After the crazy semiconductor price increase lasted for 18 months, it also began to gradually "calm down", from the previous millet, OPPO, vivo and other mobile phone manufacturers have successively "cut orders" can be seen, and it is reported that Samsung mobile phones may also cut mobile phone production by 30 million to 280 million units this year.
Recently, notebook manufacturers have also begun to join the ranks. At present, almost all first-line PC brands have begun to lower their annual shipping targets, with Lenovo, HP, acer and Asus all among them, with an average reduction of more than 20%.
Which links in the semiconductor industry chain will be affected? Which segments will grow against the market? See Wisdom Research will provide a detailed interpretation of the downstream, midstream and upstream links of the semiconductor industry.
01 The demand for smartphones is low, and the high-end and folding screen models of iPhones have grown against the market
At present, the cutting news comes from the mobile phone side, Android and Apple low-end are the main cutting types, the total sales target of the iPhone in 2022 remains unchanged, and the production of the iPhone13 Pro series of high-end models will be increased.
Specifically:
Samsung Electronics expects to cut mobile phone production by 30 million units, from the original planned 310 million units, down to 280 million units;
China's major Android phone brands have cut orders by about 170 million units this year, accounting for 20% of the original 2022 shipment plan;
Apple's iPhone SE production was cut by 20%, and it is expected to significantly increase the production of the iPhone 13 Pro series by 10 million in the second quarter, the iPhone 13 Pro by about 7 million, and the iPhone 13 Pro Max by about 3 million.
Mobile phone chip manufacturers MediaTek and Qualcomm have cut orders for 5G chips in the second half of 2022. MediaTek mainly cut low-end products, cutting orders in the fourth quarter by 30%-35%; Qualcomm cut high-end Snapdragon 8 series orders by about 10%-15%.
See Wisdom Research believes that the boom in smartphone demand will have a clear downward trend from this year.
On the one hand, due to the impact of global inflation, residents' desire to buy non-essential consumer goods will decline; on the other hand, because the new models of Android mobile phones (except for folding screens) have not changed much, and the penetration rate of global 5G smartphones has reached 51% in January this year, exceeding the share of 4G mobile phones for the first time, that is to say, the attractiveness of new mobile phones for users has reached a bottleneck period, and it is difficult to continue to grow at a high level.
Judging from the global smartphone shipment data in the first quarter of this year, the total market shipments were 314.1 million units, down 8.9% year-on-year and 13.33% month-on-month, about 3.5% lower than IDC's forecast in February.
According to the situation of various manufacturers, except for Apple and Samsung, which have increased by 5% and 4% year-on-year, respectively, the rest have declined to varying degrees.
In fact, as early as March, Jianzhi Research has repeatedly mentioned that smartphones will show a downward trend in the next few years from this year. In April, we also commented that although the total number of Apple mobile phones this year is not expected to grow, the demand for high-end models is still very strong.
It is worth mentioning that in the mobile phone track, folding screen models will maintain high growth against the market, and IDC predicts that the CAGR will be about 70% in 2021-2025. However, the total number of folding screen mobile phones is relatively low compared with traditional models, and the global shipment volume in 2021 is about 9 million units.
In addition, due to the high cost of flexible screens and hinge designs, folding models are difficult to significantly reduce prices in a short period of time to increase market share, so more are still in a niche field, and it is difficult to change the total change trend.
02The two major factors of traditional PCs have reduced the demand for disturbance
In addition to mobile phones, the sluggish demand also comes from traditional PCs, including desktops, laptops and workstations. Global traditional PC shipments in the first quarter of 2022 were 80.5 million units, down 5.1% year-over-year. Lenovo slid 9.2 percent and HP slipped 17.8 percent.
See wisdom research believes that the factors that change the demand of traditional PCs, on the one hand, are longer replacement cycles, and compared with mobile phones, the replacement frequency is lower.
Due to the impact of the epidemic in 2020, the demand for traditional PCs such as laptops has been driven higher in a short period of time, and in the fourth quarter of 2021, the global traditional PCs have declined for the first time after experiencing 6 consecutive quarters of growth, and Lenovo, which has the largest market share, has dropped shipments by nearly 12% in the quarter, and this is also the first time since 2020 that the company has experienced a year-on-year decline.
On the other hand, the volatility of the international situation has led to poor expectations.
Originally, some PC manufacturers believed that the demand for laptops in 2022 was affected by the impact of working from home, and there was still a growth guarantee, and the shipment plan was increased, so that parts manufacturers could prepare in advance. The changes in the international situation have greatly affected the supply chain of parts and components, on the one hand, parts manufacturers have to face higher inventory, on the other hand, they have to face declining demand, resulting in a very difficult life in the upstream link, which can also be seen from the financial reports of related companies in the first quarter.
