Introduction: With the accelerated transformation of the automobile industry to the direction of electrification and intelligence, the industrial chain of chip supply will also undergo drastic changes.
(Text/Zhang Jiadong Editor/Lou Bing) Although in the second half of 2021, some car companies pointed out that the chip shortage problem in 2022 will be improved, but the oem increases procurement and the game mentality between each other, coupled with the mature vehicle specification chip production capacity of suppliers are still in the expansion capacity stage, the current global market is still seriously affected by the lack of cores.
At the same time, with the accelerated transformation of the automobile industry to the direction of electrification and intelligence, the industrial chain of chip supply will also undergo drastic changes.
The pain of the MCU under the lack of core
Looking back at the lack of cores that began at the end of 2020, the outbreak of the epidemic is undoubtedly the main reason for the imbalance between supply and demand of automotive chips. Although a rough analysis of the application structure of global MCU (microcontroller) chips, from 2019 to 2020, the allocation of MCUs in automotive electronics applications accounts for 33% of the allocation of the downstream application market, compared with the upstream chip designers who can work remotely online, the foundries and packaging and testing enterprises of chips have been seriously affected by the shutdown of the epidemic.
Chip manufacturers belonging to labor-intensive industries in 2020 showed a serious shortage of manpower, poor capital turnover, upstream chip design in the transformation of car companies demand, delayed in full scheduling, resulting in chips ultimately difficult to deliver to the hands of automakers, which in turn led to insufficient vehicle production capacity.
In August last year, ST's Muar plant in Muar, Malaysia, was forced to shut down some plants due to the COVID-19 pandemic, and the shutdown directly led to a long period of chip supply for Bosch ESP/IPB, VCU, TCU and other systems.
In addition, in 2021, the concomitant occurrence of natural disasters such as earthquakes and fires has also caused some manufacturers to be unable to produce in the short term. In February, the earthquake struck Renesas Electronics, one of the world's leading chip suppliers, and in March, the newly resumed Naka plant shut down for more than a month due to fire.
The misjudgment of car companies on the demand for on-board chips, coupled with the upstream fabs in order to ensure the cost and consumption of materials to convert the production capacity of on-board chips into consumer chips, led to a serious shortage of MCUs and CIS (CMOS image sensors) with the highest degree of overlap between automotive chips and mainstream electronic products.
From a technical point of view, there are at least 40 kinds of traditional automotive semiconductor devices, and the total number of bicycles used is 500-600, which mainly include MCUs, power semiconductors (IGBT, MOSFETs, etc.), sensors and various types of simulators, and self-driving cars will also use a series of products such as ADAS auxiliary chips, CIS, AI processors, lidar, millimeter wave radar and MEMS.
According to the division of vehicle demand, the most affected in this core shortage crisis is that a traditional car needs to use more than 70 MCU chips, and the automotive MCU is the main component of ESP (Electronic Stability Program System) and ECU (Automotive Master Control Chip). Taking the main reason for the decline of the Haval H6 that the Great Wall has given many times since last year, the Great Wall said that the serious sales decline in the H6 for more than one month is precisely because of the insufficient supply of the Bosch ESP it uses. The previously popular Euler black cat and white cat also announced a temporary suspension of production in March this year due to ESP supply cuts and chip price increases.
Embarrassingly, although automotive chip factories have built and started new wafer production lines in 2021, and tried to transfer the process of automotive chips to the old production line and the new 12-inch production line in the future to improve production capacity and obtain scale effects, the semiconductor equipment delivery cycle is often more than half a year, coupled with the production line adjustment, product verification and capacity improvement need to take a long time, which makes the new production capacity may be in 2023-2024 to effectively help alleviate the MCU demand of car companies at this stage.
It is worth mentioning that although the pressure has been long, car companies are still optimistic about the market. And the newly built chip production capacity is destined to solve the biggest chip capacity crisis in the future.
A new battlefield under electric intelligence
However, for the automotive industry, the resolution of the current chip crisis may only solve the urgent need for unequal supply and demand in the current market. In the face of the transformation of electrification and intelligence in the industry, the supply pressure of automotive chips will only increase exponentially in the future.
With the increase in the demand for integrated control of vehicles by electrified products, and the continuous rise of FOTA upgrades and automatic driving, the number of chips for new energy vehicles has been upgraded from 500-600 in the era of fuel vehicles to 1000 to 1200, and the number of chip types has also risen from 40 to 150.
