Yufei.com, June 11, “Basically the entire industry is worried about the lack of chips! Now it takes at least a month to order a new car. There is no other way but to wait.” Li Hong (pseudonym), sales manager of a 4S store of Great Wall Motors, helplessly Express. The current situation is that most of the 4S stores do not have existing cars, and the price increase cannot cut the line, and it is not allowed to increase the price, so they can only queue.
The reporter visited a number of auto brand 4S stores in Beijing and learned that the shortage of auto chips that has been fermented since the end of 2020 has now spread to the auto sales side. Major auto brands such as Volkswagen, Ford, Great Wall Motor, and Changan Automobile have all experienced sales. There are few vehicles in stock and the order cycle is prolonged.
According to industry insiders, the shortage of chips is mainly due to the faster-than-expected recovery of car sales after the epidemic and the lag in the increase of chip orders by car companies. The shortage of chips has brought some pressure on car production and delivery, and this situation will continue until the fourth quarter of 2021. Among them, the first two quarters of 2021 are the most tense stages of supply and demand.
Chip production capacity is tight
“The supply of chips has been tight since the end of last year. The company started stocking early, but other companies in the (automotive) industry are also rushing. Chip prices and shortages have recently been transmitted to the sales side, which has brought a certain pressure to car delivery. .” Chen Wei (pseudonym), a regional sales director of Buick, told reporters.
Chen Wei said: “Affected by the new crown pneumonia epidemic, coupled with some extreme weather, overseas auto chip manufacturers stopped or reduced production in the first half of the year, making chip reservations more difficult.”
At the beginning of this year, the earthquake and cold wave caused some production lines of several major auto chip manufacturers in the world to be paralyzed. South Korea’s Samsung Electronics, one of the world’s largest chip makers, said two of its factories in Austin, Texas, were affected by the cold spell. Analysts at Citibank said the Austin factory accounts for about 28% of Samsung Electronics’ total chip production capacity.
Global chip giants such as NXP Semiconductors and Infineon Technologies have also previously closed their Texas factories due to power outages. Industry insiders said that Texas has gathered the production lines of many of the world’s major auto chip manufacturers. The shutdown caused by this Blizzard has made the global automotive chips in short supply even worse.
Japan was hit by natural disasters such as earthquakes. The earthquake with a magnitude of 7.3 on the Richter scale in the eastern seas of Fukushima, Japan has brought a huge shock to Japan’s Fukushima and Miyagi prefectures. It is reported that a number of Japanese semiconductor companies are located in these two counties.
The secretary of the board of an A-share chip company told reporters: “The degree of electronification of fuel vehicles and electric vehicles is very high. As long as a tiny chip lacks one, it will affect the delivery of vehicles.”
AutoForecastSolutions data shows that due to the continued impact of chip shortages, the cumulative number of global car production has reached 2.99 million. The chip problem will continue to ferment, and may eventually cause the global car production to stop reaching 4.09 million.
Recently, Ford, GM, Honda, Volkswagen and other car companies have been forced to reduce production due to chip problems. Tesla CEO Elon Musk said Tesla has experienced “supply chain challenges.” In March, Tesla’s Fremont, California, factory was closed for two days due to a shortage of chips.
In March 2021, Tesla China announced a price increase of 8,000 yuan for the Model Y. In May, Tesla’s US official website announced that it would increase the prices of Model 3 and Model Y models in some US regions. Tesla said the price increase was mainly due to fluctuations in manufacturing costs.
Prioritize the supply of new energy vehicles
A Geely Automobile sales manager said: “Now chips are given priority to supply new energy vehicles, cars are more expensive, and the profits are higher. Under the influence of environmental protection, new energy and other related policy subsidies, major auto brands have launched new energy vehicles. Consumers’ consumption concept is also constantly changing, and orders for new energy vehicles are increasing rapidly.”
Relevant staff of BYD confirmed the recent shortage of vehicle sales: “The main reason is that the new DM-i model is too popular, and the market response exceeds expectations. Other flagship models such as the Han and Tang are directly available for sale. In response to the hot sales, For problems such as shortage of stock, the company has urgently coordinated resources and prioritized production.”
