2021 is undoubtedly a challenging year for the automotive industry, in addition to continuing to be shrouded in the shadow of the epidemic, it has also encountered a shortage of automotive chips, and even now and in the short term there is no obvious sign of improvement. The lack of cores not only affects logistics costs around the world, but also directly leads to a reduction in output in the entire automotive industry. According to the data, due to the shortage of chips alone, global automobile production will be reduced by 11.3094 million units this year.
Why is there a shortage of chips?
According to the different functional complexity, the number of chips on a fuel vehicle is about 500 to 1500, and more than 95% of them still use chips with 40-nanometer processes and above. However, with the popularity of intelligent electric vehicles, the use of chips in advanced processes and cutting-edge processes has increased significantly, but considering the current market share of intelligent electric vehicles, the demand for chips in the automobile industry is still based on mature processes and traditional processes.
This is undoubtedly a huge pressure on the production side, and due to the particularity of the industry, the expansion of the semiconductor industry's production capacity has always been more cautious, with an annual growth rate of only about 6%. This time the lack of 40 nanometers of low-end chips, mainly responsible for recording and storage, such as car radar, ESP, etc., compared with mobile phone chips, this part of the chip foundry income is not high, the company naturally has no expansion power.
In addition, force majeure factors such as the Texas cold wave, the closure of packaging companies in Malaysia due to the epidemic, and the Fire of renesas factories have further hit the semiconductor industry with a very long supply chain, and various factors have led to a shortage of global chips, and the automotive industry chain with great demand for chips has to stagnate slightly.
Will missing cores lead to higher car prices?
The answer is yes. This historic chip shortage problem has directly led to the reduction of production in the automotive industry, but with the recovery of the market, consumer demand is gradually rising, which leads to a state of short supply, even if the official price does not rise, but the dealer's preferential efforts are weakened, and it is not uncommon to increase the price of the car, which is equivalent to a disguised price increase.
In addition, another impact of the chip shortage is that in the case of new car production cuts, the price of used cars continues to rise. The average used car trading price in Japan reportedly hit a 10-year high in October.
According to the statistics of the China Automobile Dealers Association, as of November this year, the average transaction price of used cars in China rose for four consecutive months to 67,100 yuan / unit, a new high in four years.
This is naturally not good news for consumers, whether it is a new car or a used car, the current price is higher than before.
How long will the missing core problem last?
Since 2020, the automotive industry has been plagued by chip shortages, and in 2021, a number of automakers have cut production or stopped production for a short time. Although the world's major chip companies have gradually increased the production and supply of automotive chips, they have not seen any signs of improvement in the short term, because increasing production is bound to increase a lot of software debugging, production line switching and verification work, which will take time.
The lead time for general semiconductor production is more than four months, and the transfer of products to another production base to increase production capacity requires an additional six months on this basis, and if switching to another manufacturer (such as changing foundries) takes longer, usually more than one year.
Overall, car companies either choose to wait for existing suppliers to make more chips, or choose to spend more than a year to replace suppliers. In any case, it is a long-term process.
summary:
But don't worry too much, many governments have intervened in the problem of chip shortages, and China is no exception. The Ministry of Industry and Information Technology has taken multiple measures to ensure the supply of automotive chips, and in strengthening the docking of supply and demand, it has guided the establishment of the China Automotive Chip Industry Innovation Alliance, organized the compilation of the "Automotive Semiconductor Supply and Demand Docking Manual", provided 568 chip product technical parameter information, 1,000 vehicle and parts enterprise demand information for the reference and use of industry enterprises; in strengthening policy guarantees, coordinated relevant departments and local governments to give financial funds, tax incentives, insurance compensation and other support policies. Cooperate with the State Administration for Market Regulation to investigate and deal with unfair competition behaviors such as automotive chip hoarding and price gouging, and accelerate the construction of the automotive chip standard system.
It is believed that the situation will improve in the second half of 2022.
(Author: He Shuguang)