A small shortage of chips will become the norm in the future, and the solution to the chip shortage cannot rely solely on "grabbing" and "waiting".


"Small" chips reflect the "big" reshaping of the supply chain

　　Text/Guangzhou Daily All Media Reporter: Deng Li

　　Still the chip!

The auto industry is ushering in a new wave of price hikes for this tiny part.

When Xu Daquan, Executive Vice President of Bosch China, sat at the door “waiting for the core” with the heads of Geely and Great Wall at the end of December last year, perhaps they did not expect that they were still experiencing the “core shortage” until June this year. .

　　From the end of 2020 to May 2022, the automotive industry is the industry that has been most affected by the global chip shortage and has lasted the longest.

The chip shortage, which has lasted for a year and a half, is quietly reshaping the automotive landscape in terms of supply chain, technology, and industrial planning.

Recently, some industry organizations have judged that in the second half of the year, there will still be a shortage of automotive chips.

In this context, people in the automotive industry have begun to reflect on whether the solution to the chip shortage can only be achieved by means of "robbing" such as "double ordering", or whether the "waiting" source continues to increase production?

Or does the industry supply chain and technology need to be further adapted, reshaped and even iterated?

　　The price rises again and again, and the delivery is delayed again and again

　　"Now you can't look at the chip price, but look at the market dynamics." Mr. Li, the head of NXP's Pearl River Delta distributor, told reporters that the price of a car chip that was only a few yuan in September and October last year had risen to Nearly 1,000 yuan a piece, and now it costs 4,000 to 5,000 yuan a piece.

"Even so, it is still difficult for many OEMs to get the goods. For example, a low dropout voltage regulator chip with a price tag of more than 15 yuan, because of the shortage, it will take a year or even more than a year to deliver the order.

　　The chip shortage, which spanned three years, is still ongoing.

A few days ago, the bosses of many OEMs "broke the news" that there has been another round of price hikes for automotive chips recently.

Shen Hui, founder of WM Motor, said: "According to the price after the price increase, the chip cost of smart electric vehicles has exceeded the battery pack." He Xiaopeng, founder of Xiaopeng Motors, "spit out": some people offer prices of more than 1,000 yuan For chips with a single-digit cost, "the purchase price of chips is only 3.5 yuan to 7 yuan, and the quotation of chip brokers has reached 2,500 yuan to 3,000 yuan, and the price has increased hundreds of times." In WM Motor and Xiaopeng Motors, etc. While car companies are complaining about the lack of cores, there is also news that STMicroelectronics has notified its distributors in the Asia-Pacific region that it will raise prices for all its product lines in the second quarter of 2022, including the company's backlog of orders.

More channel sources recently revealed that with the recent rise in logistics and energy costs, Bosch plans to increase product prices and is currently renegotiating contract negotiations with car companies.

The reporter noticed that Xu Daquan also mentioned the lack of cores many times, and said that he was also constrained by it.

"Bosch does not produce these chips, and it also needs to be purchased." In mid-May, he said that he has been actively maintaining communication with suppliers and customers, trying his best to ensure supply.

In fact, no matter how hard the Tier 1 (Tier 1 supplier) leaders such as Bosch work, they are far from being able to solve the current core shortage problem.

　　The reporter noticed that for a year and a half, the shortage of automotive chips has experienced a series of unfavorable events such as insufficient 8-inch wafer production capacity, TSMC's manufacturing weight, and packaging in Malaysia due to the epidemic.

This year, the problem of insufficient production capacity of automotive chips has not been substantially alleviated.

According to data from U.S. trading broker Susquehanna Financial Group, the chip delivery time in April and May this year reached 27.1 weeks, the longest period since tracking data (2017).

According to the latest data released by the auto industry data forecasting company AFS, as of June 12, due to the shortage of chips, the global auto market has reduced production by about 2.2304 million units this year.

　　Production progress controlled by chips

　　The absolute number of chips in a smart electric vehicle is close to 5,000.

"Currently restricting the production capacity of car companies is concentrated in the fields of automotive-grade MCUs, conventional battery management, motor drives and sensor chips." Gu Zhijun, a senior automotive industry analyst, said that the lack of devices in each stage of "lack of cores" is different. However, everything such as analog, power, and SoC substrates is in short supply, especially the MCU chips required by automotive ECU systems are in short supply.

He pointed out that automobiles not only have greater demand for MCU chips, but also the chip testing time and production cycle are very long, "but paradoxically, the profit of MCU is the lowest, so the initial capacity planning is not sufficient. Now the new capacity, It will not be in place right away, it will take a year or two." According to the data of the Research Department of the Automotive Marketing Expert Committee of the China Marketing Society, the average number of ECUs (electronic control units) for ordinary traditional fuel vehicles is about 70, and the number of ECUs for luxury traditional fuel vehicles is about 70. The number is around 150, while the number of intelligent automotive ECUs is around 300.

　　At present, due to the "chip shortage", global car companies are reducing production on a large scale. First-tier manufacturers such as Volkswagen, Honda, Toyota, GM, Ford, etc. have been reducing production to varying degrees or even suspending production since last year. Hyundai Motor Group said " The number of unpaid orders, orders that cannot be shipped due to lack of materials and other reasons has exceeded 1 million units; because of the "chip shortage", some chip manufacturers around the world have started new production capacity projects, and China has also begun to accelerate the localization of manufacturing. chip.

