On December 31, 2021, Yancheng Dongshan Precision Manufacturing Company issued a price increase letter, and from January 1, 2022, the price of all products was raised by 5%, due to the recent tight supply of raw materials and chips in the market, and the increase in upstream supply prices. Dongshan Precision has sounded the horn of the New Year's price increase, and other companies may follow. This price increase letter is like a basin of cold water poured on the heads of LED display industry practitioners, sweeping away the joy of the holiday, how is the price trend of LED products in 2022? What does it affect? It's worth thinking about.
Yancheng Dongshan Precision Manufacturing Company price increase contact letter
This wave of price increases in the new year comes from RELATED upstream raw materials such as LED chips and wafers, will this affect the driver IC dedicated to LED display? Let's first take a look at the trends of wafer foundries, IC design factories and chip companies.
Wafer foundry
TSMC, a major foundry company, plans to raise prices for some 8-inch and 12-inch processes by 10% to 20% in early 2022.
UMC plans to launch a new wave of about price increases in January 2022, mainly for the three major customers whose revenue accounts for more than 30%, an increase of 8% to 12% per month, the company's customers mainly include: AMD, Qualcomm, Texas Instruments, Nvidia, Infineon, STMicroelectronics, etc.; in the same month, it will also raise the quotation of 28nm and 22nm process, and after the price increase, the 28nm quotation will be raised to 2800 TO 3000 US dollars, and the 22nm quotation will be raised to 2900 US dollars. It is reported that UMC has reached an agreement with customers such as MediaTek, Lian Yong and Realtek on the new price; in March 2022, the oem quotation of all products will be raised, an increase of 5% to 10%; it is expected that UMC will adjust the price quarter by quarter.
Samsung and Key Foundry have informed customers at the end of August 2021 that they plan to increase the foundry price by 15% to 20%, and the group increase depends on the number of customer orders, chip types and contract duration, and the new price will take effect in 4 to 5 months (January to February 2022).
In the first quarter of 2022, Li Electromechanical and World Advanced Plans raised their quotations by more than 10%; it is expected that the two manufacturers will adjust their quotations every six months.
IC design factory
IC designers MediaTek and Realtek plan to raise the price of WiFi-6 chips in the first quarter of 2022, an increase of about 10%. Lian Yong, Xiang Shuo and Xin Hua have confirmed that they will start price increases in the first quarter of 2022.
Chip factory
13 original chip manufacturers also announced price increase plans:
ST: High-end products and car specification chips have a large gap
Since the price of ST products fell, most spot dealers have been selling, but this month there has been a slight rebound. For example, the prices of STM8S003F3P6TR and STM32F103VCT6 have risen slightly. It is worth noting that st.s. brake system chip market prices have soared in recent days, other automotive chips have also risen, and there is still a large gap in high-end products and vehicle specification chips, and the delivery time is still very long.
Renesas: 10% increase across the board in January 2022
Renesas recently announced that the price of all products will increase by 10% from January 1, 2022, and the products raised this time include Renesas' newly acquired Dialog products. The reason for the price increase is mainly due to the capacity constraints of the front end (wafer), back end, test and packaging, and raw materials, which have led to significant cost increases for suppliers. It is worth noting that some of the old models of major appliances will be discontinued and the production capacity will be transferred to the vehicle specification IC.
In addition, the delivery time for the fourth season of Renesas analog chips has been extended from the original ten or twenty weeks to forty or fifty weeks.
NXP: Announcement warns of the first wave of stock-outs
Recently, NXP original factory issued a warning announcement to customers, reminding customers to seize the stock in the Q4 quarter to meet the wave of out-of-stocks in the Q1 quarter of 2022. For now, the supply of the MK series has been largely shortfall, and most customers have extended their order schedules to 2023. Partial lead times for MPUs, MCUs, and clock chips are up to 78 weeks. The KEAN series has been seriously out of stock since the Q3 quarter, the average delivery time given by NXP is about 52 weeks, and some materials have not even been delivered.
ADI: 6% increase in full range of products from December 1, 2021
Recently, ADI's market has continued to be hot, product prices are also rising, and demand is mainly concentrated in server and automotive products. The general model of the product due to the original factory has a small number of arrivals last month, so the product price is relatively stable. In addition, ADI announced a 6% increase in prices across the series from December 1. According to people familiar with the matter, by 2022, ADI may announce a new round of price increases, the increase is expected to be more than 10%, and it is expected that the market will be in a state of price surge. At present, the demand for ADI has increased significantly, and the delivery time of some materials has been more than 90 weeks, and the subsequent price is also bullish.
In addition, ADI's brand Maxim will also announce price increases with the requirements of the headquarters, and it is expected to issue a price increase letter in February and March 2022, the specific increase is unknown, and the delivery period of general-purpose material products at this stage is about 26 weeks, and the delivery period of special material number products is basically more than 40 weeks.
ON: The delivery time is up to 80 weeks
Since the Q4 quarter, ON Semiconductor has seen a significant increase in market demand, mainly in logic ICs, Mosfets, and image sensors. Among them, the demand for logic ICs in the 74 series has increased significantly. Due to production capacity restrictions, ON Semiconductor's current product delivery time is 30-50 weeks, and some product delivery periods are even as long as 80 weeks.
