In this article, Electronics Sourcing spotlights key findings from Edgewater Research’s Electronics Supply Chain Weekly Digest.
ISM reported a US November manufacturing PMI of 48.4 v 46.5 in October reflecting a relative improvement with new orders returning to growth for the first time in seven months, while output increased M/M, though it remained in a contraction territory.
Similarly, S&P reported an improvement in manufacturing with a November PMI of 49.7 v 48.5 in October signaling a marginal decline in activity with new orders and output declining at a low pace and business optimism rising to a two and a half year high on hopes of improving economic conditions under the incoming administration.
Conversely, manufacturing activity in Europe worsened in November with S&P manufacturing PMI dropping to 45.2 from 46.0 in October reflecting steep contraction in Germany, France and Italy, marked by a sharp fall in new orders, employment and output.
In China, government manufacturing PMI rose to a five-month high of 50.3 in November v 50.1 in October reflecting rising export orders, output and business optimism. Similarly, Caixin’s private survey reported improvement in China, with the November PMI reading expanding to 51.5 from 50.3 in October.
The global foundry industry grew 27 per cent Y/Y and 11 per cent Q/Q in Q3 2024, driven by strong AI demand and recovery in China. China’s foundry growth outpaced the global market, with players like SMIC and HuaHong achieving utilization rates above 90 per cent, supported by demand recovery from domestic fabless customers and localization efforts.
Chinese foundries are aggressively expanding mature process capacity, intensifying competition as additional supply comes online by 2025. Meanwhile, global mature node utilization remains weak, with oversupply pressures impacting profitability in this segment.