In the continuous shortage of cores, the industry spearheaded the chip company and the chip industry from the beginning, and now it has begun to rethink the internal supply chain procurement process and project management of auto companies, as well as product technology changes and other dimensions.

　　Future: Slight core shortage will become the norm

　　Although mainstream chip manufacturers such as TSMC, Infineon, Intel, and GF have all officially announced significant expansion of production, it is expected that intelligence will improve medium and long-term supply capacity, and short-term pressure will still be difficult to relieve.

The industry predicts that the construction of vehicle chip production capacity will take a long time to produce and get on the car, and the current expanded production capacity can only be released after 2023.

　　"In the short term, it really depends on grabbing goods." Xu Daquan pointed out that this year's car production will still be largely constrained by the supply of chips.

The reporter noticed that the current third-party institutions, car manufacturers and Tier 1 are relatively optimistic about the chip market expectations.

Experts from the China Automobile Association predict that it will be relieved before the end of 2022, but "a small amount of core shortage will become the norm."

　　Why is the chip still missing?

'Double ordering' exacerbates supply-demand imbalance

　　According to industry insiders, there are serious deviations between OEMs and their judgment on the market demand for Tier 1 automobiles, and the inherent defects in the supply chain of the automobile industry are magnified.

Gu Zhijun pointed out that since the middle of last year, in addition to normal demand growth, OEMs and Tier 1 (ie, first-tier buyers, such as Bosch) have even asked Tier 2 (ie, second-tier buyers) to avoid the problem of misjudging demand in early 2021. The problem of "double ordering" (that is, increasing orders to buffer subsequent chip demand pressures) of automotive chip manufacturers from buyers) has made the imbalance between supply and demand more and more prominent.

　　Infineon revealed that, including unconfirmed orders, Infineon's backlog of orders from January to March this year has increased by 19.4%, from 31 billion euros in the fourth quarter of last year to 37 billion euros.

This figure is more than triple the company's 2021 revenue of 111 euros.

This means that the car chip leader's backlog of orders has tripled its revenue.

More than 50% of the orders are for automotive-related products.

The reason for this is that car companies frequently issue double orders to chip manufacturers.

For example, an autonomous car company placed an order of 120,000/set of a certain vehicle-grade chip to a Tier 1 supplier in April last year. In the case that most of them have not yet been delivered, an additional order of 100,000/set was placed in December last year.

　　"All Tier 1's main long-cycle chip BOM (manufacturing bill of materials) may need to be evaluated by the procurement department and supply chain engineers of car companies." Zhu Yulong, a senior electric vehicle three-electric system and automotive electronics engineer, pointed out: "From the current It can be seen that increasing chip production capacity cannot immediately solve the supply chain crisis plaguing auto companies. This chip crisis has actually accelerated the transparency of the entire electronics supply chain." He said that in 2021, the problem can be pushed to chip companies In 2022, we will return to the OEM itself to explore the root cause of the crisis, and accelerate the industry's response and iteration in supply chain and technology.

　　workaround

　　For car companies, chips may not be able to "grab", and "waiting" for chip production capacity to increase is not a solution, so there are some "workarounds".

　　1 Production "AB scheme"

　　Car companies have found some workarounds, such as reducing production and optimizing structures to deal with "lack of cores".

Some auto brands redistribute their existing production capacity, and tend their limited production resources to high-end models with higher profits and key models with better sales. For example, Honda adjusted resources to ensure CR-V by "reducing production" of Civic; The company began to let some new cars have some configurations of the car companies, such as reducing wireless charging, electric lumbar support, digital keys, advanced audio and other configurations that do not affect safe driving; turning the original pre-installed chips into "after-sales service", such as Ford said that it will Sell ​​"semi-finished" vehicles that lack some chips for non-safety-critical functions, and promise to send the chips back to dealers a year later.

　　"When developing models in the future, we may consider 'Plan A' and 'Plan B'. Once there is a shortage of parts in 'Plan A', we will use 'Plan B' to replace it." GAC Group said, "The lack of cores "Under the environment, in the short term, we will still focus on securing more supplies.

At present, production is scheduled on a weekly basis, giving priority to those models that can achieve mass supply of parts and components, and will arrange for resident personnel to follow up every week.

　　2 Self-sufficiency

　　OEMs are trying to change the traditional supply chain cooperation model and begin to choose to seek direct cooperation with chip manufacturers to get rid of the previous over-reliance on Tier 1.

BYD is a typical example. It has its own BSC brake safety control system in cooperation with Bosch, so it is not affected by the ESP shortage.

According to reports, last year BYD helped many domestic OEMs to solve some of their urgent needs through the chip replacement technology solution.

　　Since the beginning of this year, "becoming a source supplier yourself" has become the goal of some automakers.

Industry insiders predict that it will become a trend to choose to cooperate directly with chip manufacturers to jointly develop, design, manufacture and package chips.

　　3 Reduce chip usage

　　Tesla, which has been adversely affected by the supply of automotive-grade chips, responded by rewriting the firmware and using alternative chips to reduce its dependence on Tier 1 suppliers.

It is reported that Tesla's electrical and firmware teams are designing, developing, and validating new microcontrollers, with 19 types.

Volkswagen Group CEO Diess even praised Tesla's "developing a new controller to solve the problem of lack of cores".