Some auto industry experts said that in the future field of high-end intelligent electric vehicles, the number of single-vehicle chips will increase several times, reaching more than 3,000 pieces, and the proportion of automotive semiconductors in the cost of vehicle materials will increase from 4% in 2019 to 12% in 2025, and may be increased to 20% in 2030. This not only means that in the era of electric intelligence, the demand for chips in vehicles has increased, but also reflects the rapid rise in the technical difficulty and cost of chips required for vehicles.
Unlike the low-specification chips required by traditional automakers for fuel vehicle chip processes of 40-45nm and 25% of 45nm or more, the proportion of chips in the 40-45nm process of mainstream and high-end electric vehicles on the market has dropped to 45%, while the proportion of chips above the 45nm process is only 5%. From a technical point of view, mature high-end process chips below 40nm and more advanced 10nm and 7nm process chips are undoubtedly new areas of competition in the new era of the automotive industry.
According to the survey report released by Hushan Capital in 2019, the proportion of power semiconductors in the whole vehicle has increased rapidly from 21% in the era of fuel vehicles to 55%, while MCU chips have fallen from 23% to 11%.
However, the chip production capacity that is being expanded by various manufacturers is still limited to the traditional MCU chips responsible for engine/chassis/body control at present.
For electric intelligent vehicles, AI chips responsible for autonomous driving perception and integration; power modules such as IGBTs (insulated gate double transistors) responsible for power conversion; and sensor chips for autonomous driving radar monitoring have greatly increased demand, which will most likely become a new round of "missing cores" problems that car companies will face in the next stage.
However, in the new stage, what will hinder car companies may not be the capacity problem interfered with by external factors, but the chip "card neck" that is restricted by the technical side.
Taking the demand for AI chips brought by intelligence as an example, the amount of computing of autonomous driving software has already reached the order of double-digit TOPS (trillion operations per second), the computing power of traditional car MCUs can hardly meet the computing requirements of autonomous vehicles, and AI chips such as GPUs, FPGAs, and ASICs have entered the automotive market.
In the first half of last year, Horizon officially announced that its third-generation vehicle specification product - Zhengcheng 5 series chips were officially released, according to the official data released, the 5 series chips have a computing power of 96TOPS, a power consumption of 20W, and an energy efficiency ratio of 4.8TOPS/W. Compared with the 16nm process process of the FSD (fully autonomous driving function) chip released by Tesla in 2019, the single computing power is 72TOPS, the power consumption is 36W, and the energy efficiency ratio is 2TOPS/W. This achievement has also won the favor and cooperation of many automobile companies including SAIC Motor, BYD, Great Wall Motor, Chery, ideal and so on.
Driven by intelligence, the industry's internal volume is extremely fast, starting from Tesla FSD, the development of AI master chip is like being opened Pandora's box, shortly after the journey 5, Nvidia quickly released orin chip to increase the single computing power to 254TOPS, in terms of technical reserves, Nvidia even previewed a single Atlan SoC chip with a single hash rate of up to 1000TOPS for the public last year. At present, NVIDIA firmly occupies a monopoly position in the GPU market of automotive master control chips, maintaining a market share of 70% all year round.
Although the entry of mobile phone giant Huawei in the automotive industry has set off waves of competition in the automotive chip industry, as we all know, under the interference of external factors, Huawei has a rich design experience of 7nm process SoC, but it cannot achieve market-oriented promotion with the help of top chip manufacturers.
Research institutions speculate that the value of AI chip bicycles is rapidly rising from $100 in 2019 to $1,000+ by 2025; at the same time, the domestic automotive AI chip market size will also increase from $900 million in 2019 to $9.1 billion in 2025. The rapid growth of market demand and the technical monopoly of high-specification chips will undoubtedly make it more difficult for car companies to develop intelligently in the future.
Similar to the demand of the AI chip market, IGBT, as an important semiconductor component (including chips, insulating substrates, terminals and other materials) with a cost of up to 8-10% in new energy vehicles, also has a profound impact on the future development of the automotive industry. Although domestic companies such as BYD, Star Semiconductor, and Silan Micro have begun to supply IGBTs to domestic car companies, for now, the IGBT production capacity of the above-mentioned enterprises is still limited by the scale of enterprises, and it is difficult to cover the rapidly rising new energy market in China.
