The global semiconductor industry has seen a "single-cutting wave"
The semiconductor industry, which has always been hot, did not expect that it would soon start to encounter cold. The semiconductor index fell 26.8% this year, with the stock prices of 37 semiconductor-related companies falling more than 30%, and semiconductor and chip-related ETFs falling more than 25%.
is not just a decline in stock prices. The "selectronic cut" is spreading in the industry. market institution DigiTImes Asia A report said that TSMC's main customers cut chip orders for the rest of 2022. At the same time, following the driver IC, power management IC and CIS image sensor, MCU has also experienced pressure to cut orders and price cuts recently. MCU manufacturers such as Infineon , STMicroelectronics , and Deyi were reported to have halved prices.
is actually not just MCU, the prices of various chip products are declining. It is reported that TI has sent a letter to downstream customers, stating that with the release of production capacity in the third quarter, the imbalance of downstream supply and demand will be alleviated. TI is the global leader in analog chips, which may mean that there is no shortage of analog chips in the market. It is also revealed that most of the products of TI have dropped by 30% to 40% compared with the high level, and some models of products have even been reduced by more than half.
Global semiconductor industry leader and CEO of Future Horizons said in May this year: The semiconductor industry has passed the peak of the roller coaster market cycle and has begun to turn sharply. Although 2022 will not be a disaster, 2023 will be a disaster.
In his opinion, the growth forecast for chips this year is 4%-10%, and a slowdown in growth is inevitable, and the extent depends on the timing. Penn said that semiconductor unit shipments plummeted first, and then the average selling price would collapse.
Didn’t it be said that the supply of semiconductor chips has risen sharply? Why is it suddenly not out of stock?
has undergone profound changes in both supply and demand, mainly in demand.
Simply put, this wave of chip prices has dropped sharply. First, because the demand for chips has slowed down in the consumer markets such as mobile phones and computers has slowed down, resulting in a decrease in demand for chips; second, manufacturers have previously expanded production and built factories, and many production capacity has begun to gradually release, and the overall chips have gradually shown an oversupply situation.
At present, the world's major semiconductor countries have added wafer production lines. The International Semiconductor Industry Association announced that between 2020 and 2024, 25 new 8-inch wafer production lines will be added. In April 2022, the cumulative amount of electronic equipment and related parts in the United States reached US$22.5 billion, the highest since data was found.
demand in the mobile phone industry is particularly slowing down. Mobile phone manufacturers are constantly rumoring to cut orders. Major Android phones such as Samsung and Xiaomi cut another 100 million orders at the end of March, and Samsung also lowered its mobile phone shipment target in 2022 to about 10% to 275 million units. laptop brand Asus and Acer are also facing high inventory and low demand. According to the financial report, the inventory of the two companies is as high as 154 days and 80 days respectively.
weak demand on the consumer side has affected the upstream industrial chain. Qualcomm , Intel and other chip giants have begun to cut orders. According to Tianfeng International analyst Kuo Ming-Chi , Qualcomm has cut orders of about 10-15% of the Snapdragon 8 series orders, and is expected to reduce the price of two flagship mobile chips by 30-40% by the end of the year to clear inventory.
According to market research agency Counterpoint, the global smartphone market shipments will decline by 3% year-on-year in 2022. Gartner's latest report recently showed that global PC and smartphone shipments will shrink this year. It is predicted that China's smartphone shipments will decrease by 18% compared with last year in 2022.
From the perspective of ordinary consumers, we have often heard the graphics card price reduction, the replacement cycle has been extended, and the old flagships of last year are also good. The sales of domestic mobile phones are really getting weaker. This is not because mobile phone manufacturers are not strong, but mainly because consumers will become more pragmatic and rational in the economic downturn.From an economic perspective, stimulating consumer demand is often more difficult than infrastructure and investment. If life is not really hard, layoffs and salary cuts suppress consumption capacity will be a bad idea.
Is it right to replace domestic semiconductors?
The "selectronic cut" in the semiconductor industry has not scared away some entrepreneurs in the industry. They believe that domestic substitution is right and there is a lot of room for growth.
SIA data shows that in 2020, domestic semiconductor material manufacturers have a global market share of 13%. In terms of segmentation, the market share of packaging materials with lower barriers is relatively high, while the market share of wafer manufacturing materials such as photoresist and wet electronic chemicals is extremely low. In the packaging materials of
, the localization rate of other materials is less than 5%, while in the semiconductor materials, except for the masking, polishing materials, and target materials, the localization rate of other materials is less than 10%.