03 The parts link was greatly affected, and the demand for panels/cameras declined
Traditional PCs, smartphones and TVs have shown a downward trend in demand, and the price of panels has fallen sharply from the perspective of parts.
According to data from Witsview, notebook panel shipments fell sharply in April, down -24.9% month-on-month, and the rest of the panel prices, including TVs, surveillance displays, and tablets, have fallen sharply to varying degrees.
In May, the price level, all sizes of panels also declined to varying degrees.
The 65-inch TV panel will fall from $155 in late April to $150; the average price of 55-inch TV panels will drop by $2 at $102; and the price of laptop 17.3-inch, 15.6-inch, and 14-inch panels will all drop by $1 compared with April.
The chart below shows some of the data and the half-year price increase:
Mobile phone LCD panel prices also saw a slight decline in April.
The low price of panels, which are important raw materials for traditional consumer electronics such as laptops and mobile phones, also shows that the market is now in a trend of oversupply. In 2022, the global panel capacity growth is expected to be about 7%, and the growth trend of the three internals from this year onwards is flat, averaging 5%.
In addition, the global production of panels is almost all from China, with the slowdown in downstream product demand, manufacturers will have to face higher inventory and lower sales prices, the profitability of related companies will be greatly affected.
In addition to the panel, cameras and touch chips are also important parts and components of mobile phones, but in the previous financial report of Weier shares, Zhizhi Research also found that manufacturers also had high inventory.
According to the latest data forecast of Qunzhi Consulting in May, the global demand for smartphone camera chip terminals is expected to be about 4.95 billion in 2022, down about 2.7% year-on-year and down 3.4% from the forecast data at the beginning of the year.
04 Wafer foundry demand structure changes, HPC and new energy drive high growth
Due to the low demand for traditional consumer electronics downstream, midstream component manufacturers are also facing high inventory backlogs, so what about upstream wafer foundry?
See Wisdom Research believes that the wafer proxy union has a contrasting trend with the difficult situation in the middle and lower reaches. On the one hand, due to the diversification of wafer needs, it is not limited to mobile phones and traditional PCs. For example, automobiles and HPC (high-performance computing) are seen as new sources of growth to replace traditional consumer electronics in the next 5 years.
According to the financial report of TSMC, the world's first fab foundry, in the company's operating income structure of 22 years of Q1, HPC has replaced smartphone growth as the company's largest source of revenue, accounting for 41% of the company's revenue, an increase of 6% year-on-year, while smart phones only increased by 1%.
Moreover, the company also said that HPC will be the strongest driver of long-term growth. From the application point of view, HPC downstream accounts for 50% of commercial, defense and government units account for 25%, scientific research accounts for 15%. The demand for HPC will continue to grow due to the demand of digital economy, smart city, intelligent manufacturing and so on.
According to TrendForce's forecast, the HPC market size will continue to grow through 2027, and the growth rate in 2022 will be the highest level of 7.3% in recent years. In addition, both NVIDIA and AMD believe that HPC chips will enter a high-boom trend and increase orders to supply chain partners by more than 30%.
On the other hand, the demand for wafers from electric smart cars will continue to grow at a high speed, and from the perspective of TSMC's revenue structure, the proportion of automotive wafers will increase by 1 percentage point month-on-month to 5%.
The impact on the income structure is still relatively low, but this is due to the fact that smart cars are still at a very cutting-edge stage, such as the technology of automotive computing power, automatic driving and other aspects of the industrial chain is not very mature, with the advancement of technology and the release of new products, the demand for wafers of smart cars will also grow at a high speed, it is only a matter of time.
In summary, the demand for fabs has undergone structural changes, and HPCs and automobiles will replace mobile phones and traditional PCs as a source of power for high growth in wafer demand.
In addition, TSMC's overall price increase of 5%-8% at all nodes began in January 2023 also shows that the demand for wafers is still strong. And the capital expenditure of fabs is also growing to expand the new production capacity, as follows.
It is worth noting that the revenue structure of the wafer foundry will become the key to the differentiation of future performance. Because HPC has relatively high technical requirements, more is the demand for pulling advanced processes, and the automobile needs more mature processes such as IGBT in the short term, and the future penetration rate of intelligent driving is still the demand for advanced processes.
In addition, IGBT has also become the focus of attention in the wafer market in the past two years, and this year it still shows a situation where supply is less than demand.
Compared with the traditional consumer electronics field, the current demand volume of this part of the wafer is still very small, but under the general trend of global energy conservation and emission reduction, new energy reform has also become one of the important trends, especially China's global leadership in the photovoltaic industry, and domestic manufacturers are very active in the expansion of wafers required for this part.
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Mobile phone and computer manufacturers have played the prelude to "cutting orders"