| Tiger Sniff Technology Group
The author | MarutoYama
The header image | IC Photo
"The CEO of ASML said that there are already companies abroad that have begun to disassemble washing machine chips."
"Yes, at least they still have to tear it down."
At 10:05 a.m., Wang Tao's flight departed from Xinzheng Airport on time, and if there were no accidents, he would arrive in Shenzhen Huaqiang North in 4 hours to meet his long-time friend Chen Xin.
Wang Tao has long been accustomed to long-distance life, describing his industry as an antique broker who used to walk the streets and alleys, except that the goods changed from antique calligraphy and paintings to sluggish materials, and the business scope expanded from glass factories to all parts of the country.
The so-called sluggish materials refer to the wafers whose yield cannot meet the needs of downstream manufacturers, and these materials can usually only be sold to processors like him at low prices, or put in the warehouse to eat ash. In contrast, Chen Xin's "dismantling parts" business is easier to understand, simply summarized is to import second-hand circuit boards from abroad, and re-process them after being sorted and reprocessed by factories in Shantou and resold to manufacturers with demand in the industrial chain.
In the context of the global lack of cores, they have been regarded as guests by terminal manufacturers in the past, and they firmly control the pricing power of the latter, but now they are facing an embarrassing situation of no goods to sell.
"In the past, those old materials could not be sold at all, and now even the old materials are no longer easy to find." Wang Tao told Tiger Sniff that the industry calls sluggish materials that leave the factory within two years as new materials, and those that exceed two years are old materials. Today, even if the inventory from ten years ago is sent to the terminal manufacturers, they will still receive it.
Wang Tao is lucky because as long as the domestic fab does not stop production, he can obtain the eliminated wafers to maintain the operation of the business, but Chen Xin, who relies on overseas second-hand circuit boards for business, is already facing the risk of shutting down.
"The price of high-spec Texas Instruments on-board chips has risen hundreds of times, but there is no stock on the market, and the previously imported inventory has long been exhausted." Chen Xin told Tiger Sniff that these chips disassembled on the circuit board of waste cars cannot return to the automotive industry due to the limitation of service life, but in the field of industrial control, used car rules chips have become hard currency because of their high reliability.
However, with the increasingly tense supply and demand relationship in the industry, even the second-hand chips required by the industrial control industry, Chen Xin, they can not be satisfied, and in the modern society with a highly clear division of labor in production, the wave of lack of cores is spreading along the industrial chain, affecting everything.
"Nothing to dismantle"
Three months ago, a freighter departed from the U.S. port of Long Beach and was scheduled to arrive in Hong Kong in 25 days, with containers leased by Chen Xin filled with circuit boards removed from computers, industrial modules, cars and even airplanes.
"The chip removed from the aircraft flight control unit is at least a product from 15 years ago, although the technology is somewhat outdated, but the reliability is extremely high, and there is still a market in some special operations." When talking about the origin of these chips, Chen Xin told Tiger Sniff that since the lack of cores in 2020, they have almost dismantled the things that have chips in the recycling market.
Originally, after arriving in Hong Kong, the circuit boards would be quickly sent to the factory in Shantou, where skilled workers would remove the chips with recycling value, and then restore the chips to the factory state through the process of fading tin, electroplating, and whole feet.
"Will these chips be sold as new products?" In the face of Tiger Sniff's questions, Chen Xin said that there are indeed many merchants who will do this, and most of them are in the Huaqiang North market to complete the "self-digestion", mobile phone stalls will buy a variety of chips from them to replace the damaged parts after buying scrap machines at a very low price, and then hang on salted fish to sell in bulk.
Those "girls' own use of 90% new" mobile phones are the direct products of this industrial chain.
But now the industry is gradually declining. Chen Xin revealed that larger stores will clearly state that they are selling second-hand chips. On the one hand, car regulations, industrial control chips are very scarce, and their profits are far greater than consumer electronics chips, on the other hand, the main body of these recycled chips has also changed from individuals to enterprises.
