The recent automotive chip shortage is affecting more than just Volkswagen, a car company.
Previously, Honda Motor announced it was adjusting its production pace due to chip supply shortages, and January production in Japan would be reduced by 4,000 units, according to Japanese media reports.
Last Monday, after announcing the temporary closure of its SUV plant in the U.S. state of Kentucky, Ford announced a one-month shutdown of production at a German plant responsible for its best-selling models in Europe due to a chip shortage and weak demand.
Over the weekend, General Motors canceled an overtime schedule scheduled for Jan. 23 to reduce vehicle production because it has not yet received enough chips.
Korean media sources said it was the first time GM had cut production due to a chip shortage.
Why is there a shortage of car chips?
The reason for the shortage of car chip supply so far may be traced back to the outbreak early last year.
Because of the New Crown epidemic, the production capacity of major chip suppliers in Southeast Asia and Europe have been affected to a greater or lesser extent. Coupled with a sharp decline in auto sales in the first half of last year, car companies have reduced orders for chips. There are not enough orders in hand, the upstream chip makers can only take the initiative to choose to reduce production capacity.
However, to our surprise, the automotive industry has gradually shown a strong recovery trend since the second half of the year.
First look at the Asian market represented by China. According to data from the China Association of Passenger Vehicle Manufacturers (CAPM), China's passenger car market in 2020 saw a 41 percent drop in sales in the first quarter, and then a sharply narrowed decline in the second quarter of the year, down only 3.6 percent. In the second half of the year, China's passenger car market resumed its growth trend, achieving the highest growth rate in the past two years of around 7% for six consecutive months. In December alone, retail sales of passenger cars reached 2.288 million units, up 6.6 percent from a year earlier.
Meanwhile, new-car sales in Europe fell 24 percent year-on-year last year, but Volkswagen, PSA Group and other carmakers all saw some growth in December, according to data from the European Automobile Manufacturers Association.
According to the statistics, Volkswagen Group's license plate volume increased by 8.2 percent in December, and all of its brands, except Audi, showed positive growth. Porsche sales were up 17 percent and the Volkswagen brand was up 16 percent, while Vauxhall, part of the PSA group, was up 19 percent in December.
Volvo's sales fell 21 percent in the first six months of last year, but the second half of the year was Volvo's biggest ever, according to Swedish media reports. Nearly a third of Volvo's cars sold in Europe were rechargeable models.
The unexpected speed of the market's rebound caught a host of car companies and automotive chip suppliers by surprise.
In the downstream OEMs blame the upstream chip production capacity can not keep up with the time, chip suppliers can not help but cry foul: the production of the chip would have taken a lot of time, but the car companies are only now coming to the booking, and is a centralized burst of large-scale purchases, and how can we blame us for the shortage of automotive chips now.
Car chip supplier NXP's CEO Kurt Sievers (Kurt Sievers) previously accepted the German media interview, said clearly, "the speed of business recovery is much faster than we expected. Many customers ordered too late, resulting in us not being able to keep pace in certain areas."
In fact, in addition to the reason that the market is recovering too fast and car companies and chip suppliers are lagging behind in their response, the trend of intelligence in various industries around the world is also generating more demand for chips, and the contradiction between the supply and demand of chips is further aggravating.
Related sources analyze, home office during the epidemic, learning to drive the demand for tablet computers, smart phones and other electronic products. At the same time, the development of medical devices and other technologies, such as surgical robots and other intelligent medical products, also gave rise to the industry's demand for chips.
At the same time, with the popularization of 5G applications, not only consumer electronics, medical, industrial, communications and other fields will be accelerated in the direction of intelligent development, the resulting demand will also further squeeze the capacity of the automotive chip space.
At the same time, as the automotive industry gradually shifts to electrification and intelligence, compared with traditional fuel vehicles, electric vehicles and smart cars also need to carry more chips.
It is understood that, according to the division of functions, automotive chips can be roughly divided into three categories. A class is responsible for the arithmetic, such as MCU chips, distributed in the processor and controller system; the second category is responsible for the conversion of power semiconductors, such as IGBT and MOSFET, distributed in the power supply and interface; the third category is used in the sensors, mainly used in a variety of radar, airbags and tire pressure detection.
An intelligent electric car in addition to loading motor, but also equipped with driver assistance systems, intelligent cockpit, sensors and other intelligent equipment, there is no doubt that the installation of much more than the traditional fuel car car chip.
According to statistics, last year's global installation of in-vehicle MCU chips exceeded 2.5 billion.
Overall, in addition to the epidemic and other force majeure factors, with the continuous progress of science and technology, the world, whether it is in the field of consumer electronics, communications, medical, automotive and other industries have shown a clear trend of intellectualization. As a key component of the realization of intelligent, chip market demand is bound to further expand.
However, the existing chip manufacturers, on the one hand, its production capacity is not enough to keep pace with market changes, on the other hand, its market demand and supply situation of the lack of prediction, planning on the short-sightedness further aggravate the contradiction of the lack of automotive chip production capacity.
Shortage of automotive chips brings chain reaction
The impact of the shortage of automotive chips is most intuitively reflected in the purchasers of automotive-grade chips.
It is understood that the automotive chip industry chain can be roughly divided into three levels.
