As early as two years ago, the chip shortage became a frequent topic in the automotive industry, and the previously unknown automotive chips seemed to become the object of competition between major OEMs overnight. In the past 2021, the shortage of chips has become more and more intense, from the whole vehicle to the parts company, to the dealers, consumers are almost not spared, have suffered from different degrees of impact. So, what impact does the "chip famine" that runs through the whole year of 2021 have on the automotive market? Why is there a shortage in a relatively mature industry? Will the lack of cores be fundamentally improved in 2022?
Key takeaways:
1· The "chip famine" has spread to the entire automotive industry, and almost no one from car companies to consumers has been spared.
2· Many Chinese car companies have turned their attention to China, looking for suitable suppliers or self-developed chips.
3· Chip supply problems may ease in the second half of the year, but a small lack of cores may become the norm in the future.
■ What is the impact of the "chip famine" on the automotive industry?
In fact, as early as the beginning of 2020, when the word "new crown" was just becoming well known to people around the world, signs of "chip shortage" had already appeared. At that time, due to the increase in home conditions caused by the epidemic, the demand for a large number of intelligent devices was brought about, but various chip factories could not resume work due to the epidemic, so there was a shortage of supply. As the epidemic gradually eases (or normalizes), chipmakers themselves are more willing to allocate capacity to smartphones and 5G-related areas with larger profit margins, which in turn has led to a shortage of automotive chips.
The shortage of chips has led many car companies to announce production cuts in early 2021. First of all, the Volkswagen Group announced in January that it would reduce production by 100,000 vehicles due to lack of cores, and its annual global sales fell to less than 9 million vehicles; subsequently, Toyota also announced that many of its car factories had entered a shutdown period, directly causing the loss of production capacity of several 100,000 vehicles. Since then, manufacturers including GM, Ford, Honda, Great Wall, etc. have been affected by the lack of cores, and have successively reduced production or suspended the production of some models.
It is worth mentioning that due to the "chip shortage" has also led to the enthusiasm of the downstream industrial chain to hoard goods, such as silicon, resin and other chip raw materials have also ushered in a sharp rise in prices, which has also led to a sharp rise in chip prices, so foundry manufacturers including UMC, TSMC, Samsung and other foundry manufacturers have repeatedly announced the increase in chip foundry prices.
At the same time, the suspension and reduction of production by car companies caused by the "lack of core" has also caused a chain reaction in the terminal market such as longer time for consumers to pick up cars and reduce preferences. Many car companies have to choose to allocate limited chips to models with higher prices and positioning to obtain greater profit margins and make up for the loss of production, but this practice has also seriously affected the terminal delivery of many main models.
Of course, the "chip famine" not only makes many car companies understand the importance of chips, but also makes more consumers start to pay attention to car chips. Because of this, the complaints caused by the chip problem have also become a hot spot for more people. For example, Euler Good Cat announced that it will be equipped with Qualcomm Qualcomm Adreno 640 GPU octa-core CPU chip. But in fact, the vehicle mentioned by the owner uses the Intel Intel Atom A3940 quad-core chip, which does not match the official description of the chip. Consumers believe that Euler Motors is suspected of false publicity and misleading consumers.
■ How do many car companies deal with the "chip shortage"?
It can be said that the "chip shortage" has had a huge negative impact on the entire automobile industry, so many car companies have also begun to take corresponding measures to implement self-help. However, before that, we need to know where the so-called "chip famine" is?
In fact, about the chip, we can understand that a large number of integrated circuits are embedded in a semiconductor (such as silicon) to achieve a certain function, and in the car is not only automatic driving, intelligent cockpit and other high-end functions will use chips, but in addition to the part that can be completed mechanically, such as automatic locking, button driving window, etc. more or less use chips. It is this variety of MCU basic chips that is the source of the "chip famine".
Previously, some institutions issued a report pointing out that most of the on-board chips are developed and produced by IDM (vertically integrated manufacturing) factories themselves, and the proportion of outsourcing is about 2-30%, mainly producing MCU basic chips, radar sensors and automotive infotainment systems, while TSMC's production and shipments account for about 70% of the market share of all automotive MCU basic chips.
It can be said that the high concentration of the on-board chip industry and the excessive dependence of many car companies on external suppliers have led to the dilemma that car companies have no "core" available in the "chip shortage". Therefore, joint or investment in new chip suppliers, or independent research and development of chips, has become a means of self-help for many car companies. In 2021, domestic car companies such as Great Wall, Wuling, BAIC, Geely, BYD, SAIC, Xiaopeng, Weilai, and Zero Run have joined the core-making army.
Of course, whether it is cooperation with chip factories or independent core manufacturing, it shows that getting more chips as soon as possible is the primary purpose of current car companies.
■ Is the chip barren?
Since we understand the far-reaching impact of the "chip famine" on the automobile industry, as well as the self-help measures of many car companies at present, we can't help but ask: "Chip famine" has come to an end? On this issue, the Ministry of Industry and Information Technology said at a press conference in January this year that with the improvement of the epidemic and the continuous expansion of chip companies, chip production capacity will be released in the second half of this year, and it is expected that the shortage of automotive chip supply will gradually ease in 2022.
From the current situation, in the face of strong market demand for automotive chips, the heat of industrial investment is also continuing to rise. In order to meet the supply of chips, a number of major international chip manufacturers have started plans to build new factories and expand the capacity of existing factories. Among them, Samsung has invested tens of billions of dollars to build factories in the United States; Denso has also invested 160 million yuan to expand core production capacity in Malaysia; SMIC has invested 15.3 billion yuan to build factories in Shenzhen, and the expansion of chip companies has been carried out globally.
However, it should be noted that the chip industry is a high-investment, long-term industry, and vehicle-grade chips also need to go through long-term processes such as research and development, design, and production before they are listed. Therefore, whether it is at the national level or at the enterprise level, many self-help measures also need to be completed step by step. Therefore, a small lack of cores may also become the norm in the automotive industry in the future.
■ say at the end
It can be said that the "chip famine" began with the epidemic, tired of man-made, and finally accompanied the entire automotive industry throughout 2021. Although we finally achieved positive sales growth throughout the year despite various pressures, and still achieved the world's first production and sales, the problems exposed are also worth pondering. With the investment of the state and many car companies in the chip industry, it is foreseeable that the so-called "chip shortage" will be alleviated, but it is also expected that there will be a new pattern in the automotive chip industry.