Automotive chips, from shortage to surplus?

Since 2022, the semiconductor industry has shown a trend of polarized development: under the influence of the epidemic and high inflation factors, the supply of consumer chips has exceeded demand, and manufacturers’ inventories have been high; The industry has also entered the stage of structural core shortage of automotive chips from a comprehensive core shortage.

Affected by the shortage of chips, many car companies have encountered difficulties in production. Recently, another car company said that it will lower the target value of car production.

Lack of cores, another car company cuts production

Toyota said on November 22 that its planned global car production in December 2022 is about 750,000 vehicles, a decrease of about 6% compared with the actual production output (800,000 vehicles) in December last year.

Some production lines at Toyota's three assembly plants in Japan will be shut down in December due to a persistent shortage of automotive chips. Among them, the second production line of the Takaoka Plant (located in Toyota City, Aichi Prefecture) will be suspended for two days, and the first production line of the Tahara Plant (Tawara City) will be suspended for four days. As the main SUV "Hound" and "Land Cruiser" and other models will be affected.

At the same time, affected by the shortage of automotive chips, Toyota also lowered its global production target for this fiscal year (April 2022 to March 2023) from 9.7 million to 9.2 million.

Earlier, Nissan's U.S. unit also said that supply chain problems will force its assembly plant in Canton, Mississippi, to cut production in November. Nissan said it will reduce production days for the Titan and Frontier hatchbacks and the Altima sedan in November, with a decline expected in December as well. "The reduction in production days is due to continued shortages of semiconductor chips, leading to supply chain disruptions," a memo provided to distributors reads.

In addition to reducing production, since the outbreak of the automobile "core shortage tide", in order to cope with the "core shortage", many car companies have also taken measures such as reducing delivery, suspending delivery, and cross-border self-developed automotive chips.

Cut orders, and the shortage of automotive chips will reverse?

The car "core shortage" has lasted for nearly two years. When will it end? Recently, Morgan Stanley (Morgan Stanley Securities) stated that some automotive semiconductor manufacturers, such as MCU and CIS suppliers such as Renesas Semiconductor and ON Semiconductor, are currently cutting some chip test orders in the fourth quarter.

It is reported that in recent years, the compound annual growth rate (CAGR) of automotive semiconductor revenue is 20%, but the production of automobiles is only 10%. There should be an oversupply of automotive chips by the end of 2020 or early 2021, but due to the impact of the epidemic, the supply chain of automotive chips has been blocked or even cut off, which has led to a shortage of automotive chips.

As the epidemic eases, the supply chain is smooth, and consumer demand declines, wafer foundries such as TSMC have greatly increased the production capacity of automotive chips, and the shortage of automotive chips is improving.

In this context, some automotive semiconductor manufacturers "cut orders" seem to release a signal that there will be no longer a shortage of automotive chips, and even a surplus of automotive chips.

However, this phenomenon only occurs in some products of some manufacturers for the time being. In the overall automotive chip market, the industry generally believes that the shortage of automotive chips will continue for one to two years.

Recently, Xu Daquan, executive vice president of Bosch China, said to the public that there will be a continued shortage of automotive chips in 2023. "The feedback from many chip suppliers is that Bosch's current order needs will not be met next year, and there are still gaps, and even some gaps are relatively large. ."

Earlier, Deutsche Presse Presse reported that it currently takes six months from order to delivery for German automotive chips, twice the normal time. The shortage of automotive chips is expected to continue until 2024.