"Lack of core" is a hot word for the whole year of 2021, especially in the automotive field.
According to the latest data from the auto industry data forecasting company AFS (AutoForecast Solutions), as of February 13, due to the shortage of chips, the global auto market has reduced production by about 527,400 units this year, a decrease of 370,500 units as of February 6. vehicles) increased significantly by 42%.
The consumer electronics industry is also unable to escape the impact of core shortages. Many popular models of Huawei, Realme, Honor, and Xiaomi phones are all out of stock.
On January 23, Changying Precision (300115.SZ), a major consumer electronics manufacturer, released its 2021 performance forecast, with an estimated loss of more than 650 million yuan after deducting non-net profit.
The company said that some of the manufacturing bases were affected by the epidemic and customer chip shortages. One of the reasons was the decline in capacity utilization and rising production costs.
Will there be a shortage of cores in 2022?
When will the core deficiency be relieved?
Which opportunities can emerge?
2021 "Lack of Core" Beginning and End
There are many factors that cause the "lack of cores" in 2021.
At the press conference of the State Council Information Office on January 20, Luo Junjie, spokesperson of the Ministry of Industry and Information Technology and director of the Operation Monitoring and Coordination Bureau, said that the shortage of chips is mainly due to two reasons: First, with the continuous improvement of the level of social intelligence, chips are used as smart devices. The most critical component of equipment, demand continues to grow; second, the spread of the global epidemic, and the unreasonable sanctions and suppression of companies in other countries by individual countries have caused a serious impact on the global semiconductor supply chain.
In addition, there are many factors superimposed, which objectively caused the emergence of the problem of "lack of core".
Why is the "lack of cores" in the automotive field the most serious?
"The lack of cores is first manifested in the large-scale shutdown of automotive electronics, mainly due to the lack of related EPS and ETC chips." Zhou Weifang, vice president and secretary of the board of directors of Wanye Enterprise, previously told Yicai that Huawei purchased 180 billion yuan in 2020. Chips have grabbed the production capacity share of major chip factories, and foundries have mainly given production capacity to these head companies, resulting in small and medium chip design factories unable to obtain production capacity.
However, the production volume of automotive electronics manufacturers in traditional chip factories only accounts for about 5%. Therefore, in the case of lack of cores, the production capacity of automotive electronics will be affected first.
According to Zhou Weifang’s description, unlike mobile phone chip design companies that directly communicate with wafer fabs for lack of capacity, automotive electronics do not directly place orders with wafer fabs, and their procurement mechanism is conducted layer by layer: first, the automobile factory arranges capacity, orders the integration factory, and integrates The factory then places an order with the module factory, and then the module goes to the chip, and the industry chain is long.
"So mobile phone manufacturers will perceive terminals about two months earlier than automotive electronics."
Xu Chao, vice president of automotive semiconductor company Xinchi Technology, said in an exclusive interview with China Business News that on the one hand, the global new crown epidemic has swept OEMs to lower their production capacity expectations for the second half of 2020, and the production capacity allocated by the chip industry to the automotive industry has increased significantly. However, various crisis events and natural disasters have caused the overall production capacity of semiconductor manufacturing and packaging and testing to decline.
For example, Malaysia suffered a second epidemic after the global epidemic eased, which had a great impact on automotive-grade chips.
The year 2021 in Taiwan, China will be the year with the lowest precipitation in 30 years. In addition, snowstorms in Texas, typhoons in Southeast Asia, earthquakes, etc., these things are superimposed together and have a direct impact on the supply of production capacity.
Xu Chao said that, on the other hand, the recovery of China's auto market is faster than expected, and the demand for chips has increased sharply, and the procurement cycle of chips generally takes more than half a year, and there is a time difference between the ramp-up of automobile production capacity and cannot be realized quickly. supply balance.
"So it can be seen that if there is a lack of communication between the automotive industry and the semiconductor industry, the lack of cores will exist in stages, but the epidemic has further magnified this matter." Xu Chao said, in addition, there are human factors, many agents and distributors Merchants are viciously hoarding and roasting seeds and nuts.
Optimistic chip demand in 2022
Overall, the market is optimistic about chip demand in 2022.