Due to the recent surge in demand for medium and high pressure MOS tubes, the market price has risen all the way, coupled with the fact that many factories are currently tilting their production capacity to vehicle specification products, resulting in low-pressure MOS tubes are almost out of stock, and some delivery periods have exceeded 50 weeks. In addition, there has been news recently that ON Semiconductor will adjust the order window again, and the order for some materials will not be canceled. It can be seen that onsenmei's stock-out situation will continue for a long time.
It is worth noting that due to the continuous outbreak of demand for intelligent driving of new energy vehicles, ON Semiconductor image sensors have also appeared in a large area of shortage, and prices have risen again and again. The NTD, NCP, and NCV series are all out of stock, and the stock-outs are expected to continue into the Q2 quarter of 2022.
Xilinx: The 6/7 series is out of stock
At present, the XILINX 6/7 series is very out of stock, and this series has been handed over to Samsung for OEM production. However, due to the recent contradictions in the cooperation negotiations between Samsung and Xilinx, Xilinx has not been able to obtain production line capacity for this series, and it is expected that the shortage of this series will continue for a period of time.
Xilinx's FPGA, CPLD product demand has exploded, overseas markets are even more hot, the quotation is generally from tens of dollars to hundreds of thousands or even tens of thousands of dollars.
Microchip: Extended lead times
It is reported that Microchip (American Microchip) recently in the TSMC wafer production capacity scheduled plan, the two sides negotiations are not smooth, the tight capacity will lead to the extension of product delivery, Microchip most of the products or will be out of stock for a long time, of which the MCU from the original minimum of 30 weeks or 40 weeks to a minimum of 52 weeks.
Toshiba: Prices will increase again in January 2022
TOSHIBA (Toshiba) recently announced that due to the rising prices of raw materials, logistics and other supply chains, the company's increasing pressure on profitability, Toshiba Electronics itself has been unable to absorb the cost, so it decided to officially increase the price from January 1, 2022, the specific price increase has not yet been announced.
Qualcomm: Increase Bluetooth products
Qualcomm, Netcom chips are still seriously out of stock, AR8031, AR8033, AR8035 series in short supply, it is expected that next year the original output is less, some models will be discontinued. Most booked out-of-stock model AR8031, spot price has been speculated to more than 1200 yuan, follow-up original factory has no output, short-term shortage can not be alleviated.
In addition, Qualcomm recently announced that it will raise the price of its Bluetooth products for the second time. Among them, the QCC51XX series will increase by 17%, the QCC30XX series will increase by 6%, the PRICE increase of CSR8670/CSR8675 will increase by 21%, the price of CSR8811 series will increase by 15%, and the price of CSR8615/CSR8635 will increase by 13%.
DIODES: Delivery time extended to 40-50 weeks
In terms of DIODES, the delivery time of diodes oem products has been extended to 40-50 weeks. DIODES said that in addition to the shortage of wafers, the original production capacity is also very tight, because most of the original production capacity is allocated to automotive and power management products, which indirectly leads to the low unit price of discrete devices such as products can not be supplied normally.
Infineon: Orders need to be placed at least one year in advance
Infineon, the market is still seriously out of stock, Infineon's product delivery has not been alleviated until now, mainly concentrated in Mosfet and switch chips, etc., some agents feedback that end customers need to place orders at least one year in advance.
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It is worth noting that on January 3, 2022, a fire broke out at a factory of Dutch lithography machine giant ASML in Berlin, Germany. In the context of the obvious easing of the global chip shortage in the morning, any wind and grass in the supply chain will affect the market nerves, and some netizens are worried that this means another round of price increases.
Although the fourth quarter of 2021 domestic chip factories to expand production, to a certain extent to alleviate the supply problem of LED display chips, so that LED display manufacturers have a chance to breathe, but the source of this price increase is the wafer shortage caused by the rise in wafer foundry prices, cost pressure transmission is inevitable, since the first price increase in the history of LED displays in 2021, once again ushered in a wave of price increases, according to the quotation plan of each chip factory, cyclical price increases may form the industry norm.
Undertaking the price increase caused by the chip shortage problem in 2021, the price increase at the beginning of 2022 can be described as unexpected and reasonable, the accident is that the chip factory expands production at the end of 2021, the shipment is stable, and the industry picks up Many people are full of expectations for 2022, so when the price increase letter of the chip factory is released, there will be a sense of frustration that is unfavorable. Linked to the crisis of chip hoarding and speculation in 2021, production power rationing, and cross-border application of head enterprises, many people are not optimistic about the situation in 2022.
As cost pressures are conducted, the price increases shown in the end-use market will be significant and may lead to a decline in product sales. In marketing, it is no longer realistic to try to create a price advantage to occupy the market, and it is necessary to change the strategy to attract customers with high cost performance and service quality. As can be seen from the development trend of the LED display industry in 2021, the LED display industry is developing towards standardization and cutting-edge, and has entered the international frontier in the field of commercial display and professional display.
LED lamp beads and driver ICs are the most important raw materials for LED display products, the sum of the cost of the two accounts for about 55%, and the shortage of upstream wafers will make the LED display industry bear a heavier price increase burden than ever before. The rise in upstream supply costs is irreversible in the short term, and LED display companies need to increase the added value of products and explore emerging markets to increase revenue.
The new year is still worth looking forward to, the industry will continue to use the "5G + 8K" "hundred cities and thousands of screens" and other policy heat, LED movie screen, outdoor 3D, indoor business display and ultra-micro spacing and other applications of new blue ocean, continue to expand market share. It is believed that the LED display industry can survive the "spring cold" of the New Year.
Typesetting Editor: Lieutenant Lei