Edgewater Research: Electronic Component Weekly Digest - May 20

This weekly digest includes news summaries, survey results, channel insights, and report summaries from Edgewater Research.

Data Point of the Week: 

Auto inventory at U.S. dealer lots increased by 3% month-over-month in April, reaching 2.84 million units, according to Cox Automotive. This level is 49% higher than the 1.9 million units a year ago but still 20% below the pre-COVID average of 3.5 million units. Given current sales trends, days of inventory rose by two days month-over-month to 76 days. This supply level is considered normal, although it varies significantly by brand. Toyota, Lexus, and Honda have the lowest days of supply in the U.S. market at less than 46 days, while 15 brands have more than 100 days of supply. Stellantis brands collectively have double the industry average days of supply.

Auto:

• China asks carmakers to use up to 25% local chips by 2025.
• Ford to build 300,000 cars a year at its Spanish plant.
• Ford cuts battery orders as EV losses top $100,000 per car.
• Ford asks suppliers to cut costs to turn the EV business profitable.
• Germany's new car sales trend improved in April; xEV sales turn positive year-over-year for the first time since August 2023.
• Honda moves to cut its China workforce with voluntary layoffs.
• Honda and IBM to co-develop auto chips.
• Workers in the Mercedes plant in Alabama are voting this week on UAW representation.
• Mercedes halts development of the MB.EA large EV platform.
• The US suggests potential penalties if Chinese electric vehicle production moves to Mexico.
• Xiaomi delivers 10,000 SU7 EVs 43 days after the initial delivery.
• An EV adoption study suggests a surge in consideration in the second half of the decade.
• Tesla plans to establish a data center in China to support AI and self-driving ambitions.
• VW walks back its EV-or-Bust strategy as sales slow.
• VW and Renault end talks to develop affordable EVs.
• After three months of declines, new vehicle prices increased in April, says Cox.
• Toyota repeatedly halted production at its Mexico plant due to a worker shortage.

Industrials:

• Deere cuts its 2024 profit forecast as sliding farm income stifles demand.
• US manufacturing output unexpectedly fell in April.

Datacenter:

• Google unveiled its sixth-generation TPU for AI applications.
• Cisco sees inventory digestion ending by the summer and guides revenue better than expected.

Semiconductors:

• Arm plans to launch AI chips in 2025.
• Applied Materials' revenue results and outlook beat expectations; more than 40% of sales now come from China.
• Intel nears an $11 billion deal with Apollo for its Ireland factory.
• Samsung and SK Hynix abandon DDR3 production to focus on the high demand for HBM3.
• Biden's new China tariff wall faces leakage via Mexico and Vietnam.

Other:

• Biden increases tariffs on $18 billion in Chinese imports.