Since the second half of 2020, the shortage of automotive chip supply has intensified, and in the third quarter of this year, the epidemic in Malaysia has intensified, and the production plants of ST Semiconductor and other enterprises have been shut down by the local government many times, and the supply of some automotive chip products has been nearly interrupted, which has seriously affected the normal supply of the automotive market.
The global automotive chip market is monopolized by giant companies in Europe, the United States and Japan. The top five leading companies account for more than 40% of the automotive chip market share. Due to the internal laws and historical formation of the industry, the global division of labor in the automotive chip industry chain has significant characteristics, the supply chain layout is concentrated and single, and the production and operation fluctuations of the head enterprises will have a huge impact on the entire automotive chip industry.
By analyzing the financial reports of chip giants, we can grasp the operation of enterprises, and we can also see changes in market demand, supply and industry development trends. Therefore, this article sorts out and analyzes the recent financial report information of five companies, including TSMC, NXP, Infineon, Renesas, and STMicroelectronics.
TSMC: Automotive revenue was the highest in recent years
TSMC is the world's largest foundry, with automotive chip foundry revenue of approximately US$1.45 billion in 2020, accounting for 30% of the global automotive chip foundry market and a key position in global automotive chip production.
The proportion of TSMC's automobile business has always been small. For TSMC, the automotive chip business accounts for a very small proportion, generally accounting for only 2-5% of TSMC's turnover. It mainly produces digital automotive chips, using a 16-28 nanometer process. Hybrid car chips are generally 16-45 nanometers, and analog classes are generally 28-90 nanometers. TSMC is mainly 7 nanometers and 5 nanometers, TSMC in the field of 5 nanometers belongs to a complete monopoly market, the profit is much higher than the automotive chip, the two processes account for more than 50% of its turnover.
In the third quarter, the revenue of the automobile business has reached the highest point in recent years. Since the first quarter of 2019, TSMC's total operating income has increased steadily quarter by quarter, and the third quarters of 2019, 2020 and 2021 have increased significantly compared with the second quarter. The growth rate of the automotive business clearly does not match the overall business growth rate, with a downward trend in total revenue from the first quarter of 2019 to the third quarter of 2020, reaching a minimum of 2% in the third quarter of 2020. Since the third quarter of 2020, the revenue of the automotive business has increased month by month, and the supply of chips has gradually increased. While the automotive business has not increased as a share of its total revenue, it has exceeded its level in the same period in 2019.
As can be seen from the third quarter financial report, TSMC's automotive business revenue accounted for 4%, an increase of 5% compared with the second quarter.
NXP: Inventory days are at a low level
Founded in 2006, NXP Semiconductors is the world's largest supplier of automotive semiconductors, formerly known as Philips AG's Semiconductors Division in the Netherlands and headquartered in Eindhoven, the Netherlands. In 2020, total revenue was $8.6 billion, with the automotive business accounting for 44% of NXP revenue, the largest share.
Inventory is insufficient and inventory days are at a low level. Inventory days (DIO, Days of Inventory) is to convert inventory turnover efficiency (string) into a specific number of days, which is a measure of the inventory performance of enterprises. During the first quarter of 2019 to the second quarter of 2020, the inventory level remained at about 100-120 days. Beginning in the third quarter of 2020, NXP's inventory days data declined rapidly. In the fourth quarter of 2020, the number of inventory days reached the lowest point in nearly three years, only 78 days, and the problem of tight supply of automotive chips began to appear at the same time. In the first and second quarters of 2021, figures recovered slowly, at 81 days and 88 days, respectively.
The proportion of automotive business and total revenue have reached the highest level in recent years. NXP's automotive revenue fell sharply in the second quarter of 2020, at just $670 million, or 37 percent of total revenue, at the lowest level in nearly three years. Since then, the revenue and total revenue of the automotive business have increased steadily quarter by quarter. In the third quarter of 2021, NXP's automotive business generated revenue of $1.46 billion, accounting for 50% of total revenue, the highest level in recent years.
STMicroelectronics: Gross profit in the automotive business is lower than in other businesses
STMicroelectronics Group has a relatively strong power device strength, is the world's earliest and Tesla launched a vehicle silicon carbide power device enterprises, MCU, sensors and other automotive semiconductor products also cover the full range, 2020 revenue of 10.2 billion US dollars, automotive business accounted for about 30%.
The gross margin of the Automotive business unit is significantly lower than that of other businesses. According to ST's Q3 2021 financial report, the Automotive & Discrete Products Division (ADG) had an operating gross profit of 10.8%, the Analog Devices, MEMS and Sensors Division (AMS) had an operating margin of 24.0%, and the Microcontrollers & Digital IC Products (MDC) Division had an operating margin of 23.9%. The operating gross margin of ADG's product division is significantly lower than that of other product segments.
