Electronics Supply Chain Weekly Digest 10-27-23.
DATAPOINT OF THE WEEK: S&P reported Eurozone Oct flash PMI of 43.0 vs. 43.4 in Sept signaling an accelerating downturn at the start of the 4th quarter with a steeper rate of contraction across orders and output. In Germany Oct flash mfg. PMI at 40.7 vs 39.6 in Sep indicated the contraction in the sector continued, albeit at a slightly less severe rate. For Japan S&P reported Oct flash mfg. PMI of 47.6 vs 48.7 in Sep indicating worsening conditions. For the US S&P reported Oct flash PMI of 50 vs. 49.8 in Sep, marking a 6-month high, and signaling a stabilization in operating conditions. S&P noted further improvement in supplier performance and still soft demand led firms to cut their input buying for the fifteenth month running in October.
Headlines:
Auto
- October China retail car sales flat M/M, +10% Y/Y; NEV up 1% M/M, 35% Y/Y
- Denso to invest $3.3B in semiconductors by 2030; to triple scale of its IC business by 2035
- More alarm bells for EVs with GM and Honda scrapping plans for $5B JV
- BP has ordered $100M of Tesla’s ultra-fast chargers
- New car sales in Europe up 11% in September; growth across all segments rapidly decelerating on weak BEV sales in Germany
- GM loses self-driving license in California; grounds entire fleet
- Ford and UAW reach tentative labor deal; UAW to use as a template against GM and Stellantis
- UAW expands strike to GM and Stellantis most profitable assembly plants
- Ford with weak 3Q results; removes full year outlook despite UAW deal; to delay $12B of previously announced EV investments
- Mercedes describes current EV market as “brutal”, pressuring car sales margins
- Hyundai wont delay EV launches but warns 2024 sales to be lower than expected
- Stellantis buys 20% of Chinese EV maker Leapmotor; gains rights to sell Leapmotor EVs outside China
- Tesla increased Model Y price in China by $2000 on Friday
- VW cuts profitability targets, notes EV order intake cut in half
- Automakers blast US plan to hike fuel efficiency rules
- US SAAR projected to inch higher M/M and Y/Y in October says Cox Automotive
Datacenter/Telco
- Apple plans to spend $1B per year on generative AI products
- US cloud spending showing signs of stabilization with Microsoft cloud sales reaccelerating in 3Q
- China rushes to swap Western tech with domestic options as U.S. cracks down
- Ericsson sees demand uncertainty stretching into 2024; notes demand from India was pulled forward in 2023
- Microsoft to invest $5B to build nine new datacenters in Australia
Semiconductors
- Asian Himax and Nexchip team up to supply ICs to the EV market
- GlobalWafers looking to acquire SiC and GaN companies
- Infineon has closed the acquisition of GaN Systems
- Intel reports better 3Q results; sees PC as bottoming; server sales uptick on ASP; FPGAs weaker
- Taiwan OSAT reportedly seeing mild increase in fab utilization to start 4Q
- onsemi completes the expansion of its SiC wafer facility in Korea capable of +80k WSPM
- onsemi and Renesas collaborate to improve performance and safety of autonomous vehicles
- Microchip doubles its Detroit Automotive Technology Center
- Nvidia to make Arm-based PC chips in major new challenge to Intel
- US administration updates export restriction rules for AI chips impacting Nvidia A800/H800
- Japanese semi equipment sales continue to deteriorate in Sep, declining 20% Y/Y
- China SiC wafer share expected to reach 50% in 2024 according to Asian reports
- ST Micro sees continued strength in Auto demand but notes weakness in Industrials
- TI surprisingly cuts wafer starts as inventory piles and outlook projects continued weakness
- TSMC founder warns US China tensions could slow global semi markets
- TSMC considering a $2B 12-inch fab in Singapore for automotive customers
- UMC sees wafer shipments down 5% in 4Q as PC and Mobile customers remains conservative while automotive demand turns more challenging
- Western Digital and Kioxia brake off talks to merge according to Nikkei
- Global wafer shipments to decline 14% in 2023 says SEMI
Consumer/EMS/Distribution
- Apple iPhone 15 selling far worse in China than predecessor according to two reports
- Global smartphone contracted by 8% to the lowest 3Q in a decade says Counterpoint