Global foundry leader TSMC stated at a performance exchange meeting on January 13 that the industry megatrends related to 5G and HPC (high-performance computer clusters) related applications support the long-term structural growth of semiconductor demand.
Wei Zhizheng, CEO of TSMC, said that for the full year of 2022, the entire semiconductor market (excluding memory) is expected to grow by about 9%, the growth of the foundry industry will be close to 20%, and TSMC's foundry revenue is expected to achieve more than 20%. Growth (in US dollars).
IC Insight recently updated the global semiconductor market demand growth rate for the whole year of 2022, which is about 11%, while the growth rate in 2021 will reach 25%.
"2017 was a big year for semiconductors, and the entire semiconductor (supply) was very tight. That year, the global demand growth was around 13%, and 2022 is a high growth close to 13% in 2017." A chief analyst in the electronics industry said.
The analyst believes that semiconductor demand is based on the incremental market, mainly in the three major segments of automobiles, IoT and mining machines.
The automotive market demand is mainly concentrated in 8-inch power semiconductors.
About 30% of the 8-inch wafer downstream is in the automotive field, and this proportion is expected to grow to 60% in the future.
8-inch demand will be tight for a long time due to the high demand for cars.
Xu Chao believes that smart cars have higher and higher requirements for electronic and electrical architecture. In addition to the automotive semiconductor stock market, smart cockpits and autonomous driving have increasingly strong demand for chips in terms of performance, computing power, and stability.
According to Strategy Analytics data, the compound annual growth rate (CAGR) of the automotive semiconductor (including sensors) market is expected to exceed 17.5% from 2020 to 2025.
Excluding semiconductor sensors, automotive semiconductor demand is expected to have a higher CAGR of over 18.3%.
It is predicted that the global automotive semiconductor market will reach $85.5 billion by 2025 and $104.6 billion by 2028 (including semiconductor sensors).
The IoT market needs to use MCU, norflash, WiFi Bluetooth, etc., corresponding to the mature process of 12 inches (28~65nm).
"Looking forward to 2022, we are more optimistic about some companies that can obtain better competitiveness through product upgrades and iterations in the IOT demand. And the overall domestic replacement demand trend has been on the rise (such as MCU domestic replacement demand)."
The analyst believes that the demand for mining machines is mainly concentrated in the 12-inch advanced process.
In the early stage, due to the state's investigation and punishment of cryptocurrencies, the computing power of the entire network of the entire mining machine fell to 1/3 of the peak value, and now it has basically recovered completely.
These are basically new computing power, because it is difficult for mining machines to be shipped abroad, which leads to the general use of newly purchased mining machines to build factories overseas.
The mobile phone process overlaps with the mining machine process. Due to the strong demand for mining machines recently, the mobile phone processor has been squeezed, resulting in some 4G and low-end 5G processors being very nervous.
"On the whole, the three major downstream emerging applications correspond to three different processes. Among them, the 8-inch and 12-inch IoT demand has also climbed up from the bottom." The above-mentioned analyst said.
On the supply side, major fabs have significantly expanded production
From the supply side, major fabs around the world are vigorously expanding production in 2021.
TSMC said in April 2021 that it would spend US$2.887 billion to expand the 28-nanometer mature process at its Nanjing plant, with a monthly production capacity of 40,000 wafers. The establishment of 7nm and 28nm fabs in Taiwan, China, will be completed in 2024.
TSMC stated at the performance exchange meeting on January 13 that in 2022, TSMC's capital budget will be 40 billion-44 billion US dollars, of which about 70%-80% will be used for advanced processes, including 2nm, 3nm, 5nm, 7nm, about 10% of the funds are used for advanced packaging and mask manufacturing, and 10%-20% of the funds are used for advanced technology.
Samsung, UMC, Intel, and GlobalFoundries have also announced production expansion plans in 2021.
At the same time, IC Views statistics show that in 2021, the total investment of semiconductor companies in mainland China in production lines will reach 190 billion yuan. SMIC and Hua Hong Semiconductor, as wafer foundries, are vigorously expanding production. Among them, SMIC International has a layout in Beijing, Shanghai, Zhejiang, Guangdong, and Tianjin, with a total investment of over 76 billion yuan.
