For anyone, there is no clear end to the epidemic; for semiconductors, there is no clear end to shortages.
The rumble of a chip shortage began in December last year, and it has always been a snowball problem, which is getting bigger and bigger. The scarcity of semiconductors has spread from the automotive industry to the highly complex smartphone supply chain. The shortage of products includes all components from small signal diodes to power devices to microcontrollers.
In today's digital world, all digitization runs on semiconductors, which are the basis of almost all modern products (from cars and kitchen appliances to telecommunications networks, schools, and medical equipment). As the shortage of chips continues, I am afraid that it is not just people in the industry that will be affected, but all of us who live in digitalization.
Since the outbreak of the epidemic in 2020, a series of "natural and man-made disasters" such as the trade war between Canada and the United States, the blockage of the Suez Canal, the fire in Japan, and the lack of water in Taiwan, the semiconductor shortage storm has come violently and long. The original forecast is that the shortage of stocks in the second half of 2021 will be eased, and the face will be beaten, but it will become more severe.
In May, Taiwan's epidemic heats up, and Taiwan is trapped in a drought. Major semiconductor manufacturers such as TSMC may be blocked in production. People are worried about the stability of Taiwan's IC industry supply chain. The closure of Malaysia, a major semiconductor production center and the outbreak of epidemics in many countries such as India and South Asia have also brought a certain degree of negative impact on the production capacity of semiconductor-related fields.
The price increase of many semiconductor manufacturers in May is one of the manifestations. ST's MCU out-of-stock phenomenon has continued for several months, and the price has doubled in a short period of time. DP Microelectronics, Shanghai Xinlong Semiconductor, and Fuhong Chuangxin also issued product price adjustment notices in May, announcing that from May 6th, all products will have a full price increase, and some products will have a price increase of up to 30%. Osram also announced that since May 25, traditional ballast products have had the largest increase of 20%, and LED power supply and module products have the largest increase of 10%.
The upcoming June will also rise! On May 17, ST announced that prices will increase across the board on June 1st! This is another price increase after the price increase in January this year. Subsequently, TOSHIBA (Toshiba), ON Semi (An Senmei) also issued notices of increase.
Even more frightening is that it will continue to rise in August! Recently, Taiwanese MCU manufacturer Holtek has decided to start the second wave of price increases starting on August 1. Holtek just raised its quotation by 15% on April 1, but with the continuous influx of orders and the price increase of wafer foundries, Holtek could only raise prices again. It is reported that this time according to different fabs and packaging, products will have different increases, which is roughly lower than the previous 15%.
In fact, since entering the second quarter of 2021, the semiconductor industry has begun to usher in a new round of price increases. According to incomplete statistics, since April, more than 30 semiconductor companies have issued "price adjustment letters" with price increases ranging from 10% to 30%. Most of the reasons for price increases are related to the continuous increase in upstream raw material costs.
The foundry prices of companies such as UMC, SMIC, and Power Semiconductor Manufacturing Co. have increased by about 10% to 30%. Although TSMC announced that it has not raised prices, its cancellation of sales discounts for two consecutive years is also equivalent to "disguised price increases." .
The continuous rise of foundry prices has also brought greater cost pressures to IC manufacturers. To conduct pressure, IC design has increased product prices. Since the second quarter of 2021, many semiconductor manufacturers such as Xinjie Energy, Rockchip, Jingfeng Mingyuan, Xinlong Semiconductor, Aiwei Electronics, etc. have issued price adjustment notices. Among them, Jingfeng Mingyuan, Xinjie Energy, and other companies have carried out Multiple rounds of price increases.
The continuous price increase has made many manufacturers uncomfortable, but what is even more unbearable is the extension of the delivery period. Even after months of shortage, the delivery time of semiconductor products is still drastically extended.
On May 20, Maxim also issued a notice to its cooperative distributors that the delivery period was extended to more than 26 weeks. The notice stated that due to the growth of automobiles, 5G, Internet of Things, and consumer devices, the semiconductor industry will usher in unprecedented growth. However, due to the impact of the new crown pneumonia, the production capacity of the semiconductor industry is in short supply, resulting in a prolonged product delivery period.
According to research by Susquehanna Financial Group, the chip ordering time (the time interval between ordering a chip and delivering it) increased to 17 weeks in April, indicating that users are increasingly eager to obtain supplies. This is the longest waiting time since the company started tracking data in 2017. The delivery time of the power management chip reached 23.7 weeks in April, which is about four weeks longer than the waiting time a month ago. At the same time, the ordering time for industrial microcontrollers has been extended by three weeks. The lead time of NXP Semiconductors, a major automotive chip supplier, has now exceeded 22 weeks, compared with approximately 12 weeks in the second half of last year. The delivery time of STMicroelectronics, another major supplier of automotive chips, increased by four weeks in April, the most exaggerated even exceeding 28 weeks. The delivery time of ON Semiconductor's discrete devices is more than 40 weeks.
The extension of the lead time is accompanied by the company's lack of cores and the suspension of production. At present, due to insufficient chip supply, many European, American, and Japanese car companies have announced plans to reduce production at their factories.
