Chips have soared a hundredfold, and the tide of car price increases is coming! When will the core shortage crisis ease? Can domestic chips be on top?

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Lead

Since the beginning of this year, a number of automakers have announced adjustments to the prices of their products. The average price of FAW-Volkswagen's two new energy vehicles will rise by 5,200 yuan, and Xiaopeng Automobile will rise by more than 4,000 yuan. The latest price announced by NIO has also increased compared with last year. The shortage of car chips is the reason mentioned by these car companies.

Since the second half of 2020, the shortage of automotive chips has become the main theme of the semiconductor industry. Although every once in a while, there will be some optimistic voices that the shortage is about to ease, the capacity is about to be overcapacity, but the reality is always unexpected, and the shortage of car chips has been continuing...

When will the shortage crisis of automotive chips be alleviated? Who will seize the opportunity in this crisis?

A

Fry from 20 yuan to 2800 yuan

Recently, CCTV financial channel news reported that in the SEG electronic market in Huangpu District, Shanghai, the original price of 20 yuan chip (ST L9369 chip) was speculated to thousands of yuan of sky-high prices.

The ST L9369 chip is the core chip for body electronic stabilization systems manufactured by STMicroelectronics. Because the requirements of automotive chips in terms of temperature and other indicators are much stricter, such chips produced in accordance with strict requirements are also called vehicle-grade chips, and there are basically no alternative products.

Power semiconductors, MCUs, semiconductor materials and other markets have been tight recently, and the sound of price increases has been heard lately. Auto dealers have been hoarding and inflating prices.

In August last year, the State Administration for Market Regulation released information saying that in view of the outstanding problems such as speculation and high prices in the automotive chip market, it will file a case against the automotive chip distribution enterprises suspected of price gouging according to price monitoring and reporting clues. But now, that hasn't been able to curb dealer madness.

Compared with the surge in dealers, the price increase of manufacturers is relatively peaceful. In 2021, the global manufacturing factories have raised the price of many categories several times, ranging from about 10%-30% each time.

Recently, Infineon mentioned in its notice letter to distributors that due to the contradiction between supply and demand between the lack of cores around the world and the rapid development of the downstream market, Infineon is unable to continue to bear the pressure brought about by rising costs. This is seen by the market as a signal that Infineon is about to raise prices again.

B

What are the types of automotive chips?

Which are missing?

If the mobile phone chip is the "brain" of the mobile phone, then the car chip is equivalent to the brain of the car.

From the tire pressure monitoring system TMPS and cameras, to the vehicle controller and the autonomous driving domain controller, the car is inseparable from a variety of chips.

According to the function, automotive chips are mainly divided into three categories: "control chips", "power semiconductors" and "sensors"

1, control class (MCU and AI chip), MCU is also known as "micro-control unit", the electronic control system in the car, infotainment system, powertrain system, vehicle movement system and other system functions want to operate normally, you need to use this type of functional chip to be able to achieve, the most popular "automatic driving system" is inseparable from AI chips.

2, automotive power semiconductors are mainly used in automotive power control systems, lighting systems, fuel injection, chassis safety and other systems, of which traditional fuel vehicles generally use it in the fields of start-up and power generation, safety and other fields; new energy vehicles require a large number of power semiconductors to achieve frequent voltage conversion needs of vehicles, so many parts of electric vehicles are also indispensable to the blessing of power semiconductors.

3, the car sensor is the input device of the car computer system, its role is to run the car in a variety of working conditions information, such as speed, the temperature of various media, engine operating conditions, etc., into an electrical signal to the computer, so that the car is in the best working state. For example, oxygen sensors, tire pressure sensors, water temperature sensors, electronic gas pedal position sensors, and so on.

In the past, the manufacture of a traditional car generally required about 500-600 chips, with the electrification and intelligence of the car, the number of chips required is naturally more. It is understood that the average number of chips required per vehicle in 2021 has reached more than 1,000.

As a core "big household", new energy vehicles need a large number of DC-AC inverters, transformers, converters and other components, these demand for IGBTs, MOSFETs, diodes and other semiconductor devices has also increased significantly, a better new energy vehicles need chips may reach about 2000, the demand is very amazing. At present, control chips and power semiconductors are out of stock.

C

Why does the lack of cores last so long?

Since the second half of 2020, the shortage of automotive chips has become the main theme of the semiconductor industry.

In 2020, the epidemic broke out, and car sales were weak. Subsequently, the OEMs cancelled a large number of chip orders, allowing wafer foundries and semiconductor IDMs to transfer production capacity, especially those of automotive microprocessor chips using advanced processes, to consumer electronics and data centers.

But the recovery of the auto market in the second half of 2020 far exceeded expectations, and OEMs tried to restore previously planned vehicle production.

More importantly, in the context of double carbon, new energy vehicles will continue to increase in 2021, and major automakers are increasing investment in new energy vehicles with larger chip consumption.

As a result, demand for automotive chips has seen a V-shaped recovery in 2020 and 2021, while significantly exceeding pre-pandemic levels.

In the face of the recovery and outbreak of the demand side, the supply side is seriously unable to keep up.

Internationally established manufacturers are very cautious about expanding production, and Infineon's CEO said that the automotive industry is accustomed to purchasing chips at low prices, resulting in semiconductor suppliers not having the incentive to expand production capacity. The CEO of ON Semiconductor also has a similar statement, most of the automakers use the Just-in-Time punctual management model, requiring chip suppliers to passively cooperate - semiconductor manufacturers spend several years, hundreds of millions to billions of dollars to establish chip production capacity, may be cancelled by the automaker 30 days before production. Therefore, semiconductor manufacturers are cautious about expanding production capacity.

