China News Service, August 19th (Zhongxin Finance reporter Wu Tao) Recently, the "chip price avalanche" has caused heated discussions. Some chips have dropped from the high of 200 yuan last year to the current 20 yuan a piece. Compared with not long ago, there are still big guys" "Flying" asking for chips, as if overnight, the price of chips "avalanche".
Chips enter a price reduction cycle?
According to the July IC price tracking monthly report released by Debon Securities, in July, the price of medium and low voltage MOSFETs fell month-on-month, and the medium and high voltage products rose steadily.
MCU (Micro Control Unit) channel prices continued to fall.
Nordic Bluetooth SOC chip prices remain weak.
This chip is suitable for wearable products and IoT applications, and its price will start to decline after reaching a high point at the end of 2021.
Data map.
Photo by China News Service reporter Wu Tao
A reporter from Zhongxin Finance and Economics observed that many chips have a similar price cycle to the above-mentioned Bluetooth chips. They reached a historical high at a certain point in time last year, and then began to decline intermittently, which has continued to this day.
Debon Securities pointed out that in the first quarter of 2022, the price of TI's general-purpose DC/DC chip channel began to decline, but at present, it is generally stable.
Of course, there are many extreme price reductions for individual chips, but the price reduction cycle is as long as several months or even a year, and it is not an overnight "avalanche".
According to media reports, some chips will be priced at about 200 yuan in 2021, and the current price is only about 20 yuan each, only one-tenth of the highest price.
Some employees in the chip industry told Zhongxin Finance that the chip covers a very wide range, and there are many internal tracks. Generally speaking, some consumer chips, such as mobile phone chips, have a large backlog of inventory, and the competition is fierce. Weak demand, certainly a relatively large price impact.
However, in areas such as automotive electronics, chips are still in short supply.
Why are prices falling?
Chip prices are naturally affected by supply and demand. As mentioned above, a direct reason for the decline in chip prices is weak demand.
Some securities analysts have analyzed the reasons for the intensified competition in the industry, lower-than-expected downstream demand, and too fast expansion of upstream production capacity.
Taking the mobile phone industry as an example, data from the China Academy of Information and Communications Technology shows that in the first half of 2022, the total shipments of mobile phones in the domestic market totaled 136 million units, a year-on-year decrease of 21.7%, of which 5G mobile phone shipments were 109 million units, a year-on-year decrease of 14.5%, accounting for During the same period, mobile phone shipments accounted for 80.2%.
In addition, last year's "core shortage" caused many chip companies to increase production horsepower and even expand production. The Everbright Securities Research Report pointed out that the number of local wafer fabs and capacity planning have increased beyond expectations, and the import cycle of overseas chip equipment has changed. Long exacerbated this phenomenon.
Data map: PC storage memory stick.
Photo by China News Service reporter Wu Tao
These expansions of production capacity are also reflected in corporate financial reports.
China Micro Corporation recently issued an announcement predicting that the operating income in the first half of 2022 will be about 1.97 billion yuan, a year-on-year increase of about 47.1%.
In the first half of the year, Zhichun Technology's total new orders amounted to 2.362 billion yuan, a year-on-year increase of 37.33%.
Of course, there is no shortage of reasons for the hype of the chip price. Some analysts pointed out that the channel price only reflects the dealer's quotation, and the fluctuation range is large, while the original price may be relatively stable.
SMIC's financial report shows that in the second quarter of this year, both shipments and average selling prices have increased slightly.
Will there be too many chips to the bad street?
According to public information, 1.15 trillion chips will be shipped globally in 2021.
But as big as new energy vehicles and as small as bluetooth headsets, all kinds of chips are required, and the consumption is extremely high. A new energy vehicle may consume thousands of chips, and an autonomous vehicle may consume more.
Needless to say, the demand for chips for new energy vehicles in a booming industry, even the mobile phone industry, which is now generally considered to be weak in demand, has ushered in a year-on-year growth in the first month of this year.
The latest data from the China Academy of Information and Communications Technology shows that in June, mobile phone shipments in the domestic market increased by 9.2% year-on-year to 28.107 million units.
In addition, the annual equipment repair of some chip companies may be arranged in the second half of the year, and the production capacity may be affected. It is worth observing whether these conditions will be fed back to the chip price.
For example, SMIC said, "The annual maintenance of some factories was not carried out in the second quarter, making the overall impact of the epidemic on output lower than expected."
Therefore, the number of chips may not necessarily reach the bad streets. After all, the demand is still there, the economy is recovering, and automotive chips will even be in short supply.
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