Nissan and Mitsubishi are among the latest automakers to report delays and shutdowns. Nissan will idle its plant in Kyushu, Japan on June 24, 25, and 28 for adjustment. Suzuki and Mitsubishi will also reduce production and stop assembly lines.
Recently, Audi cut production again due to a shortage of chips. Audi will reduce the working hours of 10,000 employees working at its assembly plants in Ingolstadt and Neckarsulm in Germany in June.
No one knows when the core shortage problem will be resolved, but the relevant companies must continue, and they bear huge responsibilities to maintain production. This involves a lot of money, but more importantly, millions of jobs.
The stock shortage at the beginning of the year still has some stocks that can be solved. The automobile industry is the hardest hit. This time, some stock shortages are facing real shortages, and they have spread from the electronics industry to other industries, and it affects everyone. Consumers.
According to the analysis of Goldman Sachs (GS), the shortage of semiconductors has touched 169 industries to some extent. In addition to the automotive industry and consumer electronics industry, it also includes steel products, ready-mixed concrete manufacturing, home appliance industry, breweries, and soap manufacturing. Etc. have been affected by the chip crisis.
Let us start with the car and understand how the shortage of chips affects our economy and life.
On average, each car requires 50 to 150 chips for applications such as driver assistance systems and navigation control. However, due to the shortage of chips, global automakers will lose 110 billion U.S. dollars and reduce production by 3.9 million vehicles this year (data source: Alix Partners).
Although the current production cuts and shutdowns of automakers have not seriously affected the normal car sales of terminal channels, with the prolonged core shortage time, automakers' losses have increased, and the price increase of bulk raw materials represented by iron ore, glass, and electrolytic aluminum will further increase Increasing the cost pressure on the automobile manufacturing industry, the discounts and promotions in the automobile market in the second half of the year will inevitably be lower than in previous years, or it will usher in the rare general increase in car prices in recent years.
Consumer electronics manufacturers have also been hit by shortages. In the future, we will rush to buy more expensive electronic products. If components are out of stock and price increases, companies may pass on part of the cost to consumers. The most direct impact on consumers is the price increase of electronic products. Electronic products are becoming more expensive, but what is even more uncomfortable is that they may not be available at all!
For example, graphics cards have risen sharply this year, and the price has almost tripled. Mobile phone products are becoming more and more difficult to buy, especially some flagship products with high power. At present, almost all flagship products equipped with Snapdragon 888 on the market need to be snapped up. Many manufacturers have adopted a diversified product portfolio to market, and many of them are equipped with Snapdragon 870 and other flagship chips. This is also the helpless move of manufacturers in the face of shortages.
Apple also said that due to the "tight chip supply", the production of iPad and Mac is affected, and revenue is expected to decrease by US$3 billion to US$4 billion this quarter. "Our forecast will be controlled by supply, not controlled by demand." Apple CEO Tim Cook said. It is not an exaggeration to say that if Apple makes a new phone today, it may not be shipped until the end of this year.
Based on the current situation, it is very likely that mobile phone products will begin to usher in price increases after June.
In addition to cars and smartphones, computer chips are also used in various household products, including TVs, washing machines, and refrigerators. But due to the shortage of chips, it may be difficult for you to buy a refrigerator or dishwasher next! If you can buy it, it will only be more expensive.
The chip shortage is hitting the production of TVs and home appliances.
The chips in home appliances are simpler and less profitable. In the current shortage of chip production capacity, chip manufacturers give priority to allocating production capacity to high-margin products, and home appliance chips are ranked last. Since March and April this year, the production of home appliances has been stagnant for a while, the original full-load production line was also forced to be reduced, and the delivery of orders had to be postponed.
A small TV manufacturer said: “Unless you pay higher prices, it will become increasingly difficult to obtain key components. Because of rising raw material costs, we have to raise TV prices.” According to market research firm NPD, and Compared with last summer, the price of large-size TVs has soared by about 30% in recent months.
Judging from the current situation, the price increase trend of electronic products is relatively obvious. Recently, those who have seen favorite products can consider starting earlier. 618 may not have a good price.
Under the lack of a core, we are facing the risk of product price increase, company bankruptcy, employee unemployment, and even the entire social and economic downturn. In this regard, the author feels deeply powerless, because this problem cannot be solved by one person, nor can a country. What is needed is the joint efforts of the whole world.
At present, the semiconductor industry is globally integrated and has the characteristics of high concentration and a large investment. The highly concentrated industrial structure has led to a slow response to the market, and the characteristics of large investment make it impossible for chip giants to expand production capacity as they please. This is an important reason why the core shortage problem is difficult to solve quickly.
Therefore, only by integrating the strength of various countries and continuously strengthening the opening, cooperation, innovation and common development of the semiconductor industry can the current situation be effectively alleviated.
As the leading electronic one-stop e-commerce platform in China, Huaqiu Mall has launched a "scarce spot" and provided alternative solutions for some of the products in short supply to alleviate the urgent needs of major manufacturers as well as PCB production.
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