In the three years since the outbreak of the new crown epidemic, global demand for electronic products has gradually weakened, and the market has cooled faster than companies expected. Last year, the semiconductor industry competed for upstream wafers, burying the risk of high inventory. As demand gradually declined, these hoarded chips began to explode.
Initial Shortage
Affected by the impact of the epidemic, the huge semiconductor industry chain started a global shortage of chips last year.
The extent of the chip shortage at that time was unimaginable. According to a survey by the U.S. Department of Commerce, as of the end of 2021, the chip inventory of various semiconductor manufacturers was only about 5 days, far less than the 40 days at the end of 2019.
In the face of such a shortage of chips, Liu Deyin, chairman of TSMC, in an interview with the American "Time" (Time), specifically explained the problem of chip shortages, and pointed out that "there must be some people hoarding chips in a certain link of the supply chain".
Indeed, in the case of such a shortage, in order to ensure the normal supply of products, many manufacturers choose to scan a large number of goods and increase chip inventory to resist future risks.
In June last year, the world's nine largest chip manufacturers had a combined inventory of $64.7 billion, a record high. The nine chip factories are: TSMC, Intel, Samsung Electronics, Micron, SK Hynix, Texas Instruments, Infineon, STMicroelectronics, and Western Digital.
Demand Falls
Three years after the outbreak, the boom in electronic consumption brought about by the new crown epidemic began to subside. In the end market, the demand for personal computers, mobile phones and other devices in the global field has begun to decline.
Global PC demand fell sharply in the second quarter of this year, with computer makers shipping 72 million units between April and June, down 12.6 percent from a year earlier, the biggest drop in nine years, according to Gartner.
Major manufacturers in the world have also expressed their pessimism about the prospects of chips in the second half of the year in their financial reports. Intel's chief financial officer, David Zinsner, sees the outlook for the second half of the year as "very chaotic", while Intel has temporarily froze hiring in its PC chip division.
The shrinking of the two major end markets of computers and smartphones has brought downward pressure on the graphics card, DRAM, chip design, and panel industries.
In terms of storage, the three leading manufacturers all expressed pessimism in the second half of the year. In Micron's financial report announcement, customers have reduced their inventory of unused chips, and shipments in the first quarter of fiscal 2023 will drop month-on-month; SK Hynix has also lowered its shipment forecast for the second half of the year; Samsung also said it will flexibly manage supply to avoid over-expanding sales. Even so, the price of memory chips is still falling. According to Trendforce's latest forecast, the average price of NAND will drop by -9% and -7% in the third and fourth quarters; while the average price of DRAM in the third quarter is -6%.
Chips Are Bursting
When stockpiling goods meets the downturn in the terminal market, chips will inevitably explode.
Total PC inventory climbed to $14.8 billion, according to aggregated figures from HP, Dell, Lenovo, and others.
In the first quarter of this year, inventory turnover days for many mobile phone companies also began to rise significantly compared to the same period last year. The biggest inventory adjustment that can be seen at present is also in the field of smartphones. Smartphone terminal companies still have a large amount of inventory, so there is no need to purchase additional chips.
The Explosion Caused Chip Prices To Fall
The decline in demand in the end consumer market, the accumulation of inventories by manufacturers, and oversupply naturally cause the price of chips to decline.
Some STMicroelectronics models have cut prices by more than 80%, and the market for consumer electronics control chips has continued to decline.
Car chip
On the supply side, automotive-grade products such as PMICs, MCUs, IGBTs and a few other products such as industrial control power management chips and amplifiers are still in short supply.
At present, the delivery cycle of automotive IGBTs is 50 weeks or more, and the gap between supply and demand is as high as 40%-50%. At the same time, the delivery time of automotive MCU chips has exceeded 40 weeks. STMicroelectronics has raised the price of MCU chips again. Its order visibility has reached 18 months, which is much higher than the planned production capacity in 2022. With the recovery of automobile sales, the prosperity of automobile chips is relatively high. relatively firm.
According to the feedback from multiple agent distributors, the product delivery time for new orders such as Infineon, ON Semiconductor, ST, NXP, Microchip, ADI (Maxim, Linear), Renesas, Qualcomm, Texas Instruments, etc. has not yet been shortened. Supply and demand are very tight, and there is no trend of price decline at present, and there have even been news of price increases from manufacturers such as Microchip and ST.
It is understood that since the beginning of this year, the entire semiconductor market has been in a downward cycle. Although the product prices of international manufacturers are still high and the supply gap of automotive-grade chips is still large, most customers are in a wait-and-see state, and more and more customers are willing to accept high-priced products. less.