The good news is that in the face of the next stage of SiC replacement of IGBT, Chinese companies are not too far behind in the layout, and expanding the SiC design and production capacity on the basis of IGBT's research and development capabilities as soon as possible is expected to win an advantage for car companies and technology manufacturers in the next stage of competition.
Take a look:
In the face of the chip shortage currently experienced by the automotive industry, chip distributors have hoarded goods and asked for prices in the market. According to the statistics of foreign research institutions, in 2021, the global production reduction caused by the lack of cores exceeded 10.5 million, of which the Chinese automobile market reduced production by 2 million, accounting for 19% of the global total. As of March this year, the cumulative production of global automobiles this year was about 1.1584 million units, of which the Cumulative Production Reduction in China's automobile market was 70,900 units, accounting for 6.1%.
Although it seems that the global chip supply situation has improved, with the situation in Russia and Ukraine, the earthquake in Japan, rising inflation and other new external environmental challenges, the chip supply pressure faced by the global automotive industry is likely to continue for a long time.
On the other hand, this round of "core waste" also exposes the constraints of car companies at the end of the industrial chain, due to the irreplaceable importance of chips in the vehicle continues to increase. Cui Dongshu, secretary general of the Association, pointed out: "In 2021, automotive chips will rise by 5 to 10 times in mainstream channels, and non-mainstream channels may even rise by 10 to 20 times. ”
As of March this year, chip price increases have not stopped, and some international IDM manufacturers have raised the average offer of automotive MCUs by 20% at the beginning of this year. In addition, Infineon, NXP, Renesas, Texas Instruments and STMicroelectronics, the world's top five chip suppliers, are all poised to further increase their offers for automotive MCUs or power devices. Among them, Renesas, Toshiba and NXP have decided to raise the price of automotive chips by 10-20% in the second quarter.
For consumers, the most direct impact of chip price increases is the price of the whole vehicle, Tesla, which has always been priced at cost, has risen by more than 11.56% since the listing of the domestic Model 3 after-drive version on November 19 last year; at the end of last year, the Audi A6L offer, which has always been preferential for 15-20 points in the terminal market, was greatly reduced to 10-15 points, an increase of about 20,000 yuan. This is the case with mainstream joint ventures and luxury brands with mature supply systems, and the late independent brands are obviously more passive in the supply system.
According to ICVTank data, in 2019, Europe, the United States and Japan accounted for 36.8%, 32.1% and 26% of the global automotive chips, respectively, with a combined market share of 93%, while the market share of Chinese companies was only 2.5%. As the world's largest new energy vehicle market, in 2020, China's new energy vehicles will occupy 40% of the global market share, which is in stark contrast to the independent replacement rate of vehicle specification chips. At the same time, the self-research rate of Chinese automotive chips accounts for only 10%, which also means that the only way for Chinese companies to get rid of the "stuck neck" of chips and bid farewell to the "core shortage" is to master the ability to develop and produce vehicle-grade chips.
In fact, the overall improvement of chip demand is not only a severe test of the research and development capabilities of Chinese companies, but also a market environment in which global car companies are completely missing cores, and Chinese car companies are actually ushering in a new round of overtaking opportunities. In 2021, the market share of independent brand car companies will once again stand on the 40% mark and continue to rise. Its core key is precisely because of the continuous strengthening of product hard power of independent brands in the era of electrification and intelligence.
Under the influence of "core shortage", Chinese companies have also gained more time to complete the catch-up of core hardware, which may become the best opportunity for independent brands to fully compete with each other from the product side and the technical side and surpass the joint venture brand.
Under the rapid change of the automobile industry, the competition of vehicle manufacturing capabilities is destined to change to the competition of new industrial chain technology reserves. Just as the importance of battery and hybrid technology under the new energy revolution, the hard power battle of chip design and manufacturing technology is not only an important profit for future auto companies, but also the foundation for car companies to achieve sales expansion and brand promotion.
Goldman Sachs' latest research shows that the current average chip content per car is $350, pure electric vehicle content can reach $770, and high-end smart electric vehicles can exceed $1500, which is 5 to 6 times that of the current basic type of car. Obviously, the current global MCU "core shortage" is far from the end of the chip supply problem, in the face of the advent of the visible era of electrification and intelligence, high-specification chips that are easier to shape technical barriers are also destined to become a must for the next stage of car companies.
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