According to Taiwan’s TechNews, the ongoing soft demand for smartphones, combined with Huawei’s launch of the Mate 60 Pro, has severely impacted Qualcomm. Reports within the Chinese industry suggest that Qualcomm is planning significant layoffs in China, with severance costs estimated to be as high as N+7.

Based on discussions in Chinese forums and media reports, Qualcomm’s Shanghai R&D center is set to undergo substantial layoffs. This center primarily focuses on wireless-related businesses. The severance standards for permanent employees are at least N+4, which means the employee’s tenure plus an additional 4 months are considered for severance pay. As for contract employees, the severance compensation is set at N+7.

In fact, Qualcomm announced its downsizing plan in August, with reports suggesting that Qualcomm Taiwan plans to lay off about 200 employees in October. This will affect personnel in product engineering, testing, and verification fields, comprising 11.8% of the total workforce. The company is also implementing cost-saving measures such as eliminating annual salary adjustments and reducing bonuses to 70%.

This downsizing rumor has also extended to China, with reports at the time suggesting that Qualcomm China might lay off up to 40% of its workforce. The main reasons cited were sluggish demand for smartphones and Huawei’s new Kirin processor.

Analyst Ming-Chi Kuo of TF International Securities stated that Huawei is expected to fully adopt its own designed Kirin processors in its upcoming phones next year. Qualcomm will be the major loser in this scenario, losing Huawei’s orders entirely.

According to Kuo’s data, Huawei purchased 23 to 25 million smartphone SoCs (System on a Chip) from Qualcomm in 2022, but this number increased to 40 to 42 million in 2023. However, starting in 2024, Huawei will use its own chip designs, causing Qualcomm to not only lose orders but also face the risk of declining shipments from other Chinese brand customers due to Huawei’s increased market share.

Kuo also expects that, influenced by Huawei’s actions, Qualcomm’s SoC shipments to Chinese smartphone brands will decrease by 50 to 60 million units next year and continue to decline in the following years.

With a significant potential decline in performance in the Chinese market and increasing price competition towards the end of the year, Qualcomm is expected to carry out more layoffs. As of September last year, Qualcomm had approximately 51,000 employees worldwide. The company’s restructuring costs in the last quarter amounted to $285 million, with most of it being severance pay. In June of this year, the U.S. headquarters also reduced around 415 positions.

Source to Volvo’s recent announcement, by 2030 Volvo plans to sell only fully electric cars, and by 2040 aims to be a climate-neutral company. That clear roadmap towards all-out electrification represents one of the most ambitious transformation plans of any legacy car maker. At Climate Week NYC Volvo announced the end of production of all diesel-powered Volvo Car models by early 2024. In a few months from now, the last diesel-powered Volvo car will have been built.

“Electric powertrains are our future, and superior to combustion engines: they generate less noise, less vibration, less servicing costs for our customers, and zero tailpipe emissions,” says Jim Rowan, Chief Executive at Volvo Cars. “We’re fully focused on creating a broad portfolio of premium, fully electric cars that deliver on everything our customers expect from a Volvo – and are a key part of our response to climate change.”

Volvo’s decision to completely phase out diesel by early 2024 illustrates how rapidly both the car industry and customer demand are changing in the face of the climate crisis.

Only four years ago, the diesel engine was Volvo’s bread and butter in Europe, as was the case for most other car makers. The majority of cars we sold on the continent in 2019 were powered by a diesel engine, while electrified models were only just beginning to make their mark.

That trend has largely inverted itself since then, driven by changing market demand, tighter emission regulations as well as brand’s focus on electrification. The majority of Volvo’s sales in Europe now consists of electrified cars, with either a fully electric or plug-in hybrid powertrain.

Fewer diesel cars on the streets also have a positive effect on urban air quality; while diesels emit less CO2 than petrol engines, they emit more gases such as nitrogen oxide (NOx) that have an adverse effect on air quality especially in built-up areas. (Source: Volvo)

Source to media China Timse,  in the realm of China’s mainland new energy vehicle industry, NIO announced on the 20th that it has successfully secured $1 billion in funding through two convertible corporate bond offerings. This move aims not only to reduce existing debt but also to strengthen its balance sheet. In addition, BYD has unveiled the pricing for its electric vehicle model, Dolphin, which is making its entry into the Japanese market.

The starting price for Dolphin in Japan is 3.63 million Japanese yen, approximately $24,565.2 USD. This Dolphin model is BYD’s second entry into the Japanese automotive market. For those seeking a longer-endurance version of Dolphin, the price is set at 4.07 million Japanese yen. Earlier this year, BYD introduced a higher-priced electric SUV in Japan.

Another electric vehicle manufacturer in China, NIO, has disclosed that it raised $500 million through a 6-year convertible bond issuance and another $500 million through a 7-year convertible bond offering. These bonds are categorized as senior unsecured bonds, with a yield of 3.875% for the 6-year bonds and 4.625% for the 7-year bonds.

Upon the release of this news, NIO’s stock price in Hong Kong experienced a sharp 12% drop during the morning session on the 20th. NIO plans to allocate some of the raised funds to repurchase existing debt securities and enhance its financial resilience.

