What is the impact of the drought in the chip industry?

Since 2020, the problem of chip shortage caused by epidemic situation and insufficient production capacity has been one after another. 202 1 shows no sign of slowing down. Like a fallen domino, the soaring chip price has spread to the upstream wafer manufacturing.

A person in charge of a company said that the cameras they produced need main control chips, memory chips, WiFi chips and other components. At present, in addition to the difficulty in ordering, the prices of many chips have also risen to varying degrees. Due to the difficulty in ordering, this year's expansion plan has also shrunk dramatically.

The report pointed out that in the shortage tide, many terminal enterprises even placed orders in panic according to the previous purchase volume. While terminal enterprises grabbed chips, chip manufacturers were also busy snapping up raw wafers for making chips from their upstream.

A person in charge of a wafer manufacturing industry in Shenzhen said that during the epidemic, the demand from consumer electronics, industrial markets and automobiles soared, and most of them needed 8-inch wafers. The surge in demand has led to a continuous shortage of 8-inch wafer production capacity in the market.

Many well-known IGBT chip design companies in Chinese mainland said that due to the tight supply of 8-inch wafers, the supply of IGBT chips is also very tight, and even some products are out of stock. As soon as they come out, they will be snapped up by relevant downstream enterprises. This phenomenon has hardly happened in the past.

Affected by the shortage of automobile chips, many automobile manufacturers have issued notices to cut production and stop production. Chen Shihua, deputy secretary-general of China Automobile Association, recently admitted that the shortage of chips began in late February last year, which had a great impact on the production in the first quarter of this year and may also have an impact on the second quarter.

Extended data

Reasons for chip shortage and price increase

Generally speaking, the main reason for the shortage and price increase is the contradiction between the sharp increase in order demand and the inability to increase chip production capacity quickly.

From the supply side, the 8-inch wafer chip is the most popular product at present. This chip is widely used in consumer electronics, automobiles and other terminals. The original production capacity is not tight, including TSMC UMC, Singer and SMIC, all of which have 8-inch wafer production lines. However, due to the availability of production capacity, the cost-effectiveness of expansion is relatively low, and the recent capacity expansion is limited.

After the raid, the shipments of home office equipment, including laptops and tablets, increased significantly compared with the first half of this year, which further aggravated the shortage of production capacity.

In addition, Huawei was sanctioned by the United States, allowing the former to sweep a lot of goods in the chip market before the September 15 ban came into effect. After Huawei limited production, domestic manufacturers such as Xiaomi and OV began to stock up for the market share vacated by Huawei.

After smelling the lack of production capacity, manufacturers of all sizes had to increase their inventory, increase orders for fabs and "lock in production capacity". Compared with the sharp increase in demand caused by "running away", it takes a long period to expand the production of chips, especially wafers. The production line generally takes more than three years from input to completion to mass production capacity.

The impact of the final capacity shortage is transmitted from the wafer foundry to packaging testing, module suppliers and downstream terminal manufacturers. The entire industrial chain collectively raised prices.