Electronics Supply Chain Weekly Digest 12-01-23.
DATAPOINTs OF THE WEEK: S&P reported Nov Eurozone mfg. PMI of 44.2 vs 43.1 in Oct marking a continued contraction in activity though the pace of decline improved to a 6-month high. S&P noted new orders, purchasing activity and output declined M/M but at a smaller pace while employment cuts intensified to the sharpest pace since August 2020 indicating a subdued outlook. Manufacturing activity in Germany remained among the weakest in Europe though Nov PMI improved to 42.6 vs 40.8 in Oct. In China, the private Caixin PMI unexpectedly rose to 50.7 in Nov vs 49.6 in Oct. That was the fastest expansion in three months but stands in stark contrast to the official government mfg. PMI for Nov which fell to 49.4 from 49.5 in Oct. In the US, S&P and ISM mfg. PMI readings were unchanged M/M at 49.4 and 46.7 respectively, reflecting relative improvement in new orders but worsening pace of decline in output and employment.
Headlines:
Auto
- ChargePoint guided 4Q 30% below expectations on weakening demand for EV charges in N.A. and Europe
- China Auto retail sales remained strong in November; xEV projected up 3.6 M/M and 36% Y/Y, all vehicles projected at +2.3% M/M
- BYD announced new price cuts and incentives in December
- 3Q global xEV sales increased 28% says TrendForce with Tesla and BYD in a close race for number one
- US to temporarily exempt some Chinese materials from rules limiting EV tax credits
- EVs struggle with reliability due to charging, battery issues – Consumer Reports survey
- BEV to rise to 20% of mix in Europe in 2024 says ACEA
- Two Chinese EVs become finalists for European Car of the Year 2024
- Fisker scales back production to divert cash for working capital
- GM said UAW deal to add $9.3B or $575 per car; vowes to cut EV production cost in 2024 on higher volume; increases dividend and outlines $10B stock buyback
- Ford said UAW deal would add $8.8B or $900 per car in costs
- VW to develop entry-level EV for China with more local components
- VW to reduce headcount at VW brand in effort to drive $10B in savings
- Tesla sues Sweden over blocked license plates
- Tesla raised Model Y prices by $200 in China for the fifth time in the last month
- Tesla’s Cybertruck starts at $60,990, or 50% higher than previously touted by Elon Musk
- Toyota to sell 10% of its stake in Denso
- Toyota reported record global production in October
- Toyota partially suspends production in Chinese JV due to weak ICE sales and increased competition
- US Nov car sales projected to increase 6.5% Y/Y but SAAR down from Oct according to Cox
Datacenter/Telco
- Amazon unveiled new internally developed AI GPU and CPU chips
- HPE provided weaker 4Q outlook; sees growth 2H weighted growth in 2024 on $2.4B in AI orders
- Dell 3Q PC sales disappoint while server sales edge 9% higher on $500M in AI shipments
Industrials
- ABB raised its LT revenue growth outlook to 5-7% from 3-5% previously
- Deere forecasted 2024 revenue below expectations on higher cost, interest rates denting demand
Industrials
- Destocking in key markets like Germany and China to drive slower growth in Siemens 2024 sales
Semiconductors
- Amkor to build $2B back-end facility in Arizona; Apple to be first and largest customer
- US to allocate $3B of CHIPS Act for back-end subsidies
- BYD Semiconductor completes phase 1 of power device and sensor facility in China; aiming for $1.8B in output upon completion of all three phases
- China foundries considering further price reduction says DigiTimes
- Germany shelves 2024 budget talks; may not meet subsidies commitment to semi manufacturers like Intel and TSMC
- Micron upgraded its FY1Q outlook on improved pricing
- Marvell reported in-line results but CY4Q outlook missed expectations as weakness in Enterprise Networking, Consumer and Auto/Industrial offset AI strength in Datacenter
- NXP announced next gen UWB IC for Auto applications
- 3Q23 global semi equipment sales declined 11% Y/Y despite 42% growth in sales in China for mature technologies
- WSTS (SIA) forecasts 13% growth in 2024 global semi sales; +6.5% ex memory
- TSMC to reportedly reduce mature tech prices by 2% in 2024 according to reports from Asia
- TSMC considering a third fab in Japan
- TI shuts down MCU R&D team in China moving activity to India
- TI announced expansion of GaN portfolio; says new products enable AC/DC power adaptors to shrink 50% in size
- Qualcomm shelves plans to use Samsung Foundry for 3nm SoCs; to rely exclusively on TSMC in 2024
Consumer/EMS/Distribution
- Apple has stopped development of 5G baseband chips intended to replace Qualcomm
- Foxconn plans $1.5B in capacity expansion in India for smartphone production
- Jabil cuts its current quarter and FY24 outlook citing softening in end demand across all markets due to inventory correction at customers
- IDC projects smartphone shipments returning to growth in 4Q; forecasts 2024 shipments increasing 3.8%
- Mixed reads from Adobe and Mastercard on consumer spending during Black Friday and Cyber Monday in the US