Due to limited supply-side production capacity, it is difficult to increase production capacity in the short term, and chip suppliers are also seeking to change the production capacity structure to deal with it.
Deng Anming, assistant to the chairman of Wingtech, said: “The semiconductor devices used in a hybrid electric vehicle are worth about US$710, and power semiconductors account for nearly half of them. The semiconductor devices used in a pure electric vehicle are worth about US$1,400. Power semiconductor devices account for 55%. The company gives priority to ensuring the supply of power semiconductor devices.”
An executive of an IDM chip manufacturer said: “In order to strive for production line resources and try to meet the supply demand, the company has made moderate price adjustments for some products with tight supply and demand according to customer structure, product line terminal applications, etc. to ease the tight supply and demand pattern. .”
Independent production to ensure supply
According to data from the China Association of Automobile Manufacturers, the number of on-board chips in modern vehicles is increasing, and the amount of chips used in new energy vehicles is generally higher than that in traditional fuel vehicles. It is estimated that in 2022, the number of automotive chips used in traditional fuel vehicles in my country will be 934 per vehicle, and the average number of chips in new energy vehicles will be as high as 1,459.
Chip supply has become a “stuck neck” problem for the automotive industry, especially the development of new energy vehicles. Leading auto industry leaders such as BYD and Tesla have already laid out their layout in the industrial chain.
The above-mentioned BYD related staff said: “BYD batteries and IGBTs are independently developed, not only for self-supply, but also for external supply. At present, the company’s Fudi battery is actively promoting external supply, and has negotiated cooperation with many domestic and foreign OEMs. In the current process of spin-off and listing of BYD Semiconductor, there is no doubt about its external supply capability.” In May 2021, BYD announced that the company plans to spin off its holding subsidiary BYD Semiconductor to list on the GEM of the Shenzhen Stock Exchange. After the spin-off is completed, BYD will still maintain control over BYD Semiconductor.
BYD said that in the future, BYD Semiconductor will focus on automotive-grade semiconductors to simultaneously promote the development of semiconductor business in the fields of industry, home appliances, new energy, and consumer electronics, and is committed to becoming an efficient, intelligent and integrated new semiconductor supplier.
In April 2019, Tesla unveiled its Full Self-Driving (FSD) chip for the first time. In the same year, Tesla’s self-developed autopilot chip was put into mass production, with a computing power of 144TOPS, making Tesla Autopilot an industry leader in technology and cost control.
The relevant person in charge of Great Wall Motor said that at present, Great Wall Motor is actively taking various measures to actively respond, including purchasing chips on a global scale, accelerating the layout of the chip industry, and strengthening the construction of the system in the chip field, etc., in an effort to alleviate the impact of the tight supply of chips.
Li Bin, founder and CEO of NIO, said: “The entire automotive industry is facing the challenge of chip shortages, and this is not just our family’s business. At present, the general consensus in the industry is that the supply of chips in the second quarter of this year is difficult, and the third quarter (chip shortages) ) will ease.”
CITIC Securities pointed out that the main reason for the shortage of chips is that the recovery speed of automobile sales after the epidemic exceeded expectations, and the increase of chip orders by car companies lags behind. Other reasons include consumer electronics stockpiling in advance to seize production capacity, global 8-inch wafer production capacity is tight, and the earthquake in Japan, snowstorms in the United States and other short-term shutdowns of some fabs.
CITIC Securities predicts that the chip shortage will continue until the fourth quarter of 2021. Among them, the first two quarters of 2021 are the most tense stages of supply and demand.
At present, under the background of the popularity of intelligent vehicles, the shortage of cores is becoming more and more intense, which has seriously disrupted the balance of supply and demand in the automotive market, and is even driving subtle changes in the industry structure.
When will the “core shortage” be relieved? In this regard, many domestic car companies believe that the supply of chips will ease in the third quarter. But TSMC CEO Wei Zhejia said in a conference call on April 15 that the shortage of some “critical semiconductors” (mobile phones, TVs, cars) will continue at least until the end of this year, or even 2022.