1. Global Manufacturing Insights:

• US Manufacturing PMI (Oct): 47.8 (up from 47.3 in Sep), reflecting a continued contraction in manufacturing activity, though the decline is moderating.
• Eurozone Manufacturing PMI (Oct): 45.9 (up from 45.0 in Sep), signaling a prolonged downturn in output, with employment declining for the third straight month and business confidence hitting its lowest point in 2024.

2. Automotive Sector:

• CATL Freevoy Battery: The world’s first hybrid battery exceeding a 400 km range, adopted by Chinese EV brands like Li Auto, Geely, and Chery, marking a significant technological leap for hybrids.
• China NEV Sales (Oct): Expected to reach 1.15 million units (+49% YoY, +2.4% MoM). General passenger car sales in China are expected to hit 2.2 million units (+8.2% YoY, +4.3% MoM).
• China’s Auto Industry Profitability: Profit margins of Chinese automakers dropped below 5% in the first eight months of 2024, pressuring key suppliers like SiC and battery manufacturers.
• Europe’s Auto Market (Sep):
  • Total Registrations: Increased by 50% MoM to 1.17M, but down 4% YoY, recovering from the sharp 17% drop in August.
  • BEV Sales: Rose sharply, driven by subsidy expirations in the UK and France. HEV sales were up 12% YoY, while pure ICE vehicles fell 19%, dropping below 40% market share for the first time.
• China-European EV Trade Tensions: China is instructing its automakers to hold off on EU expansion plans amidst ongoing trade tensions regarding EV subsidies and potential tariffs (up to 35.3%) from the EU.

3. Semiconductor Sector:

• SiC (Silicon Carbide) Substrate Market: Rapid expansion by Chinese manufacturers has created an oversupply of SiC substrates, pressuring prices and threatening the market for 2025.
• Mature Semiconductor Processes: Capacity among the top 10 foundries is expected to grow by 6% in 2025, with Chinese foundries driving the bulk of this growth. China’s share in global mature process capacity is forecasted to exceed 25% by the end of 2025, especially in the 28/22 nm node.
• Intel’s Expansion in Ohio: Intel remains committed to investing $28 billion in two new fabs in Ohio, despite scrutiny around the release of $8.5 billion in federal grants under the CHIPS Act.
• TSMC (Taiwan Semiconductor Manufacturing Company): Achieved higher production yields at its Arizona plant than at comparable plants in Taiwan, marking significant progress for the U.S. semiconductor expansion effort. However, it has suspended shipments to a customer after discovering that a chip ended up in Huawei products, escalating tensions between TSMC and both Taiwanese and U.S. governments.

4. Major Company Highlights:

• Tesla: Tesla’s third-quarter profit was bolstered by sales of environmental regulatory credits. CEO Elon Musk expects vehicle unit growth of 20-30% in 2025, driven by lower-cost vehicles and advancements in autonomous driving technologies.
• GM (General Motors): GM raised its full-year profit forecast to $14-$15B (previously $13-$15B) after beating Q3 expectations. However, Q4 earnings are expected to dip due to lower truck production and vehicle mix.
• Mercedes-Benz: Mercedes’ profit margins have been squeezed due to fierce competition in China, with Q3 profitability dropping to 4.7%, the lowest since its separation from its truck business in 2021.
• Volvo Cars: While beating Q3 profit expectations, Volvo revised its full-year sales growth forecast to 7-8% (down from 12-15% projected in July), reflecting slowing demand in the high-end car market.

5. Consumer Electronics and Supply Chain:

• Smartphones (China Q3 2024): Smartphone sales rose 3.2% YoY, with Huawei surging 42% and iPhone slipping by 0.3%. This marks a notable shift in consumer preference, favoring domestic brands.
• Silicon Wafers: Global silicon wafer shipments are projected to decline by 2% in 2024, but a strong rebound of 10% is expected in 2025, as demand recovers from the downcycle.

6. Government and Regulatory Impact:

• CHIPS Act (US): The Biden administration finalized the 25% tax credit for semiconductor manufacturing, widening eligibility to include wafer producers and equipment manufacturers. This policy shift could also spur domestic solar wafer production.
• GM in Canada: GM voiced concerns over the Canadian government’s pullback on EV subsidies, citing potential challenges for consumers. As it stands, buyers can get up to C$12,000 in rebates, but Quebec and British Columbia are scaling back these incentives.
• Boeing (US): Boeing’s union workers rejected the company’s latest contract offer, leading to halted production for key commercial jets, including the 737 MAX.