The impact of chip shortages on the auto industry continues to spread

Lack of "core" forces the supply chain to be autonomous and controllable

  Our reporter Yang Zhongyang

  The impact of the shortage of passenger car chips on the automobile industry continues to spread, and my country's automobile production is also greatly affected, which requires active responses from multiple parties.

  As the world's largest market for new car production and sales, my country already has a mature automotive industry chain.

Chips are in a hurry, once again highlighting the urgency and necessity of independent controllability of the supply chain of the industrial chain. Chinese companies must strive to break the situation where high-precision core components for vehicles are controlled by others.

  The impact of chip shortages on the auto industry has spread from the public to more auto companies worldwide.

A few days ago, car companies such as Ford, Fiat Chrysler, etc. announced the temporary suspension of production at some plants, and car companies such as Volkswagen, Toyota, Honda, and Nissan have also launched global production reduction plans.

  Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, said that the shortage of passenger car chips in my country will begin in late December 2020, which will have a great impact on the production in the first quarter of 2021, and may have an impact on the second quarter, which requires active response from multiple parties. .

Automobile production is forced to "slam on the brakes"

  On January 8, Ford Motor announced that due to the shortage of semiconductor chips, the production line of its factory in Kentucky, the United States was forced to stop production.

  "The epidemic has affected the supply of chips and related parts." Honda also launched a production reduction plan to reduce the production of Civic and Accord cars in North America.

It is reported that before March this year, Honda may reduce the production of tens of thousands of cars.

  In addition to reducing the production of full-size pickup trucks produced by the Texas Assembly Plant by about 40%, Toyota’s joint venture in southern China, GAC Toyota, has also reported a production line suspension of production. The production line is mainly responsible for the Camry and C-HR models. Production.

However, as of press time, production has been resumed, but it has been told that production capacity has been compressed.

  In December of last year, Volkswagen publicly stated that due to the shortage of semiconductor chips, it would adjust its production in China, North America, and even Europe, and the implementation would begin in the first quarter of this year.

In response to the news that the FAW-Volkswagen Chengdu plant's Jetta model was significantly reduced due to chip shortages, Volkswagen China stated that it is currently monitoring developments and optimizing resource allocation across the country, hoping to fill this gap in the next few months.

  According to industry insiders, in the face of the lack of "core" problems that cannot be resolved in the short term, automakers have to adopt "selective" production reduction measures, that is, to give priority to ensuring the demand for high-end models and popular models with higher profits.

For example, Volkswagen's strategy in China is to take the lead in reducing the output of low-priced models and prioritize meeting the needs of high-end brands and best-selling models.

  "Although some car companies will cause a gap in the production capacity of some models, not all cars are not produced. Now there are many competing products in the market. Consumers can choose similar models from other car companies." The impact on the domestic terminal market, the national passenger Cui Dongshu, secretary general of the Auto Market Information Joint Council, believes that the impact of the decline in production is limited. “At present, many domestic auto companies still have inventory of models. Auto companies can adjust production plans to minimize the impact as much as possible. in stock".

  In response to consumer concerns about price increases, he said that the Chinese auto market has entered a period of adjustment in the past two years, with fierce competition among auto companies and increasing price wars.

In the mainstream joint venture or self-owned brand market, even if the supply of some models of some auto companies is insufficient in the short term, there will not be a significant increase in terminal prices.

Otherwise, there is no competitive advantage.

Multiple factors lead to a shortage of chip supply

  Automotive chips are roughly divided into three categories: The first category is responsible for computing power, specifically processors and controller chips, such as central control, ADAS (advanced driving assistance system) and automatic driving systems, as well as engine, chassis and body control, etc.; The second type is responsible for power conversion for power supplies and interfaces, such as IGBT (insulated gate bipolar transistor) power chips used in EVs; the third type is sensors, which are mainly used for various radars, airbags, and tire pressure detection.

  According to reports, there are two main types of chip shortages. One is the MCU (Micro Control Unit) used in ESP (Electronic Stability Control System).

In the Chinese market, generally models of more than 100,000 yuan, especially mid- to high-end models, will be equipped with ESP.

It is a part of the car's active safety system and can prevent sideslip.

The other is the MCU in the ECU (Electronic Control Unit).

ECU is widely used in various control systems of automobiles and is called "driving computer".

  The China Automobile Association said that Europe and Southeast Asia are affected by the new crown pneumonia epidemic, and major chip suppliers have reduced production capacity or shut down factories. This has further exacerbated the imbalance of chip supply and demand, leading to the risk of chip shortages or even cut-offs in some downstream companies.

The recovery of China's auto market has exceeded expectations, which has further promoted the growth of chip demand.

  In addition, driven by the development of 5G technology, the demand for chips in the consumer electronics field is increasing rapidly, and chip production capacity has encountered challenges, which has seized the production capacity of some automotive chips.

  More importantly, with the continuous improvement in the degree of electrification, intelligence, and connectivity of automobiles, the value of automotive chips continues to increase, which promotes the global demand for automotive chips faster than the growth rate of vehicle sales, which also directly causes The supply and demand of chips are out of balance.

"Chips are becoming more and more important to automobiles. In the future, automobiles will surpass PCs and mobile phones and become the largest demanders of chip companies." Yu Kai, founder and CEO of Beijing Horizon Robotics Technology R&D Co., Ltd., predicts, "The scarcity of automotive chips will Is continuous."

  Chinese automotive chip companies need to be stronger

  As the world's largest market for new car production and sales, my country already has a mature automotive industry chain, but an unavoidable fact is that high-precision core components for vehicles such as chips are still in the hands of foreign companies.

The shortage of chips this time has once again highlighted the urgency and necessity of independent control of the industrial supply chain.

  Relevant data show that in 2019, my country's automotive chip import rate exceeded 90%, and key system chips such as advanced sensors, vehicle networks, three-electric systems, chassis electronic control, ADAS, and autonomous driving were overly dependent on imports.

Among them, the value of IGBTs in electric vehicles is second only to power batteries, more than 98% need to be imported from abroad, and the price is 1.2 to 1.8 times that of foreign countries.

  "The shortage of chips this time has also made many car companies realize that they cannot rely too much on overseas in the supply chain, and they should also look for suitable chip suppliers in China. This is also an opportunity for our independent chip R&D manufacturers." Said that since the release of Horizon Journey 2, China’s first automotive-grade AI chip designed and developed by Horizon, it has successfully signed a double-digit mass production fixed-point model. “Last year, 160,000 cars were delivered to consumers with Horizon chips. There are 1 million vehicles".

  "China's demand for in-vehicle chips with independent and controllable technology is undoubtedly strategic." Zhao Fuquan, Dean of the Institute of Automotive Industry and Technology Strategy of Tsinghua University, said that on the one hand, the state must provide relevant companies with effective policies and resources. Support; on the other hand, Chinese car chip companies should not be limited to supplying local car companies, but should actively expand and strive to enter the supply system of foreign car companies. Cooperation with top international car companies will help accelerate the improvement The strength of China's automotive chip companies.

  Although Chinese chip companies still have a long way to go before they enter the global automotive supply chain on a large scale, it is only time for the participation of Chinese chip companies to increase, and the proportion of their chip business is equal to or even surpassing that of the vehicle business. problem.

Zhao Fuquan firmly believes that through the joint efforts of many parties, China's automotive chip companies will be cultivated.