Edgewater Research: Electronic Supply Chain Weekly Digest

Important Disclosures in the Appendix

A weekly collection of news summaries, survey results and channel insights, and report summaries from Edgewater Research

DATAPOINT OF THE WEEK:

S&P reported December Eurozone mfg PMI of 44.4 vs 44.2 in November marking an 18^th consecutive month of contraction. The data reflects a continued decline in new orders and output as well as employment. China’s government official mfg PMI fell to 49.0 in December from 49.4 in November, marking a third straight month of contraction. In contrast, the private Caixin China PMI rose to 50.8 in Dec (Nov: 50.7), to the strongest level since August, reflecting increases in output and new orders but a decline in Employment. In the US, S&P reported Dec mfg activity declined sharply with PMI of 47.9 vs 49.4 in November, reflecting an accelerating decline in output, new orders, and employment. ISM reported Dec PMI of 47.4 vs 46.7 in Nov reflecting a worsening decline in new orders, offset by an uptick in output and a slower pace of employment decline. In Japan, Dec mfg PMI slipped to 47.9 from 48.3 in November, to the lowest level in 10 months, reflecting lower export and domestic demand with acute weakness noted in the electronics sector per S&P.

Headlines:

Auto

• BYD sold 3.02 xEVs globally in 2023; 4Q BEV sales exceeded Tesla’s for first time
• NEV retail sales in China finished the year strong increasing 46% Y/Y and 11% M/M in December
• Starting Jan 1^st, NEVs above $42,000 are no longer tax-exempt in China
• GM sold 75.8K EVs in 2023; said it would offer $7,500 incentive for EVs that lost US Gov tax credit beginning Jan 1
• Germany car sales finished 2023 on a soft note; Dec sales down 23% with xEVs down 58% Y/Y
• The number of EVs qualifying for US tax credit fell from 43 to 19 on Jan 1
• Italian government considering $1B plan to encourage adoption of EVs
• Rivian 4Q deliveries declined 10% Q/Q, missing expectations
• Hyundai and Kia project global combined sales to increase 2% in 2024
• Tesla 4Q shipments met expectations but Tesla lost global leadership to BYD
• Toyota xEV shipments increased 30% and accounted for 29% of sales in the US in 2023
• Cox Automotive projects return to normality in 2024 with US SAAR projected
• VW to delay ID 2 volume production to 2026 amid weaker Euro 7 rules
• Automakers ask for tax cut as U.K. electric-car sales stall

IP&E

• Taiyo Yuden announced the start of production at its new MLCC factory in Changzhou

Semiconductors

• ASML forced to cancel DUV deliveries to China under pressure from the US and Dutch Governments
• ROHM has completed acquisition of Solar Frontier plant asses in Japan; planning SiC production
• Several semi and IP&E facilities have temporarily stopped production in Japan to assess and manage the impact of the earthquake on Jan 1
• Mobileye guides 2024 revenue down Y/Y, citing inventory build-up of ADAS SoC at tier 1 customers
• Microchip announced as a recipient of $162M CHIPS Act Grant for facilities in Colorado and Oregon.
• Samsung to delay mass production in new wafer fab in Texas
• Global semi capacity to increase 6.4% in 2024 with discrete and analog capacity projected up 7%/10% according to SEMI

Other

• Foxconn guides to seasonal 1Q demand and continued decline Y/Y
• Spot container shipping rates soar 173% on Red Sea threatsear