"It's all in the industry, whether it's recycling chips, they can see it at a glance."
Intriguingly, in this context, the chip recycling business in the North Market of Huaqiang began to return to the right way, Chen Xin these recyclers began to buy testing equipment, the performance of the chip and the remaining service life of the measurement and classification, even if the same chip, its price will vary due to the actual situation.
Of course, they did not do this is not a conscience discovery, in the words of Chen Xin, "the chip shortage on the market will last at least a year and a half, the demand of enterprises is very large, we do not want to do a pole deal." ”
The combination of Huaqiang North + semiconductors sounds very fantastical, on the one hand, it is the product of the barbaric growth of the electronics market, and on the other hand, it represents the frontier of today's science and technology, but under the tide of global core shortage, the waste chips that were originally attributed to the landfill burst out of new vitality under the "one-meter counter".
Under the tide of lack of cores, the declining Huaqiang North has returned to people's vision
Everything seems to be moving in a good direction, but the sudden outbreak of the epidemic in Hong Kong has brought this boom to an abrupt end. Why do recycled chips have to arrive in Hong Kong first? When asked about this question, Chen Xin helplessly said that it was indeed a last resort.
In September 2020, the newly revised Solid Waste Pollution Prevention and Control Law was officially implemented, which clearly stated that the state should gradually achieve zero imports of solid waste. The waste circuit boards recycled by Chen Xin used to be filled in as "second-hand electronic components" at customs declaration, but after the introduction of this law, these materials were judged as solid waste by customs in some regions.
Like Chen Xin, most of Huaqiangbei's dealers in the second-hand chip business now have to set up Hong Kong as a transit point for goods.
But the goods did not arrive safely at the factory in Shantou as Chen Xin had hoped. In February this year, the epidemic in Hong Kong became more and more serious, and the customs in Guangdong almost stopped the import of all goods except for the goods that must be protected, and the second-hand circuit boards that were already wandering in the gray area were naturally among them.
In the past three months, Chen Xin has made countless phone calls to ask when the goods will be released, but he has never been able to get the accurate time.
The old material welcomes the new, mixed
Unlike Chen Xin's gray business, Wang Tao's sluggish material handling business is completely legal and compliant, and is even regarded as a savior by a number of fabs.
In 2016, a semiconductor industrial park in Henan province began construction, and Wang Tao reached a cooperation with the park and established a company in the name of supporting business to deal with those wafers whose yields were not up to standard.
This year, the first circle of friends he sent out was, "Are you still worried about sluggish materials?" The company recycles the stupid materials in the province at a high price. ”
Most of these sluggish materials are those wafers whose yields are not up to standard, a practitioner told Tiger Sniff that in the common six- and eight-inch wafer products, the core grain yield of a single piece must reach at least 90% before downstream manufacturers pay for it, "If it is a small layout, the yield rate should reach at least 95%. ”
In fact, if the price is calculated by the finished core particle, the yield level will not affect the price, but for the packaging and testing plant, the high yield wafer is the guarantee of packaging efficiency, and there is also a positive relationship between the yield and the quality of the core particle, and the reliable yield can represent the quality management level of a fab.
If a company's stupid material hoarding is too much, it will not only prolong the cash cost recovery cycle, but also increase the inventory pressure of the company, especially for those listed companies, and the correlation indicators in the financial report will also be affected.
As a result, wafers with lower yields than expected will usually be handed over to sluggish material recyclers at 20%-40% of the original price, who will handle them uniformly.
Wang Tao told Tiger Sniff that although these wafers are cheap, they are not easy to handle, first of all, these stupid materials will be pulled into the factory, and the workers will identify which core particles are defective piece by piece under the microscope and mark them, and then sort out after splintering, and the rest is the core particles that can be used. The entire process requires manual operation, although limited in scale but not enough for sluggish material handling business.
