The sudden outbreak of the epidemic in early 2020 has had a serious impact on the lives of people around the world, and the chip crisis at the end of 2020 has put the global car market into a dilemma. The continuous fermentation of the chip crisis has caused the Chinese auto market to suffer an unprecedented impact, unable to produce, no car to sell, and delayed delivery... And so on, and even many car companies announced a temporary suspension of production or reduction of production. It also cost the auto industry billions of dollars in revenue losses.
Looking back at the Chinese auto market in 2021, "lack of core" has become one of the inevitable topics. The continuation of the lack of core turmoil, coupled with multiple factors such as repeated epidemics and rising raw material prices, the global auto market has spent an extraordinary 2021.
The latest forecasts show that in the first half of 2022, the automotive industry will still have defects.
Although the domestic epidemic situation has been slowly controlled, but the foreign situation is still grim, the chip shortage of major car companies has not been alleviated, for Chinese car companies, this continuous lack of core crisis is a difficult challenge or a development opportunity?
Chip production is highly automated, converting silicon wafers into thousands of semiconductor chips, most of which are produced in developing countries, because finished chips are tested and packaged in less technological factories, mainly manual tasks. Chip sizes range from 1 mm2 to 4 cm2. Wafer diameters range from 150 to 300 mm. The content embedded in the chip is in nanometers, which can be imagined to be very precise.
The cost per chip went up from 30 cents to $50. Most of the chips used in automobiles are low-end chips. The number of chips in a car ranges from 1000 to 4000. Advanced models have more chips, the amount of chips used is determined by the number of functions, when a car has advanced driver assistance systems, then it will need more chips.
So it is not difficult to see why the automotive industry lacks cores, because many cars have begun to emphasize intelligence and automation.
"Lack of core" attribution, supply outstrips demand
According to the latest industry data from AutoForecast Solutions, as of March 20, 2022, the global automotive market has reduced production by 1.158 million units this year, of which the Chinese car market accounted for 6.1%, the cumulative production reduction increased to 71,000 units, and the cumulative reduction in all-round production is expected to climb to 1.884 million units. From a production cut of 11.31 million units in 2021 to an estimated 1.884 million units in 2022, the core shortage that seems to have been alleviated is still in danger.
First of all, the epidemic that swept the world has caused the chip industry to suffer unprecedented pressure, coupled with unexpected conditions such as earthquakes, snow disasters, fires, etc., which have led to power outages in semiconductor factories, the suspension of production and production of individual top suppliers, the shortage of chip production and supply has continued to ferment, and the pressure on global core shortage has been intensifying. If the Russian-Ukrainian conflict turns into a protracted war, it will be a further blow to the global automotive chip industry supply chain.
Secondly, more and more industries and products have joined the application of chips under the popularity of the Internet of Things, and we are familiar with mobile phones, computers, smart electronic products, etc., which are large-scale use of chips in the industry. With the development of automotive intelligence, the automotive industry's dependence on chips is also getting higher and higher, and the intelligent computing speed is much higher than that of the AI chip of the traditional automotive CPU, which undertakes the intelligent computing work of the core of the intelligent automobile era, the emergence of importance, the increase in market demand, and the automotive industry has thus joined the "chip battle". Under the limited production capacity, the rush of chip resources by various industries has made the shortage of automotive chips worse.
In terms of the current lack of core environment, 74% of the chip shortage comes from the automotive driver chip and the automotive main control chip MCU + power supply chip, the rest is the signal chain CAN/LIN and other communication chips, the main manufacturers of missing automotive chips are distributed in the top five manufacturers in the United States, Japan and Europe: Infineon, ENCHI, Renesas, Texas Instruments, STMicroelectronics.
In other words, most of the world's automotive chip production is in the hands of a few countries and a small number of companies, and NXP, Infineon and Renesas Electronics, as the main automotive chip research and development companies, account for 40% of the market supply. As a high-tech industry, it is not realistic to achieve a substantial increase in production capacity in a short period of time, and there is a lack of strength players in the market that can make up for the position, and the phenomenon of insufficient chip production capacity will indeed be unsolved for a while and a half.
Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Association, has publicly stated: "The shortage of automotive chips is a worldwide basic supply problem. The rapid growth of demand for superimposed consumer electronics has led to a certain impact on the demand for automotive chips. ”
Production capacity is constrained, and sales prices have risen twice
According to incomplete statistics, in the past 2021, Volkswagen, Toyota, Nissan, Honda, Ford, Volvo and other car companies have adjusted the production capacity of their supporting factories due to chip shortages, and car companies at home and abroad that have announced the suspension of production due to lack of cores have spoken out from time to time. For the development of China's auto market in 2021, Xu Haidong, deputy chief engineer of the China Automobile Association, summarized it with "strong demand and chip constraints".
According to data from the China Automobile Association, from January to November 2021, domestic automobile production and sales were 23.172 million units and 23.489 million units, respectively, achieving a year-on-year increase of 3.5% and 4.5%.
The global shortage of automotive chips, "chip shortage" does constrain the production capacity of automobiles, but in the face of the growth of consumer demand brought about by the recovery of the market after the epidemic, the general trend of the domestic automotive industry picking up and returning to positive can still enable major car companies to hand over a relatively satisfactory sales report card in 2021.
In 2021, Geely Automobile's cumulative sales volume was 1.328 million units, a slight increase of only 1% over last year, but it still stabilized the position of the annual sales champion in the Chinese brand passenger car market, and surpassed SAIC Volkswagen for the first time, successfully ranking among the top three in the annual list of car companies.
Changan Automobile's 2021 is also stable, with cumulative sales of more than 1.75 million vehicles up 16.7% year-on-year, which is valuable in the environment of weak market growth.
Great Wall Motor's cumulative sales of 1.28 million units in 2021 exceeded its sales target of 1.21 million units, and set a record high, up 15.2% year-on-year.
As the originator of independent new energy, BYD is the biggest winner of new energy in 2021, with a cumulative sales volume of 730,000 vehicles throughout the year, an increase of 75.4% year-on-year, and the pure electric and hybrid market is in full bloom, which can be described as a year of accumulation and thin hair.
Fu Bingfeng, executive vice president and secretary general of the China Association of Automobile Manufacturers, said: In 2021, the total production and sales of mainland automobiles have ranked first in the world for 13 consecutive years. In recent years, independent brand cars have made great progress in "electrification, networking, and intelligence", and the status of automobile power has been further consolidated, and it is moving towards an automobile power.
In the Chinese auto market in 2022, under the epidemic situation, the supply of chips and power batteries, the storm of suspension of production and production reduction is still the same.
For now, the shortage of chips and the limited supply of spare parts have led to a backlog of sales orders, and the two models of white cat and black cat under the Great Wall Euler have stopped receiving orders. Tesla's Shanghai plant and FAW Group's Changchun plant have also been affected by the suspension of production due to epidemic prevention and control.
The decline in production is accompanied by the increase in automobile sales prices, according to industry insiders, the price increase of the automobile market or will become the norm this year and next year, even if the price is not increased, with the increase in the pressure cost of car companies, the original preferential policies will be relatively reduced.
The lack of cores led to a decline in production, while independent brands achieved a double increase in sales and selling prices.
In the final analysis, this is the user's recognition and trust in the product. Chip shortage is temporary, and the strength and charm of the product is indeed consistent, if the product is good enough, even if you need to queue up for chips, etc. delivery, users are also willing, and if the product is not attractive enough, then the chip will become the fuse of consumer empathy.
"Core" opportunities spawn, challenges > crises
We learned that in order to cope with the global chip shortage, chip manufacturers have been speeding up, in order to meet the needs of the automotive industry, at the expense of heavy money to meet the output, chip crisis, but also let the car manufacturers and chip manufacturers to establish a friendship.
In June 2021, TSMC began building a chip factory in Arizona, USA, with a total investment of $12 billion, which will not be put into production until 2024. Relevant data show that TSMC is responsible for nearly a quarter of the supply of the global chip market.
South Korea's Samsung is planning to invest $17 billion to build a factory in Texas. Intel in the United States expands production capacity and breaks ground in Arizona with an investment of $20 billion in September 2021.
In order to improve the supply capacity of chips, STM is building a 12-inch fab that can carry a larger number of chips and increase its capacity by 2.4 times.
For mature German, Japanese and American automobiles, the "circle" of automotive semiconductors has long been deeply rooted, and car manufacturers can get priority local protection even if they are out of stock with their close relationship with semiconductor suppliers.
