1. Global Manufacturing Outlook

• S&P Global Manufacturing PMI:
  • Eurozone: The PMI dropped to 44.8 in September, its lowest point in 9 months. Germany and France were the major contributors to this decline, with new orders and output falling sharply due to weaker global demand and supply chain challenges.
  • United States: PMI fell to 47.0, reflecting a significant contraction in manufacturing. This marks a 15-month low, with a 21-month low in new orders. Slowing growth in major sectors such as automotive and industrial equipment is behind this decline.

2. Automotive Market

• China:
  • Chinese auto dealerships recorded combined losses of 138 billion yuan (~$19.55 billion) in the first eight months of 2024 due to rising inventories and sluggish consumer demand. This resulted in dealers offering discounts of up to 17.4% to reduce high stock levels.
  • EV sales, while still strong, showed signs of deceleration. Local brands like BYD continue to dominate, although international brands face stiff competition.
• Europe:
  • Light vehicle production capacity utilization dropped to 60%, down from 70% in 2019, putting automakers under pressure to adapt to declining EV demand and tightening emission regulations. Automakers need at least 70% utilization for profitability, further complicating their operations.
  • EV sales in Europe continue to fall short of expectations, as consumer incentives decrease and high energy costs dampen enthusiasm.
• GM and Ford:
  • Both companies face potential restrictions on importing vehicles from China to the U.S. as part of the U.S. government’s efforts to reduce dependence on Chinese-made software and hardware in critical sectors such as automotive.

3. Electric Vehicle (EV) and Battery Sector

• Northvolt (Sweden):
  • Facing intense competition from Chinese battery manufacturers and slower-than-expected growth in EV demand, Northvolt announced a 20% workforce reduction and delays in expanding its battery manufacturing operations. Despite securing a $5 billion green loan, rising competition and slow production ramp-ups are creating financial pressures.
• Stellantis:
  • Italian labor unions organized a strike in response to Stellantis’ plan to reduce production in Italy by 33%. The automaker’s production volume is forecasted to drop from 751,000 units in 2023 to 500,000 units in 2024, reflecting slowing demand and efficiency measures in Europe.

4. Semiconductors and Tech

• Qualcomm:
  • Qualcomm is exploring the acquisition of parts of Intel’s PC design division, with a focus on integrating its ARM-based designs with Intel’s PC architecture to expand its product lineup.
• Intel:
  • Intel’s upcoming Xeon 6 platform and Gaudi 3 AI accelerators are set to launch in Q4 2024. Intel is also in talks to secure $8.5 billion in funding from the U.S. government to accelerate semiconductor manufacturing and AI infrastructure.
• STMicroelectronics:
  • STMicro released its 4th generation SiC MOSFET, optimized for EV architectures ranging from 400V to 800V. The company is expanding collaborations with Chinese automakers such as Li Auto and Geely to deepen its presence in the EV market. STMicro also noted that SiC partnerships will help them capture a larger market share in automotive traction inverters.
• SK Hynix:
  • SK Hynix began mass production of 12-layer HBM3E DRAM chips, increasing capacity by 50% compared to prior generations. These chips target high-performance AI applications, where the need for rapid data processing is driving innovation.

5. Datacenter and AI Infrastructure

• Google:
  • Google announced plans to invest $3.3 billion in building two new data centers in South Carolina, focusing on expanding its cloud computing and AI infrastructure capabilities. The investments will support growing demand for AI-powered services and traditional datacenter functions.
• Super Micro:
  • The U.S. Department of Justice has launched an investigation into Super Micro for potential accounting irregularities. This comes at a time when Super Micro has seen increased demand for its AI server products.

6. Industrial Sector

• Siemens:
  • Siemens announced plans to spin off its eMobility unit, which focuses on electric vehicle charging infrastructure. This move is intended to give eMobility more operational freedom to capture the growing opportunities in the EV charging market, projected to grow at a 30% CAGR over the next five years.

7. 300mm Fab Equipment Spending

• Global Spending:
  • Worldwide spending on 300mm fab equipment is projected to hit a record $400 billion between 2025 and 2027. China is expected to lead the investment in this space, with plans to invest over $100 billion in expanding fab capacity during this period. In 2024, spending on 300mm fab equipment is expected to rise 4% as companies ramp up production of advanced nodes and power semiconductors.

8. Company Announcements

• Vishay:
  • Vishay announced a restructuring plan that will result in 170 job cuts by 4Q25 and the closure of three manufacturing facilities by 2026. This includes a diode manufacturing facility in China. Vishay expects to save approximately $23 million annually through these measures, improving long-term profitability.