NIO had previously announced at the end of August that they plan to launch their first self-developed smartphone around the end of September. They aim to enhance the attractiveness of their vehicles by leveraging improved software connectivity. During the second quarter, NIO reported a net loss of 6.12 billion RMB, approximately $8.3951 billion USD, compared to a net loss of 2.75 billion RMB in the same period last year. (Image credit: BYD )

(Source: https://www.chinatimes.com/realtimenews/20230920002512-260410?ctrack=pc_main_rtime_p06&chdtv)

Leveraging the superior conversion efficiency of N-type cells, the rise of cost-effective TOPCon cell technology in 2022 has seen N-type cell technology rapidly expand, inviting many solar industry participants into the competition. Currently, PERC cell technology (for producing P-type cells) stands as the market’s mainstay. However, with the step-by-step realization of large-scale N-type cell capacities, there looms a risk that a substantial part of PERC cell technology capacities may be phased out within the forthcoming two to three years. Concurrently, based on TrendForce’s analysis, as N-type cell capacities incrementally come online, there might be a sporadic shortage of high-quality silicon materials and wafers tailored for N-type cells. This could further establish a noticeable price disparity between N-type silicon and wafers, and their P-type counterparts.

Silicon supply remains abundant, but the price gap between P-type and N-type continues to widen

By 2023’s end, it is projected that the total production capacity of polysilicon will reach 2.072 million tons, an increase of 68.6% YoY. The actual output of silicon materials is expected to be about 1.483 million tons, sufficient to support over 600 GW of solar panel consumption (given a silicon consumption rate of 0.245 tons/GW). This aligns with an annual installation demand of approximately 370-390 GW, indicating a clear oversupply of silicon. As the market leans towards N-type cell technology, P-type silicon may face oversupply, causing its price to drop faster. Conversely, robust demand and limited output for N-type silicon might create periodic shortages, stabilizing its price. For silicon firms, N-type silicon offers better profitability.

Surging demand for N-type cell slices drives silicon wafer makers to swiftly pivot

By the end of 2023, silicon wafer production capacity is projected to reach approximately 921.6 GW, reflecting a 64.2% year-on-year growth. Driven by the increasing demand for N-type cell wafers, silicon wafer manufacturers are rapidly transitioning to N-type production and ramping up their output. With the inclusion of rectangular silicon wafers occupying a portion of this capacity, certain dimensions of P-type wafers might experience short-term supply shortages, potentially failing to meet immediate demands. If the N-type cell rollout falls short of expectations, there remains a risk of N-type wafer oversupply. Additionally, amid intensified industry competition and considering factors such as technological prowess, availability of high-purity quartz sand, and consistent supply of top-quality silicon wafers, leading companies like Longi and CMC are set to further elevate their competitive edge.

N-cell capacity deployment sees delays; PERC tech likely to remain dominant this year

The projected total wafer capacity by 2023’s end is estimated to reach around 1,172 GW, marking a 106% increase year-on-year. The majority of this newly added capacity is attributed to N-type TOPCon cell technology. By the end of the year, N-type wafer capacity is expected to reach 676 GW, accounting for 57.7% of the total. However, TrendForce has observed some delays in the actual deployment of N-type cell capacity. Given the existing price difference between N-P type wafers, PERC technology is anticipated to retain its leading position in the market this year, although the penetration rate of TOPCon cells will accelerate.

China expected to hold 80–85% of global solar panel capacity in 2023

Estimations for 2023 indicate that the worldwide solar panel capacity could reach an astounding 1,034 GW, marking a 64.7% increase year-on-year. Of this, approximately 335.4 GW represents newly added capacity, predominantly driven by Chinese enterprises. With Western countries and India progressively launching policies supporting local manufacturing, a growing number of Chinese firms are contemplating setting up production capacities overseas to sidestep trade barriers. TrendForce reports leading Chinese solar panel manufacturers like Longi, JinkoSolar, JA Solar, and TrinaSolar have successively expanded their operations to areas including the US, Europe, and the Middle East. Given the matured technology and cost-effective production of Chinese manufacturers and considering the nascent state of the solar supply chains overseas and the elevated costs of expansion, it remains challenging for enterprises from other regions to join the competition. As such, TrendForce believes that the global competitive landscape for solar panels won’t see any marked changes in the near term, maintaining China’s dominant position with an anticipated 80-85% capacity share in 2023.

According to a report by China’s Jiwei, there have been indications of a positive turnaround in the Chinese MCU market recently. Some components are experiencing inventory replenishment, and certain MCU manufacturers have noted an upward trend in component prices, suggesting a gradual stabilization of prices. Additionally, there is optimism that wafer production costs in the coming year may become more favorable, which could gradually boost profit margins.

It is worth noting that the consumer electronics market has been sluggish for over a year, particularly for consumer-grade general-purpose MCUs, which have seen inventory accumulation. Due to the high inventory levels, many MCU manufacturers have been actively working to reduce their stock levels, leading to intermittent price wars.

Recently, Fudan Micro disclosed research findings indicating that the recovery of the end consumer market is still a gradual process, putting significant pressure on IC design companies. In the consumer market, products such as MCUs and storage solutions have seen some recovery in sales but have not yet shown a noticeable improvement in prices. Additionally, the security and identification product lines face substantial competitive pressure.

Looking at the industry as a whole, the clearance of inventory has not disappeared; it is still expected to return to normal levels by the end of this year or the first half of the next year. For IC design firms, the resolution of high-priced inventory is anticipated to continue impacting profit margins in the latter half of the year.