Toyota, in particular, has very few news reports on the lack of cores, toyota said: Because the lean inventory strategy is targeted, it makes inefficiencies and risks in the supply chain sensitive, identify problems, and take preventive measures.
A few days ago, it was reported that China's automobile production and sales and new energy vehicle market scale ranked first in the world, but the self-sufficiency rate of automotive chips was less than 10%, and the localization rate was less than 5%, resulting in China's automobile industry being large but not strong, and its development was limited.
Among the automotive chips, the most scarce is the MCU chip, which is almost monopolized by foreign chip manufacturers, and the market share of Chinese manufacturers is almost zero except for BYD.
China as a major automobile production country, the domestic automotive chip self-development rate accounted for only 10%, domestic automotive chip research and development capacity is insufficient, but it is the fastest promotion of new energy vehicles in the country, the demand for automotive semiconductors is quite huge, over-reliance on foreign imported chips The dilemma is difficult to break.
The imbalance between supply and demand is the main reason for the outbreak of the "lack of core" crisis, as the world's largest new car production and sales market in terms of scale and sales, domestic car companies are naturally the first to bear the brunt.
Dong Yang, co-chairman of the China Automotive Chip Industry Innovation Strategic Alliance, said: "We have such a large volume, we should have our own chip production capacity. ”
Indeed, in such a severe lack of cores, excessive dependence on imported chips will only make the domestic auto market passive for a long time. If you want to turn the tide of the war, you must turn passive into active, turn crisis into challenge, take this as an opportunity for independent research and development of automotive chips, enhance your own chip research and development strength, get rid of the monopolistic behavior of foreign chips, and realize the freedom of domestic chips as soon as possible.
As a special industry, the automotive industry wants to let the products of domestic semiconductor companies smoothly enter the automotive industry chain, which requires a lot of development energy investment and time verification. Semiconductor manufacturers that can pass the vehicle regulation level certification are a favorable choice for domestic car companies to establish a security supply chain.
Judging from the lack of cores, many small and medium-sized car companies in China have increased the supplier configuration and developed a variety of models through chip products equipped with different manufacturers to cope with the different needs of the market. In terms of internal unity and cooperation, car companies should not only have full trust in domestic suppliers, but also consciously cultivate core enterprise suppliers, assist in the certification of alternative products, and expand a richer supplier network as much as possible to cope with the development of different models and ensure stable supply.
In addition to the channel broadening can create more possibilities, self-research and development is another way for car companies to think of danger in times of peace and cultivate a dual supply chain system.
As a leader in the field of scientific and technological electronic products, the Apple brand makes us feel the importance of chip self-development ability with excellent user experience. Similarly, for the automotive industry, if you want to stand out, self-developed chips are one of the most powerful weapons.
As early as before the lack of core turmoil, BYD has laid out a complete set of industrial chains including new energy batteries and chips. Thanks to the early layout in the semiconductor field, BYD can not only achieve full self-sufficiency, but also has a margin for external supply, contributing to the domestic core shortage crisis. Therefore, it has also achieved the status of the most indifferent Chinese player in the lack of core storm.
In addition to BYD, new power brands such as Weilai and Ideal also have self-developed chips, and many car companies have established cooperation models with Huawei and foreign semiconductor companies, laid out chip research and development in a joint venture mode, and established new businesses for automobile manufacturers, such as Geely Holdings Yijiatong Technology + Arm China established Hubei Core Qing Technology, BAIC + Imagination joint venture established Beijing Core Technology, etc., which not only greatly alleviated the shortage of chips, but also had more prominent advantages in user experience.
The editor has something to say:
As the master of modern technology, the automobile is a complex industrial product composed of more than 20,000 parts, and the chip is a very small part of it, but its importance is particularly critical.
For the current Chinese car market, the lack of core is a crisis and a dilemma, but it is also a challenge and an opportunity.
With the development of new energy and intelligent trends in automobiles, the demand for chips in the future automotive market will become larger and larger, and the requirements will be higher and higher, for Chinese car companies, it is very important to increase the research and development of chip technology and strengthen the control of the chip industry chain.
In 2022, procurement, technology, chip production models have changed, how long will it take for the automotive industry not to be distressed by the lack of cores?