Mercedes, Daimler trucks, BMW and other auto manufacturers said that their factories have been operating normally.

The global chip shortage is alleviating the situation that plagues the automotive industry.

European car manufacturers such as BMW, Mercedes Benz and Daimler truck said they had obtained enough chip parts to produce at full capacity. BMW said that the company did not have any downtime due to chip supply, and all factories have been started and operated. “So far, we have no problems in basic operation and production worldwide.” Said Joerg burzer, head of production and supply chain management at Mercedes. Daimler truck also expressed a similar view.

Sheng Linghai, vice president of Gartner research, a market research institution, said in an interview with reporters that supply and demand fundamentals and hoarding were the main reasons for the shortage of supply in the automotive chip market. “From the second half of this year, the supply and demand of the automotive chip market may reach a balance. However, since automotive manufacturers do not directly purchase chips, if there are still manufacturers hoarding chips, it may also cause local supply shortages.”

The structural lack of core in the market has been alleviated

Sheng Linghai said that from the perspective of the whole chip market, due to the efforts of wafer factories and designers to produce more chips, since the second half of last year, the supply of the global chip market has been increasing, and the structural shortage of the market has been alleviated.

According to the semiconductor industry association (SIA), in 2021, the global chip sales exceeded US $500billion for the first time, reaching US $55.59 billion, an increase of 26.2% year-on-year. In terms of shipment volume, the global chip shipment in 2021 was 1.15 trillion pieces, also setting a historical record.

Sheng Linghai said that the situation in the automotive chip segment is quite similar, and the supply and demand gap in this market is gradually being filled. “From the supply side, automotive enterprises have special requirements for chips (such as special processes, industrial rules, etc.), and their production lines are special. This means that after the production capacity is affected by factors such as the epidemic, other chip manufacturers cannot fill the gap in the short term. When chip manufacturers restore production capacity and tilt to automotive customers to a certain extent, the problem has been improved.” He said.

According to icinsights, a market research organization, chip shipments provided by chip suppliers to the automotive industry increased by 30% year-on-year in 2021, much higher than the 22% increase in global chip shipments last year. Data from Susquehanna financial group, a financial institution, showed that the average global chip delivery cycle (the time from ordering to delivery) in May was 27.1 weeks, basically the same as that in April. The agency said that the last time the delivery cycle was flat or slightly shortened was in January this year, and about 60% of the chip companies’ delivery cycles were shortened.

Sheng Linghai further analyzed that from the demand side, since the beginning of last year, the global passenger car production has shown little sign of returning to the pre epidemic level, indicating that the popularity of demand for automotive chips is cooling.

According to the data jointly released by oica and s&p global, the global production of light vehicles was 80.1 million in 2021, a decrease of nearly 12% over 2019. In addition, according to trendforce data, in the first quarter of 2021, global auto sales fell by 7% year-on-year.

Sheng Linghai also said that in addition to the fundamental supply and demand factors, the previous shortage of automotive chips was also due to the fact that some cars and suppliers hoarded goods and robbed upstream resources. When the fundamentals were eased, market sentiment improved.

“The situation is not perfect”

As for whether the chip supply problem can be alleviated continuously, BMW and Volkswagen believe that the deadlock may begin to break in the second half of 2022. Morgan Stanley also said in a recent report that the shortage of chips may be alleviated earlier than expected due to strong shipments from chip foundries and slowing demand for consumer electronics products.

Sheng Linghai believes that the cyclical characteristics of the chip industry are obvious, often showing a cycle of “increased demand – increased capacity – overcapacity – falling prices – stopping capacity expansion – out of stock”. “At present, many chip industries have production expansion plans, and the demand of the automotive industry is stable. The automotive chip market may reach a certain balance in the second half of this year.” He said.

IC insights’ latest forecast shows that after the sharp increase in global chip shipments last year, global chip shipments are expected to increase by 9.2% year-on-year this year. According to the data jointly released by oica and s&p global, the global production of light vehicles may reach 80.6 million in 2022, or an increase of 0.6% year-on-year.

Karin radstrom, head of Mercedes brand, said: “although the chip supply is better than last year, it is not perfect. We are still closely monitoring the development.” BMW also said that the company is still monitoring the chip supply every day and does not rule out the possibility of new chip supply disruptions in the coming weeks and months.

Sheng Linghai said that the challenge facing the automotive chip industry in the future may be whether the chip demand of new energy vehicles can be guaranteed. “First of all, the global sales of new energy vehicles are faster than traditional fuel vehicles and the global automobile market. Second, new energy vehicles emphasize digitalization and have higher demand and requirements for chips than traditional fuel vehicles.”

Trendforce data shows that new energy vehicles have achieved strong positive growth against the backdrop of declining global car sales. In the first quarter, the global total sales of new energy vehicles (including pure electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles) reached 2.004 million, an increase of 80% year-on-year.

“At present, the number and grade of chips used in cars are greatly improving. For example, previously, cars may use relatively simple MCU (microcontroller unit), that is, microcontroller chips. Now, high-speed MCU is used, and even used in the intelligent cockpit, while Qualcomm has used relatively high-end application processor (AP) chips.” Sheng Linghai said.

Leave a Reply

Your email address will not be published. Required fields are marked *