In response to persistently low sales and failure to meet production targets, Japanese automaker Mitsubishi Motors has announced its exit from local car production in China. The company has also revealed plans to invest up to 200 million euros in Renault’s EV venture, Ampere.

Mitsubishi Motors made this announcement in a press release following a board meeting on the 24th, which includes terminating production of Mitsubishi-branded vehicles in China.

The company cited the rapidly changing market of the Chinese automotive industry over the past 2-3 years, with a swift transition to EVs and significant shifts in consumer brand preferences. Despite launching a new model in December 2022 in an effort to boost sales, Mitsubishi struggled to meet its sales targets. Furthermore, the joint venture, GAC Mitsubishi Motors, has suspended operations at its Changsha plant in Hunan province since March 2023 to adjust inventory.

GAC Mitsubishi Motors is a company jointly established by Mitsubishi Motors, Mitsubishi Corporation, and Guangzhou Automobile Group (GAC Group), operates the Changsha plant, the sole new car production facility in China for Mitsubishi Motors. The company will transfer its entire shareholding in GAC Group, which ends Mitsubishi’s involvement in the local production of Mitsubishi-branded vehicles in China. Following this, GAC Mitsubishi Motors will become a wholly-owned subsidiary of the Guangzhou Automobile Group, and its EV brand, Aion, will continue to utilize the Changsha plant.

Mitsubishi Motors stated that it will maintain cooperation with Mitsubishi Corporation and the GAC Group to provide after-sales service to customers. As for the structural reform measures, the company anticipates recognizing a special loss of 24.3 billion yen in the fiscal year 2023 (April 2023 – March 2024) financial statements. However, this special loss has been partly factored into the previously announced financial forecast for the fiscal year and will not result in any changes at this stage.

Mitsubishi Motors currently estimates that its consolidated revenue for the fiscal year will increase by 13.1% year-on-year to 2.78 trillion yen, while its consolidated operating income will decrease by 10.8% to 170 billion yen and consolidated net income will decrease by 34.8% to 110 billion yen.

Furthermore, on the 24th, Mitsubishi Motors announced its investment in “Ampere,” the EV venture established by the Renault Group. The investment could reach a maximum of 200 million euros. Mitsubishi Motors intends to strengthen its EV research and development and expand its EV product lineup through this partnership. The company will procure EVs developed and produced by Ampere for sale under its Mitsubishi Motors brand, initially targeting the European market.

Ampere is a separate entity formed by Renault for its EV business, with plans to go public in 2024. Besides Mitsubishi Motors, Nissan has also committed to a maximum investment of 600 million euros in Ampere, and semiconductor giant Qualcomm has expressed its intention to invest as well.

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• [News] Mitsubishi Motors Ceases Car Production in China, Possible Takeover by GAC Aion

(Image credit: GAC Mitsubishi Outlander 2022)

Nvidia has announced that the White House’s embargo on exporting advanced artificial intelligence (AI) chips to China will take effect earlier than anticipated, with no expected significant impact on the company’s short-term earnings.

On October 24th, Nvidia issued an announcement through the U.S. Securities and Exchange Commission (SEC), stating that the U.S. government had notified that the temporary final rule of October 18, titled “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections,” would be immediately enforced. This rule is applicable to products related to data centers with a “total processing performance” of 4800 or higher. Nvidia’s affected products include A100, A800, H100, H800, and L40S.

Nvidia clarified that the originally scheduled implementation of the authorization provisions would have occurred 30 days after the regulations were issued on October 17. Given the strong global demand for Nvidia products, the early enforcement of the U.S. government’s authorization provisions is not expected to significantly affect its financial reports in the near future.

According to Reuters, Advanced Micro Devices (AMD), which is also impacted by the White House’s export ban, did not respond to media inquiries, and the U.S. Department of Commerce declined to comment.

Bernstein analyst Stacy Rasgon had previously noted that AMD’s current AI chip “MI250” on the market may also face constraints due to the latest restrictions, and the forthcoming “MI300” could encounter challenges.

Intel, which began selling the “Gaudi 2” chip in China in July 2023, stated that the company is “reviewing the regulations and assessing the potential impacts.” Intel had previously developed a specialized version of Gaudi 2 to comply with the advanced chip export ban imposed by the Washington authorities in 2022.
(Image: Nvidia)

According to the World Energy Outlook (WEO) 2023 released by the International Energy Agency (IEA) on Tuesday, the significant rise of clean energy technologies, including solar, wind, electric vehicles, and heat pumps, is reshaping the way factories, vehicles, household appliances, and heating systems are powered.

As per the latest WEO report, in 2020, only 1 out of every 25 cars sold was an electric vehicle; three years later, the ratio increased to 1 out of every 5 cars. By 2030, the number of electric vehicles on the road globally is set to nearly increase tenfold. Solar photovoltaic power generation is projected to exceed the entire electricity generation capacity of the United States. The share of renewable energy in the global power structure is expected to rise from its current level of around 30% to nearly 50%. Global sales of heat pumps and other electric heating systems will surpass those of fossil fuel boilers. Investment in new offshore wind projects will be three times that of new coal and gas-fired power plants.