Upstream, is to STMicroelectronics, NXP as the representative of the semiconductor manufacturers; midstream, is the need for chip production, such as ESP, ECU and other integrated modules of the first-tier suppliers, Bosch, Continental as the representative; and downstream, is from the first-tier suppliers to purchase integrated modules of the vehicle manufacturers.
For the Tier 1 suppliers that purchase chips directly from manufacturers, the response to chip shortages is the fastest and sharpest because they are closer to the production side of chip manufacturing.
As early as December last year, a group of tier-1 suppliers, including Bosch and Continental, broke the news one after another that they were unable to further process and produce related integrated modules due to a lack of chips.
At that time, Bosch said, due to some of the car's electronic components rely more and more on the chip, and the epidemic on the global chip production caused a blow to the automotive production of the components required will be in short supply; Continental said, due to the demand for a large increase in the semiconductor manufacturers, although they have been in the beginning of the expansion of production capacity, but taking into account the semiconductor industry's delivery cycle, the shortage will still last at least half a year!
By the end of the year, there will be a shortage of semiconductors.
By the lack of upstream chip production capacity, Tier 1 suppliers not only began to face the situation at the end of last year, the automotive electronic components can not be further production, two months later, they are also facing the Volkswagen and other car companies to make a huge amount of money claims.
When the impact of the lack of upstream capacity was transmitted to the tier-one suppliers, the automotive companies also had to start facing up to the problem of production cuts and shutdowns caused by the chip shortage.
Bernstein Consulting forecasts that car production will drop by 2 million to 4.5 million units in 2021 due to the shortage of automotive chips, equivalent to about 5 percent of the annual global car production in the past decade, Caixin reported.
When market demand for a product far outstrips supply, the scales gradually tip in favor of the seller, and it's not surprising that chipmakers have been asking for price increases.
On November 26 last year, the semiconductor company NXP said to its customers that, affected by the epidemic, they are facing a substantial increase in material costs and a serious shortage of chips, so the company decided to raise prices across the board, the rate of increase will be at least 5%.
November 30, Japan's semiconductor manufacturer Renesas Electronics also released a product price increase notice. The notice indicates that due to the increase in the cost of raw materials, Renesas will increase the price of some power semiconductors, control of automobile driving and other automotive chips, effective date of January 1, 2021.
Since then, there has also been news that Switzerland's STMicroelectronics has similarly proposed a price increase of between 10% and 20%.
The global chip shortage or the rise of domestic chip opportunities?
Just as the supply of automotive chips is insufficient, chip makers are raising prices, domestic manufacturers BYD said it has sufficient production capacity in the chip, not only for self-supply, but also for export.
According to the research of the brokerage firms, the shortage of chips in the automotive field is mainly due to the 8-bit MCU chips, auto parts in the ESP, ECO modules need to be used in the MCU.
As the domestic automotive semiconductor industry's leading enterprise, BYD has entered the MCU field since 2007. At present, BYD has industrial-grade general-purpose MCU chips, automotive-grade 8-bit and 32-bit MCU chips, and battery management MCU chips and other series of products, of which automotive-grade MCUs have exceeded 5 million pieces of installed capacity.
In addition to MCU chips, power semiconductors in automotive-grade semiconductors are also facing a shortage, and the situation is even more severe than that of MCUs.
Different from the MCU chip responsible for the arithmetic, the power semiconductor represented by IGBT is mainly used for energy conversion, which is the new energy automobile motor electronic control system and DC charging pile of the core device. the good or bad of the IGBT module will have a direct impact on the new energy automobile power release speed.
BYD, as the leading domestic IGBT manufacturer, has ranked second in China's new energy vehicle IGBT market in 2019. However, its market share is only 18 percent.
In fact, although domestic enterprises such as BYD, Starr Semiconductor, and China Car Times have already possessed the R&D and production capacity of chips such as IGBTs, in general, the automotive chip market is still monopolized by international vendors such as Infineon, STMicroelectronics, and Renesas, and the self-developed rate of automotive chips only accounts for 10 percent.
However, the current global shortage of automotive chips is likely to become a stepping stone for the growth of domestic chip makers.
Media reports said that the second half of the domestic sales of new energy vehicles continue to grow, international suppliers are y affected by the epidemic led to a lack of production capacity, IGBT chip supply and demand contradictions are becoming more and more prominent, and the industry even once rumors that the supply cycle has been extended to 52 weeks of news. As the delivery period of the chip has been lengthened again and again, some car companies continue to wait for the original supplier shipments at the same time, but also began to try domestic IGBT, and gradually with BYD Semiconductor, Star Semiconductor and other domestic chip suppliers to establish contact.
The total market value of IGBTs is expected to exceed $5.2 billion in 2021, according to data from Chipboard Consulting. As China's electric vehicle market continues to grow, the demand for IGBTs will also increase year by year, and by 2025 China's IGBT market will reach RMB 21 billion.
In the context of the international supplier capacity can not keep up with the demand of car companies, the automotive chip market continues to expand, December 30 last year, BYD issued an announcement to subsidiary BYD Semiconductor spin-off listing.
January 20, BYD Semiconductor Co., Ltd. announced that it has accepted the IPO tutoring, and recently completed the tutoring record in the Shenzhen Securities Regulatory Bureau, and at this time from the BYD announcement, just 20 days in the past.
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