The picture above shows a silicon carbide MOSEFT wafer chip
At present, the price of dull materials has also risen with the tide of lack of cores, and more importantly, under the influence of the epidemic in Shanghai, sluggish materials have even become scarce commodities.
Shenwan Hongyuan data show that as of now, the market value of semiconductor-related listed companies in Jiangsu, Zhejiang and Shanghai accounts for 62% of the country, revenue accounts for 63%, under the control of the epidemic, it is difficult for these areas to transport wafers or sluggish materials to the outside of the province, and most of the stupid material recyclers do not have packaging capabilities, and must be handed over to the packaging and testing factory to deal with.
The sealing and testing end is precisely the most affected link in the semiconductor industry chain that has been most affected by the epidemic.
Zhao Yi, research director of Jiwei Consulting, told Tiger Sniff, "The epidemic has had different degrees of impact on the design, wafer manufacturing, packaging and testing of the semiconductor industry. Because many factories are closed-loop production management, the impact of the wafer manufacturing link is relatively limited; but the impact of the sealing and testing link is relatively heavy, on the one hand, the sealing and testing industry labor is more intensive, on the other hand, the epidemic has different degrees of impact on its logistics and raw material reserves. ”
The interruption of the industrial chain process not only affects the entry of new products into the market, but also makes the processing of sluggish materials deadlocked, and Wang Tao has to go door to door in the middle of fabs across the country to find those forgotten inventory products that may have been more than a decade ago to maintain the normal operation of the business.
"In the twenty years of my career, I never thought that one day sluggish materials could become a sought-after commodity." For the current market situation of short supply, Wang Tao feels powerless.
Interlocking
In fact, the impact of the global wave of core deficiencies may not have peaked.
According to AutoForecast Solutions, a data forecasting company for the automotive industry, as of April 24, the cumulative production of the global automotive market this year has been reduced by about 158.55 units due to chip shortages. In just one week, global car production was reduced by 87,500 units due to lack of cores.
Another data released by Bloomberg shows that China's quarterly chip production fell by 4.2% year-on-year in the first quarter of this year, the first decline since 2019.
From the perspective of time, the domestic semiconductor town of Shanghai in the first quarter was not affected by the sealing, considering the large-scale impact of the sealing control on logistics since the beginning of this month, the domestic semiconductor shipments in the second quarter may further shrink. Li Yaqin, general manager of Qunzhi Consulting, believes that "the impact of Shanghai sealing and control on the automotive industry and even the consumer electronics industry will appear in the second and third quarters of this year. ”
According to Qunzhi Consulting's calculations, Chinese mainland vehicle production in the second quarter of this year fell from 6.4 million units in the same period last year to 5.7 million units, down 11% year-on-year.
Of course, the problem of missing cores is not recent, and the construction of production lines of major semiconductor manufacturers in the past two years is unprecedented. According to IC Insights, 10 new 12-inch fabs will be put into service in 2022, including battery management chip factories for China Resources Micro and Silan Micro, Winbond's memory plant, Texas Instruments' analog chip factory, and new foundries for TSMC and SMIC.
The commissioning of these fabs will alleviate the pressure of core shortage to some extent, but it will still not be able to reverse the supply and demand relationship in the market in the short term. A practitioner told Tiger Sniff that even in the most optimistic scenario, a 12-inch production line will take at least 3 years from product lighting to full production.
"In the first 6 months of fab production, more work is to debug and run in equipment, and there is no capacity utilization rate at all." The implication is that the large number of fabs put into operation this year may not solve the immediate need.
The large area of the chip is missing, but also let the seemingly incompatible industries have been affected to varying degrees.
Maybe Brazil's butterflies vibrating their wings won't cause a hurricane in Texas, but the lack of MCU chips will really make dairy cows in inner Mongolia pastoral areas spend a hungry winter.
The head of a robotic arm manufacturer based in Anhui told Tiger Sniff that the robotic arms they produced were unable to deliver to customers on time due to the lack of MCU chips. The person in charge revealed that the robot arm was customized by an agricultural machinery manufacturer last year, and the delivery should have been completed in January this year, but at present it can only ask customers for an extension of the delivery time.
