record 1.34M units, exceeding the 1M level for a fifth consecutive month. This included BEV sales of 782k units (+2.6% Y/Y but -5.4% M/M) and PHEV sales of 555k units (+2.6 Y/Y and +12.3% M/M), marking first month of Y/Y PHEV growth since June. NEV exports totaled 273 k units, more than doubling Y/Y.

Headlines:

Auto/Transportation

• Audi sales slip 2.9% in 2025 as US tariffs and China competition weigh, Europe and emerging markets buoyed by EV growth
• Dark factories set to fully automate vehicle assembly by 2030, led by China and US automakers, says Auto News Europe
• China auto dealers urge manufacturers to manage inventory amid intense price wars severely impacting dealers’ profitability
• China EV sales expected to reach 19M in 2026 as NEV penetration rises to 54.7% and exports grow 4.3%, says CAAM
• Daimler Truck reported an 8% drop in global vehicle deliveries in 2025, selling ~420K trucks and buses, down from ~460k in 2024
• Ford develops custom HPC module to cut costs 10-15%, consolidate vehicle systems, and enable easier software upgrades
• Ford is in talks with BYD to purchase batteries for hybrid vehicles, potentially sourcing them from markets outside the US, says Reuters
• Global EV registrations rise 20% in 2025 to 20.7M, growth expected to slow to 15.7% in 2026, according to Benchmark Mineral Intelligence
• Mercedes and BMW China demand declining, with preliminary 2026 forecasts for locally produced models falling to near levels from a decade ago, according to CNEV Post
• Nexperia and Wingtech clash in Amsterdam court over control, mismanagement, and potential IP transfer to China, according to Reuters
• XPeng targets 550-600K vehicle sales in 2026, up 28-40%, while expanding into physical AI, robotaxis, and human robots, says Reuters
• US EV sales fall 46% Q/Q in 4Q25, total 2025 sales 1.28M; EV share set to rebound to ~8% in 2026 with new models and improved charging, says Cox

Datacenter

• Moody’s Ratings forecasts at least $3T will be invested in datacenter related infrastructure over the next 5 years, primarily driven by hyperscalers
• US AI datacenters face ~5-year power grid delays, prompting flexible connections and self-supplied capacity strategies to manage peak demand and speed approvals, says DigiTimes
• Ireland is working to reignite its datacenter investment by developing a new energy plan, aiming to attract major tech companies, says Bloomberg
• Microsoft announced its pledge to cover the costs of building and using electric grid infrastructure for its datacenters, aiming to prevent consumer anger over rising electricity bills
• OpenAI has signed a massive $10B deal with Cerebras to purchase up to 750MW of computing power over 3 years
• Thailand has approved multiple datacenter projects totaling $3.1B, signaling the country’s growing ambitions to become a leading technology hub in SE Asia, says Bloomberg

IP&E

• Amazon to source copper from Rio Tinto’s Arizona Nuton project for AI datacenters amid rising global demand
• PlayNitride and Brillink partner to develop green microLED optical interconnects for HPC and AI datacenters, says Optics News

Semiconductors

• ASML says China remains 8+ generations behind in EUV, expects 2026 revenue impact from China offset by demand in Taiwan, US, and South Korea
• Global 8-inch wafer capacity set to shrink 2.4% in 2026 as TSMC and Samsung cut output; Taiwanese foundries may raise prices 5%-20% amid steady demand, according to TrendForce
• Global semiconductor revenues set to top $1T in 2026, driven by 30.7% growth from AI demand in memory and logic ICs, according to Omdia
• Littelfuse has declared a price adjustment across its product line effective February 9, driven by escalating raw materials, labor, energy, and logistics expenses
• Nvidia H200 AI chip exports to China approved with 25% US tariff and strict limits, but Chinese authorities currently block imports despite high demand, says Reuters
• OpenAI is reportedly developing a self-designed AI chip called “Titan” using TSMC’s N3 process, with mass production expected in 2H26, per TrendForce
• SK Hynix to invest $12.9B in advanced chip packaging facility in Cheongju, South Korea, targeting completion by end of 2027 to meet rising HBM demand, according to Bloomberg
• SK Hynix unveils Multi-Site Cell NAND, enabling five-bit storage per cell and up to 25% higher die capacity without speed or endurance loss
• Global T-Glass shortage could last until 2027-28, with 20-30% supply gap and price hikes impacting HPC and AI chip production, says DigiTimes
• Taiwan launches $9.48B, 10-year program to build domestic silicon photonics ecosystem through multi-ministry collaboration, according to DigiTimes
• TSMC posts $16B profit, up 35% Y/Y on AI chip demand; plans $56B+ capex for Taiwan and US capacity expansion, with 2026 revenue growth near 30%
• TSMC buys $197M Arizona land for gigafab, plans 4-5 more US fabs under trade deal, aiming $100B+ investment for AI and HPC chips, according to The WSJ
• TSMC repurposes 40–90nm capacity at Hsinchu Fab 14 for AI and chiplet packaging, shifts some mature-node production to Singapore to free Taiwan 2nm–3nm lines, says The Commercial Times
• Unigroup Guoxin to acquire WeEn Semiconductors, boosting power semiconductor capabilities and automotive electronics integration, according to DigiTimes
• US-Taiwan trade deal cuts semiconductor tariffs, spurs $250B+ Taiwanese investment, targets 40% supply chain shift to US
• WUS Printed Circuit to invest $300M in high-density optical-electrical PCBs for AI, HPC, and networking, starting with $100M pilot for advanced packaging and CoWoP/mSAP technologies

Consumer/Other

• China’s rare earth exports hit ~63K tons in 2025, up 12.9% Y/Y, despite export restrictions; December shipments fell 20% M/M but remained 32% higher Y/Y
• Japan moves to cut reliance on Chinese rare earths through stockpiling, seabed extraction, G7 partnerships, and domestic commercialization by 2030
• Smartphone production set to fall 7% in 2026 on memory shortages, higher prices, and weak demand, with major adjustments expected mid-year, according to TrendForce
• US lawmakers propose $2.5B Strategic Resilience Reserve to stockpile critical minerals, stabilize prices, and counter China’s influence to support domestic producers