IEA notes that this growth in green energy is based solely on the current policy plans of governments worldwide. If nations can fulfill their national energy and climate commitments in a timely and comprehensive manner, the progress of clean energy will be even more rapid. However, stronger and more forceful measures will need to be taken globally to have a chance of achieving the goal of limiting global temperature rise to 1.5 degrees Celsius.

WEO scenarios based on current policy settings reveal that the increasing momentum behind clean energy technologies, coupled with global structural economic shifts, is significantly impacting fossil fuels. There is a chance that global demand for coal, oil, and natural gas will peak in 2030.

In this scenario, the share of fossil fuels in the global energy supply may drop from around 80% in recent decades to 73% by 2030, and global energy-related carbon dioxide emissions are expected to peak in 2025.

Fatih Birol, the Executive Director of the IEA, emphasizes that the transition to clean energy is an unstoppable global phenomenon and the sooner, the better, for everyone.

(Image credit: Tesla)

As reported by Taiwanese media, there’s a gradual uptick in TSMC’s capacity utilization lately, accompanied by a noticeable surge in orders from TSMC’s clients. Some segments of the market are showing signs of rekindled demand, hinting at a possible upswing in the semiconductor industry. Nevertheless, certain semiconductor manufacturing firms remain cautious in their industry outlook.

TSMC’s Capacity Utilization Rate on the Rise

Media’s report indicates that TSMC’s capacity utilization rate has gradually recovered. The 7/6nm utilization, which had dropped to 40% at one point, is now around 60% and could potentially reach 70% by the end of the year. Similarly, the 5/4nm utilization is at 75-80%, and the 3nm capacity, which increases seasonally, is approximately 80%.

Concurrently, TSMC is experiencing a significant uptick in orders from their clients, including tech giants like Apple, MediaTek, NVIDIA, AMD, Intel, Broadcom, Marvell, and STMicroelectronics. Furthermore, AI chip clients such as AMD’s subsidiary Xilinx, Amazon, Cisco, Google, Microsoft, and Tesla have all accepted TSMC’s plan for a price increase in 2024.

Taking Tesla as an example, they are building a supercomputer facility in Austin to accelerate the development of their autonomous driving system, expanding the computing power of Dojo. The core D1 of Dojo is produced using TSMC’s 7nm process and advanced packaging technology. Based on this, Tesla is deepening its collaboration with TSMC, and it’s expected that their order volume will increase from around 5,000 pieces this year to 10,000 pieces next year.

Amid the ongoing AI surge, NVIDIA is actively seeking additional production capacity. On October 19th, NVIDIA’s CEO, Jensen Huang, revealed in an interview that the global demand for AI chips remains robust. He has met with TSMC’s CEO, C.C. Wei, to discuss providing more capacity to serve customers. NVIDIA is in the planning stages for the next generation of chips designed for AI-based infrastructure and has also engaged in discussions with partners such as Quanta and ASUS to strategize collaboration.

Is the Semiconductor Industry on the Rebound?

During TSMC’s Q3 earnings call, C.C. Wei pointed out that, in addition to strong AI demand, there’s a rebound in demand for smartphones and personal computers. As for automotive electronics, benefiting from the continued growth of electric vehicles, the demand for next year is expected to be quite robust. Regarding when the semiconductor industry might hit bottom, Wei remarked that there are some early signs appearing in the PC and mobile phone sectors. However, it remains challenging to predict a strong resurgence as customers are still cautiously managing their inventories.

In response to industry concerns about smartphone growth, TSMC’s CFO, Wendell Huang, noted that smartphone growth is anticipated to remain lower than the company’s future growth rate. High-Performance Computing (HPC) is expected to be the most robust growth segment, making substantial contributions to growth in the coming years.

On the other hand, other semiconductor foundry companies, such as PSMC, have also shared their perspectives on the fourth quarter and future industry developments. Recently, PSMC’s President, Brian Shieh, pointed out that the supply chain’s inventory seems to have reached a reasonable level, with growing demand for mobile panel driver ICs, surveillance system CIS chips, and visibility extending beyond one quarter. Prices for special memory products have started to show an upward trend. Demand for Power Management ICs (PMIC) also displays signs of recovery, even though the trend isn’t as pronounced as that of driver ICs and CIS chips.

Regarding UMC, the company is scheduled to hold an earning call on 25th October. In their previous earnings call for the last quarter, UMC mentioned that due to ongoing adjustments in the supply chain’s inventory, the outlook for wafer demand remains uncertain. Although the industry glimpsed a modest recovery in the second quarter, the overall sentiment in the end-market remains subdued, and customers continue to maintain stringent inventory management practices.