"You can actually replace the MCU with a PLC for motor control, but that means we have to reprogram, which may have to be delayed until next year." In the Chinese market, most of the MCU chips have been digested by the new car industry, and the import dilemma of second-hand chips has put the industrial control field into a difficult situation.
It is reported that the core product of the agricultural machinery manufacturer mentioned by the person in charge is silage processing equipment, if the delivery time continues to be delayed, it may seriously affect the domestic silage industry, and then affect the normal operation of the animal husbandry industry.
A new machine under chaos
In some scenarios, this lack of cores even affects the semiconductor upstream industry.
Li Jun, who is engaged in the distribution of semiconductor equipment, sniffed the tiger, just last week, the price of Japan's Disco's second-hand thinning machine has exceeded $600,000, and the new product of this machine is quoted at $50W.
"Even if the second-hand price is higher than the new product, the second-hand market is still in short supply, because ordering a thinner now, Disco will not ship at least a year later, and many fabs simply can't wait that long." Li Jun told Tiger Sniff that the reason why the delivery cycle has been repeatedly extended is that on the one hand, the investment and construction of a large number of fabs has made the equipment supply unable to meet the surge in demand, and on the other hand, the chip supply for Disco equipment is also very tight.
Yes, you read that right, semiconductor equipment manufacturers are worried about the lack of chips.
This has almost become a dead cycle, with wafer equipment manufacturers unable to deliver on time because of lack of cores, and fabs with delayed equipment delivery cycles failing to expand capacity in time to meet market demand.
However, under the chaotic order, it has also spawned the formation of a new order in the semiconductor industry.
"At the beginning of this year, the company asked us to start the development of IGBT products, and we were all very confused." The IGBT products mentioned by Gao Bo, who are engaged in chip product development, have a large market demand in new energy vehicles, and electric control systems, charging pile inverters, and vehicle air conditioning systems are inseparable from this component.
However, the problem is that Gao Bo's company used to focus on MOSFET product development, although the two are power semiconductors, but there are large differences in the technical path, and this company only has a 6-inch wafer production line, while IGBT products used to be mostly based on 8-inch wafer production lines.
"Since the beginning of this year, the industry has clearly been able to feel that it is constantly 'sinking'." The sinking mentioned by Gao Bo reflects a current situation under the lack of cores, that is, manufacturers take the initiative to give up the market to manufacturers with relatively backward technology and production lines.
For example, in the past, TSMC will work with the era of intelligent driving chips and electronic control chips, the former needs 28nm, or even 14nm advanced process, while the latter only needs 90nm mature process, but in the context of the surge in demand for car rules chips, TSMC will devote resources to the production of more profitable intelligent driving chips, the latter market to other manufacturers.
By the same token, products that used to take 12-inch fabs are now downgraded to 8-inch fabs, while products produced by 8-inch fabs are further decentralized to 6-inch fabs, and it is in this market change that Gobbo's company proposes the development of IGBT products.
This has forced chip manufacturers to increase investment in research and development to complete the development of high-specification products, and the domestic semiconductor industry has accelerated the speed of technology accumulation. According to the "2021 Patent Index Report" released by the European Patent Office, in the past year, the global semiconductor patents were 3748, an increase of 20% year-on-year, and from the perspective of the number of patent applications in different regions, the Chinese mainland increased by 40%-50% over the previous year, which was significantly higher than the growth rate of the United States (3%) and Europe (14%).
The surge in the number of patent applications also reflects the unprecedented prosperity of the domestic semiconductor industry, Wind statistics show that 38 of the 86 semiconductor listed companies that have released a quarterly report are close to or have achieved a doubling of net profit attributable to the mother, and even some of them have achieved more than 10 times growth.
Under the global core shortage crisis, the new industry giants seem to be hidden.