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Edgewater Research: Electronics Supply Chain Weekly Digest 10-27-23

Dennis Reed
|  Created: October 29, 2023  |  Updated: July 1, 2024
|  Open as PDF
Important Disclosures in the Appendix

 

Edgewater Research

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

 

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
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About Author

About Author

Dennis Reed is a Senior Research Analyst in Technology. Dennis started in the industry in 2005 at FTN Midwest Research on the technology & semiconductor team. In 2006, he was a founding member of Cleveland Research Company and continued to develop and extensive network of technology industry professionals in the semiconductor, distribution, memory and HDD industries throughout the world. Dennis worked at KeyBanc Capital markets in New York, on teams covering Consumer Staples and Paper & Packing companies. Dennis also brings wide level of experience working in various roles with Travelers Insurance, including Market Research and various product roles supporting business unit growth in targeted end markets. Dennis is a 2002 graduate of Ohio University with a major in Sports Management.

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