Overall, we still have a low-end level. Some people are optimistic and some are pessimistic about such data. Pessimists believe that the gap between us and Japan and South Korea's advanced semiconductors is too large, and optimists believe that it is precisely because of the low level and low domestic production level that there is room for improvement that we should run and enter the market.
Both optimism and pessimism have their own reasons, but they are too one-sided. Some people may say that domestic substitution is the general direction of national support, and there are various industrial funds and parent funds that spare no effort to invest in funds. As for talent issues, domestic can be slowly cultivated and introduced externally. So it seems that the semiconductor industry is just around the corner, like the new energy industry. Logic such as
may be applicable in other industries, but the most important thing about semiconductors is two factors, one is sales and price. In terms of price, since we have started to catch up with packaging materials with relatively backward technical content, we must be able to make mature low-gross profit products first. The semiconductor industry is a high-tech and high capital density industry. Domestic semiconductor manufacturers currently have no say in terms of prices.
As for another key factor sales, according to the above-mentioned weak global consumer demand, it will naturally have a great negative impact on our domestic substitution progress. Public data from shows that in the first quarter of 2022, the global smartphone shipments were 298 million units, down 30 million units from the first quarter of last year, a decline of up to 9%. The Chinese market's mobile phone shipments in the first quarter fell by about 30% year-on-year. In addition, sales of PC, TV, TWS headset, automobile and other cars all declined to varying degrees in the first quarter. Professional websites predict that the downward trend may spread to the whole year of 2022.
China's semiconductor industry has felt the chill. A shares semiconductor industry suffered a large-scale decline in performance for the first time. In the first quarter of this year, more than 60% of companies' net profit growth rate decreased (comparable companies), such as Taiji Green Energy Technology, Shilan Micro , Hengxuan Technology, etc. On the semiconductor material side, only Lion Micro, Jacques Technology and other companies have increased year-on-year in the first quarter of 2022; on the semiconductor equipment side, only Xinyuan Micro, North Huachuang and Huafeng Measurement and Control have increased.
domestic semiconductor replacement is quite difficult, so experts criticize that the semiconductor industry is a highly globalized high-tech and high-capital industry. If you build it completely, the cost is so high that even the United States will not be able to bear it. Without global division of labor and cooperation, it is also very risky for geopolitics. There is some truth to the experts' words, but geopolitical conflicts have made it quite difficult for us to import some chips, so we can only passive domestic substitution. There is no such situation in both the new energy vehicles and the mobile phone industry. Secondly, domestic substitution can achieve good quality and low price and easy-to-use to a certain extent with the vast domestic demand market.The price of domestic chips is less than one-tenth of the imported chips, and they can be used in their sex life. What is the reason not to choose domestic chips?
Typical examples are BYD , which is well known as BYD Semiconductor. BYD Semiconductor is the largest automotive-grade MCU chip manufacturer in China. As of May last year, the number of automotive-grade MCUs installed in BYD Semiconductor has exceeded 10 million, which has far met the demand for BYD automotive-grade chips and can even supply the market. Furthermore, whether we purchase lithography machine or introduce talents, it is a normal business behavior. Competing in semiconductors is also a good thing for ordinary consumers.
written at the end
According to data released by the World Semiconductor Association (WSTS) recently, the growth rate of the global semiconductor market is slowing down. It is expected that the growth rate in 2022 will drop by 10 percentage points from the previous year, and will drop to single digits in 2023, only about 5%, the fourth lowest in the past decade.
It is not difficult to see that this easing of semiconductor supply and demand is caused by a large-scale recession of demand. The recession in the semiconductor industry may not be an isolated case. A global economic recession may be brewing. For semiconductor manufacturers, this is just entering the hot summer and the cold winter. The "selectronic cut wave" will be a long-term and continuous behavior, and they will only become more and more cautious about expanding production and building factories.
The development of the domestic photovoltaic industry has also experienced a relatively complete cycle. It also rushes in when the investment is hot, and there was a large-scale bankruptcy ebb in the cold winter of the industry. hopes that the semiconductor industry will maintain sufficient rationality in the face of cyclical changes to accumulate technology, avoid making money and doing whatever the tide will fade away.
Reference materials:
Beware of the "critical point" of semiconductors! Source: ETF Evolution Theory
MCU has gone from rising by dozens of times to halving the price! Why has the semiconductor market experienced such a big reversal? Source: Electronic enthusiast
valuation low in the past decade! Overcapacity of semiconductor production and order cutting is coming. Source: Databao
chip shortage or overcapacity? Three major warnings about semiconductor production capacity Source: Global Semiconductor Observation