The new forces that are eager to try in China are facing great difficulties due to lack of technology, experience and preparation, and the original vehicle-level chip access certification process is relatively long.

In addition, black swan events such as the Texas cold wave during the period, the closure of packaging companies in Malaysia due to the epidemic, and the Fire at renesas plants further hit the extremely long semiconductor production capacity in the supply chain.

These reasons have combined to lead to this historic chip shortage.

D

When will it be relieved?

At the end of last year, Wang Chuanfu, chairman and president of BYD Group, said in public that the electrification of automobiles has brought about major changes unprecedented in a century, and the industrial supply chain system has been reconstructed. In the field of semiconductors, the demand for semiconductors in electric vehicles is 5-10 times higher than that of traditional vehicles. However, because of the 'lack of cores', about 7 million electric vehicles in the world are not produced. Electric vehicles are the first half, smart cars are the second half, and smart cars have a greater demand for semiconductors.

In the face of rising demand, when will the supply side keep up? Opinions vary as to when this chip shortage will ease.

Intel CEO Patch Gelsinger believes that the chip supply and demand balance may not be achieved until 2023, and Infineon Plos also believes that the crisis will continue in 2022.

Some industry observers say the chip market will achieve a soft landing in 2023.

Some professionals said that no one has a crystal ball that can accurately predict the future, but it can be observed when the chip crisis will ease through multiple indicators such as capacity utilization, production line expansion, and chip inventory level.

At the recent press conference held by the State Council New Office to promote the smooth operation of industry and informatization and improve the quality and upgrade, Xin Guobin, vice minister of the Ministry of Industry and Information Technology, said that although the shortage of automotive chips has been gradually alleviated, there is still a certain gap compared with the demand and scheduling plans of vehicle and parts enterprises.

Considering that the world's major chip companies have increased the production and supply of vehicle-grade chips, new production capacity will also be released this year, and the supply capacity of some domestic chip products is also gradually improving, and it is expected that the supply situation of automotive chips will continue to improve.

And

Who can seize the "crisis opportunity"?

Behind the crisis is often a new opportunity, and the pain often points in a new direction.

From the perspective of development, the international situation is changing, the semiconductor supply chain is fragile, and any problem in any link will seriously affect the entire industrial chain. Whether it is a car chip or a mobile phone chip, there is a risk of supply interruption at any time. Therefore, the domestic substitution of chips is imperative.

At present, domestic chip companies are mushrooming, and a large number of investment plans are also being carried out. In 2020, there are nearly 10,000 integrated circuit enterprises established in China, and the business scope of the new companies established includes the field of semiconductor integrated circuits.

The capital market's financing support for semiconductor companies is unprecedented. Since 2020, there have been 44 newly listed semiconductor-related companies in A-shares, accounting for about 40% of all current A-share semiconductor companies. It can also be seen from the recent announcements of semiconductor listed companies that many are making efforts to make automotive chips.

Domestic alternatives to automotive chips have been unfolding: just like Times Electric (688187. SH) generally takes the high-voltage to low-voltage, rail to passenger car dimensionality reduction route, and cooperates with the automaker to build factories; like BYD (002594.SZ), it mainly achieves self-sufficiency; it also starts from low-end passenger cars like Star Semiconductor (603290.SH); and also like Wingtech Technology (600745.SH) to achieve large-scale capacity release through global mergers and acquisitions.

Specifically, look at star semiconductors and Wingtech Technology, which have been mentioned many times by the ValueLine Research Institute.

Star Semi-Guide:

In 2011 and 2015, Star Semiconductor successfully independently developed the fourth generation of IGBT NPT chip and the sixth generation of FS-Trench chip, and mass-produced and manufactured into modules, successfully breaking the monopoly of foreign multinational enterprises on IGBT chips for a long time, and applied to industrial control and power supply, new energy and other industries. At present, the second generation of Star products is the fourth generation of Infineon's products, and the latest products will be the seventh generation of Infineon.

According to the latest report released by the research institute IHS in 2020, Star Semiconductor is the only Chinese enterprise to enter the top ten of the global IGBT market, ranking seventh, becoming the domestic leader of IGBT. Although it is a domestic leader, its share of the global market is only 2.5%, and the market share of Infineon, the world's number one, is as high as 22.4%.

However, the severe supply shortage faced by overseas giants affected by the epidemic has given domestic companies opportunities. The normal IGBT lead time is 8-12 weeks, while Infineon's current IGBT lead time has been extended to 18-26 weeks, up to 52 weeks. The delivery time of domestic products is about three months, which provides opportunities for Star.

Wingtech Technology:

Research institutions generally expect That Wingtech Technology's acquisition of Nexperia to continue to move from a cash flow business to a growth business. In 2022, the natural growth of Nexperia's original Hamburg and Manchester production capacity, the gradual introduction of its own products from the acquired Newport fab and the imminent release of the new Shanghai Lingang production capacity will provide business increments for Wingtech. Wingtech's semiconductor business is expected to move from a cash flow business to a growth business.

As the Ministry of Industry and Information Technology said, the supply capacity of some domestic automotive chip products is gradually improving.

However, due to the technical level, lack of market experience, high reliability of vehicle-grade products and other requirements, high-end electric vehicles and higher-end intelligent driving are still the barren land of domestic automobile chips, replacing the road ahead...