(Economic Observation) The global lack of "core", Chinese cars may welcome the "core" opportunity

　　China News Service, Beijing, January 14th, title: Global lack of "core", Chinese cars may welcome "core" opportunities

　　China News Agency reporter Wang Qingkai

　　Entering 2021, the global automobile industry can be described as "two worlds of ice and fire."

　　On the one hand, new forces in car building are entering the game: the domestic Tesla Model Y cuts the price by more than 100,000 to compete for the market, Weilai releases the electric car ET7, Apple and Hyundai build cars, Baidu and Geely want to get a share...

　　On the other hand, global auto companies have successively announced production cuts or even halted production due to the lack of “cores”: in China, auto companies such as FAW-Volkswagen and SAIC-Volkswagen have announced reductions in production schedules; abroad, auto giants such as Ford, Toyota, and Nissan have also announced production cuts.

Trapped by the "core"

　　Recently, the German car company Volkswagen Group and auto parts supply giants Continental Group and Bosch Group have issued warnings that the global shortage of automotive chips will affect automotive production and has threatened the security of the global automotive industry supply chain.

　　The demand for chips in traditional cars is mainly in parts such as engine control, body, battery management, and in-car entertainment control.

However, as the degree of intelligence increases, the demand for chips in automobiles is increasing.

　　Data show that in 2018, China's automotive semiconductor market was 61.16 billion yuan (RMB, the same below), a year-on-year increase of 15.6%.

The industry expects to exceed 100 billion yuan in 2021.

　　The sudden and ongoing outbreak of new coronary pneumonia is the fuse of the "core shortage".

Affected by the epidemic, at the beginning of 2020, the global auto market forecasts are pessimistic. As semiconductor manufacturers that plan production capacity by orders, most manufacturers choose to reduce production capacity or even shut down factories without receiving enough orders.

　　But contrary to expectations, the auto market will recover better in the second half of 2020.

Especially in China, which has a huge auto market, the epidemic was quickly brought under control. The second half of the year even ushered in an abnormal fever, and car sales were not affected much.

According to data released by the China Association of Automobile Manufacturers on the 13th, China's car sales in 2020 fell by 1.9% year-on-year, which was much better than expected.

　　The production capacity of auto companies has recovered significantly, but chip production capacity has not kept pace in time.

The "mismatch" between the two parties is serious.

The supply cycle of chips is 8 to 12 months, and the phenomenon of "core shortage" is currently occurring, which can be traced back to the period of the epidemic.

　　In addition, the “lack of cores” in the automotive industry is also related to the “competition” of consumer electronics products.

During the epidemic, the demand for electronic products such as mobile phones, notebooks, and tablets has soared, which has squeezed the production capacity of automotive chips to a certain extent.

　　The above superimposed factors have caused an imbalance between global chip supply and demand.

The result of short supply is price increases.

It is understood that the current price increase of some automotive chips has reached 50% to 100%.

China's "chip" opportunity?

　　Crisis is often a "danger" China and Tibet "opportunity."

Industry insiders believe that with the industry’s sudden increase in the importance of automotive chips and the ever-increasing demand for automotive chips, opportunities for domestic automotive chip manufacturers have emerged.

　　At present, China's automobile chip card neck phenomenon is serious.

The data shows that the import rate of domestic car companies' front-mounted chips exceeds 95%, and the import rate of after-mounted chips exceeds 80%. The scale of domestic autonomous car chips accounts for less than 10%, which fails to achieve safety, independent control.

Under the current situation, it is urgent to solve the problem of China's automobile chip card neck.

　　The "core shortage" incident in the car, on the other hand, is also forcing China's chip industry to become bigger and stronger.

When the demand for foreign chips cannot be met, more car companies or parts suppliers can only seek support from domestic chip manufacturers.

This is a rare opportunity for domestic chip manufacturers.

　　In recent years, many automotive chip manufacturers have emerged in China, such as Xin Chi Technology, Horizon and other manufacturers.

These companies have also expressed their stance recently that they will make efforts to manufacture automotive chips.

　　To solve the problem of car chip shortage, some powerful car companies are also making efforts.

BYD is undoubtedly the earliest domestic car company in the chip field.

　　As early as 2004, BYD established a semiconductor company and has accumulated more than ten years of chip development and production.

When most car companies were facing a chip shortage, BYD stated that its self-produced chips can not only be self-sufficient, but also have "surplus external supply."

　　According to data disclosed by BYD in September last year, there are currently more than 1 million vehicle-level power devices based on IGBTs.

Since 2007, BYD has also been simultaneously conducting research and development of automotive-grade MCUs.

　　An industry insider revealed that BYD is mainly cooperating with Huawei.

In his view, the biggest hope for domestically-made car chips is Huawei.

According to his understanding, at least three to five domestic auto brands are already using Huawei's central control system, which is equivalent to chip plus software.

"Huawei may be the main force in breaking through automotive chips, but it will take time."

　　In addition to the “BYD+Huawei” combination, there are also domestic automotive chip combination R&D manufacturers such as “SAIC+Infineon”, “BAIC+Imagination”, and “Geely+Arm”.

However, the industry generally believes that the road to China's auto chip "breakthrough" is long and difficult.

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