Due to the impact of the epidemic in Malaysia, the revenue of the automotive business in the third quarter decreased sequentially. In the third quarter of 2021, the epidemic situation in Malaysia intensified, the prevention and control trend became stricter, and ST's factories in Malaysia were affected, and the supply of automobile terminals was greatly affected. STMicroelectronics' ADG division revenue decreased 6.7% sequentially and increased 18.1% year-over-year, compared to other product divisions.
The automotive business is generally on the rise. From the first quarter of 2020, ST's automotive business revenue fell sharply, and gradually recovered in the third quarter of that year. In the third quarter of 2021, due to the impact of the epidemic in Malaysia, the automotive business declined again, but the overall trend was still on the rise.
Infineon: The order-to-shipment ratio remains high
Infineon was formerly the semiconductor division of Siemens Group and is headquartered in Munich, Germany. In the field of power devices and modules, the turnover in 2020 was 2.09 billion US dollars, ranking first in the world, and in the field of MCU microcontrollers, the turnover in 2020 was 1.73 billion US dollars, ranking third in the world.
The automotive business order-to-shipment ratio remains high, and products are in short supply. Book-to-bill is a leading indicator for trend-observing uses, with an order-to-book ratio above 1.0, representing the industry's order intake exceeding its production capacity. In the third quarter of 2020, Infineon's order-to-shipment ratio was 0.2, and in the fourth quarter it began to exceed 1.0, which has recently exceeded 2, reflecting the serious oversubscription of the company.
Inventories were at a low level in 2021, with a slight increase in the third quarter. From 2019 to the third quarter of 2020, Infineon's overall inventory level was above 120 days. Under the pressure of high order-to-shipment ratios, Infineon's inventory increased in the third quarter, with an inventory cycle of 112 days.
The third quarter of the automotive business revenue is the highest level in recent years. Since the fourth quarter of 2020, Infineon's automotive business revenue has grown significantly, accounting for more than 40% of the automotive business revenue. Infineon and ITALY suffered similarly, with revenue falling slightly in the third quarter of 2021, as a result of the pandemic in Malaysia. In addition, Infineon's automotive business revenue has maintained a growth trend this year. In the fourth quarter of 2021, the revenue of the automotive business reached 1.27 billion euros, and the proportion of revenue fell sequentially, but the absolute value of revenue was at the highest level in the past three years.
Renesas: Nearly 100% utilization of 8-inch wafer front end
Renesas is one of the world's top 10 semiconductor suppliers, with 46 percent of its operating income coming from the Japanese market and 54 percent from overseas markets, and its automotive business accounts for about 60 percent of its total operating income.
In the third quarter, the utilization rate of the 8-inch wafer front end has approached 100%. The following figure shows the change curve of Renesas' front-end utilization of different wafer sizes. Front-end utilization for 8-inch wafers began to improve in Q2 2020 and was nearly 100% in Q3 2021. Front-end utilization of other size wafers is also generally on the rise.
Inventory of semi-finished products increased, but inventories of finished products did not increase. The following figure shows the internal inventory map of Renesas automotive chips. As can be seen from the figure, Renesas' internal inventory fell to a minimum in the first quarter of 2021 and gradually increased since the second quarter of 2021, and the main part of the increase is "work in process", and the "manufactured goods" part of the inventory has not been significantly increased.
The revenue of the automobile business in the third quarter was the highest level in recent years. In the second quarter of 2020, Renesas' automotive business revenue was only 72.6 billion yen, the lowest in nearly two years. Since then, it has continued to grow, reaching 121.4 billion yen in the third quarter of 2021, the highest point in recent years. Even after a fire accident at the Renesanaka plant in March 2021, there was a slight increase in the second quarter.
From the analysis of the above five chip companies' financial reports, we can know that since the beginning of this year, the turnover of each head enterprise in the 1-3 quarters has grown rapidly, the chip market is at a high level, and the overall sales of chips, including automotive chips, have continued to increase, and the supply has continued to improve. Although the turnover of the automobile business has reached a new high in recent years, the proportion of total turnover has not increased significantly, and chip companies have not significantly tilted towards the automobile business. Automotive chip orders have multiplied, the capacity utilization rate of enterprises is close to saturation, the demand for automobiles has not been fully met, and the original supply and demand balance needs to be rebuilt. Only when the new production capacity of the chip industry is released, the relationship between supply and demand can be fundamentally improved.