Zhao Haijun, co-CEO of SMIC, said at the company's fourth quarter 2021 performance briefing on February 10 that in terms of production capacity, SMIC's 8-inch wafer growth in 2021 exceeded 45,000 expected, and 12-inch wafers also exceeded 1. Thousands of expected.
The final overall growth is about 100,000 pieces equivalent to 8 inches.
It is estimated that the production capacity is equivalent to 130,000-150,000 pieces of 8 inches in 2022, and the total shipment growth will be around 20%.
"But with more advanced processes this year, the ASP will be higher."
SMIC said that in order to continue to promote the expansion of existing old factories and three new factory projects, 2022 will still be the peak period of investment, capital expenditure is expected to be about 5 billion US dollars, and the increase in production capacity is expected to be higher than last year.
SMIC's capital expenditure in 2021 will be approximately $4.5 billion.
Zhao Haijun said, "The Shanghai Lingang project has broken ground in early 2022, and the two projects in Beijing and Shenzhen are progressing steadily. It is expected to be put into production by the end of 2022. After the three new projects are fully operational, the company's total production capacity will be doubled."
Huatai Securities predicts that in 2023, SMIC's production capacity will increase to 916,000 pieces/month (equivalent to 8 inches) on the basis of 605,000 pieces/month in 2021, an expansion rate of 51.4%.
Hua Hong Semiconductor is a leading wafer foundry company in mainland China focusing on special processes. It has a leading position in the field of embedded flash memory and power semiconductors. It is also the largest 8-inch wafer foundry in mainland China.
As of November 2021, the company operates three 8-inch production lines with a production capacity of about 180,000 pieces/month; and a 12-inch production line with a production capacity of about 65,000 pieces/month, which is the world's first 12-inch power device foundry production line .
The lack of cores may be relieved in the second half of the year, and some design factories have to breathe
On the whole, in 2022, the demand for semiconductors is optimistic, and the production capacity is gradually released under the vigorous expansion of wafer foundries, and the "lack of cores" is expected to usher in relief.
Several analysts told Yicai that in the first half of 2022, the problem of core shortage still exists.
"If the economy is operating normally, it will ease in the second half of the year."
Wei Chun, manager of Qianhai Open Source Fund, previously told Yicai that it is expected that the global semiconductor capacity shortage will likely be fully alleviated in 2022, but the impact of factors such as the epidemic on the global supply chain should still be observed in the follow-up.
In 2022, the global semiconductor supply and demand will gradually become balanced, the general shortage will not recur, and the prices of most products will gradually fall.
However, most analysts still believe that if the impact of the epidemic is serious, the time for the relief of core shortages will continue to be delayed.
Structural core shortages may still exist in the second half of the year, and automobiles are still the most scarce area.
Regarding the lack of cores in the automotive field, Xu Chao said that from the perspective of the semiconductor cycle, it is expected that it will return to a normal state in the second quarter of 2022, but there will be core shortages in the future, just with the communication between OEMs and chip companies The deeper you go, the easier it will be to deal with this situation.
Chen Penghui, fund manager of Zheshang Fund, told Yicai that from the perspective of foundry, the best time may have passed.
The cycle attribute of wafer foundry is stronger. For chip design companies, the cost has reached the highest level and will only decrease in the future.
However, foundry prices are still rising.
At present, TSMC, UMC, NSMC, World Advanced and other fabs have all released their price increase plans for the first quarter of 2022.
Regarding the price increase of wafer foundries in the whole year of 2022, Digitimes predicts that the price increase trend from the second quarter of 2022 may converge. In the follow-up, we need to pay attention to whether the leading enterprise TSMC will have a price increase plan in the next step.
Of course, the market also has a more cautious view of "the lack of cores will ease in the second half of the year".
The CEO of GlobalFoundries Semiconductor said that the company's chip production capacity until the end of 2023 has been fully ordered. He predicts that the "lack of core" problem cannot be completely solved in the next 5 to 10 years, and the global semiconductor supply chain may be in a long-term tight supply. situation.