At the beginning of this year, there was a short-term shortage of supply in the domestic MCU market due to the outbreak of demand for temperature measuring guns, blood oxygen meters and other epidemic prevention. At that time, the semiconductor industry chain will step up production and emergency dispatch to jointly help epidemic prevention, and MCU manufacturers’ shipments will rise sharply, fully benefiting from the outbreak of epidemic prevention market demand.
Today, the imbalance between supply and demand in MCU market is more and more serious. Industry insiders said that the products of international MCU manufacturers were basically postponed, and new orders were basically not received. In terms of MCU spot market, distributors have been speculating for some time, and the price has basically doubled.
When the supply of large international manufacturers is insufficient and the market is in short supply, it is often the best time for domestic MCU to replace imported products. However, the capacity shortage of upstream wafer factories and packaging and testing factories has been going on for a long time, and domestic MCU manufacturers are trapped in this situation. It is uncertain whether they can seize the market share of the former international large manufacturers, or adjust the price upward to enjoy the market dividend.
Large international factories are out of stock, prices rise and delivery time lengthen
Recently, Renesas, NXP and other manufacturers have issued price increase notices one after another, and the shortage of MCU market has begun to attract public attention.
In fact, as early as November, Fuchang electronics, a well-known international agent, said in the Q4 market report that the delivery time of some manufacturers’ high-end device products (MCU) is basically 15 to 25 weeks. In the fourth quarter, it is expected that the delivery time of some products will be extended and the product price will rise.
It is understood that the normal delivery time of MCU products is about 8 weeks. When purchasing products from large foreign manufacturers, they usually need to book, while domestic manufacturers need to deliver them from stock.
At present, the domestic 32-bit high-end MCU market is monopolized by St, cypress, Renesas and other large foreign manufacturers, while the delivery time of manufacturers including Infineon (cypress), NXP, St, Renesas and so on has been extended, and the delivery time of St MCU has reached 30-40 weeks.
Industry insiders said that the domestic MCU market has been monopolized by foreign MCU manufacturers for a long time. As long as foreign manufacturers are short of supply, it is difficult to guarantee the demand of the domestic market.
Since the beginning of this year, the Malaysian plant of Renesas, a leading international MCU manufacturer, has been shut down due to workers’ infection, and ST has also been on strike. In addition, the capacity of Taiwan based generation plants such as TSMC, liandian and world advanced, as well as domestic generation plants such as SMIC international and Huahong Hongli are full, and almost all MCU manufacturers have capacity constraints.
For a long time, ST’s MCU products have been popular and concerned in the domestic market, with a high market share. Downstream manufacturers generally refer to its chip design terminal products. Therefore, the large shortage of MCU in the domestic market is often caused by ST’s untimely supply to the market.
Industry insiders pointed out that ST is not active out of stock, nor will it be active out of stock. MCU industry out of stock is mainly due to the untimely response to some major market outbreaks, such as 2014’s twist car, 2017’s shared bicycle and other markets suddenly burst out, making ST’s MCU chips out of stock in a large area. Of course, the final result must be the combination of human reasons and market outbreaks.
As for the artificial reasons expressed by the above-mentioned people in the industry, it is often the downstream distributors who are speculating in the market and in short supply. Some distributors can’t lock up the goods and wait for a high price to ship. At the same time, the downstream manufacturers are constantly looking for the source of goods, which is easy to cause panic in the market, resulting in the false appearance of market shortage.
Domestic manufacturers in price war
As for the reasons for the market shortage, a senior executive of a domestic MCU manufacturer said that from our point of view, due to the epidemic situation, the downstream manufacturers were pessimistic about the market in the first half of the year, and they were negative in stock preparation, which led to the failure of active stock preparation in the whole industrial chain. However, the domestic economy recovered very fast, and all the backlog orders in the first half of the year were pressed down to the second half of the year, while the downstream manufacturers rushed to the performance together, The market has entered a period of great shortage.
At the same time, the 5g market has driven the development of many industries, and the demand for 5g related chips has exploded, which is also part of the reason for the shortage of production capacity and supply of wafer factories and packaging and testing factories.
Another person in the industry said that it usually takes half a year from wafer to chip shipment. In the first half of the year, wafer preparation was negative, leading to a shortage of supply in the market. In terms of production capacity, the squeeze of high profit products will reduce the production capacity of low profit products. In addition, large customers worry that they are out of stock and increase the strength of stock preparation. In order to ensure the interests of large customers, the original factory aggravates the shortage of small customers.
A number of people in the industry said that in the case of tight production capacity, there is a serious panic stock in the industry. In order to distribute the goods, customers have doubled the order volume and continuously arranged the orders for production, which leads to increasingly tight production capacity. At present, it has been arranged to the second quarter of next year!
The author learned from the industry that at present, domestic MCU manufacturers are basically casting in SMIC international, Huahong Hongli and other foundry factories, and the production capacity of the packaging and testing factory is more difficult to arrange than that of the wafer factory. Therefore, they generally face the problem of capacity shortage. Zhongying electronics also said on the interactive platform that the company’s MCU chip product supply is indeed insufficient in the near future. Upstream Fabs are short of capacity, which may lead to delivery delay.
In the period of capacity shortage, who can deliver goods to customers more timely will be able to seize the market more. However, the current situation is that although the market is out of stock, the domestic MCU manufacturers also have the problem of insufficient supply of chips. They can only increase the stock, and whether they can seize the market depends on the company’s inventory.
On the other hand, the prices of wafer fabs and packaging and testing factories have been greatly increased. While the international and Taiwan manufacturers have announced to increase the prices of MCU, the domestic MCU enterprises are still in the fierce market competition, and can not pass on the costs to the downstream manufacturers.
It has been learned from the industry that up to now, only a small number of domestic MCU manufacturers have issued price increase notices on the grounds of tight production capacity of wafer factories and packaging and testing factories and rising raw material prices. Most of them are in a wait-and-see state and are not sure whether there will be price increase. Some enterprises have explicitly stated that in order to protect customers, the company will not increase prices.
As a matter of fact, domestic semiconductor manufacturers usually import a foreign brand’s popular IC products first, and then slowly choose the direction of differentiation and specialization, as well as the MCU field.
It is understood that the development path of the above-mentioned semiconductor enterprises often leads to the serious problem of chip product homogenization, the domestic MCU product market competition is fierce, and the price of 8-bit MCU product has dropped to the freezing point.
In terms of 32-bit MCU products, many domestic manufacturers have shipped a large number of products after 2018, while the 32-bit MCU core of domestic manufacturers basically adopts armcortex-m series processors. Some manufacturers win in the market by relying on low prices, and compete with M0 core MCU products in low-cost fields by using M4 core MCU products for medium and high-end fields, The price war is very serious when we use 32-bit MCU products with M0 core to seize the market of 8-bit MCU.
Editor in charge: Tzh