中国官网 reported that in March this year, Apple unexpectedly equipped with the A13 chip in its new Studio Display. At that time, the outside world generally interpreted it as a "big chess" that Apple has set up in the display field.
However, a few days ago, the news from an industry insider was shocking. The person said that Apple's approach is purely to reduce costs. Studio Display is not equipped with a normal A13 processor, but defective products (not Bin1) under the Bin standard in the later stage test score (not Bin1). For these materials that cannot be used for iPhone 11, Apple chose "waste utilization".
How the controversy in the public opinion field will ferment remains to be seen, but it also reflects the current industry's high sensitivity to inventory issues. The "overture" of the inventory cycle that has not yet ended
chip companies in cost control may be due to the increasingly obvious inventory pressure in recent months. As demand for downstream terminal products, especially products for individual consumers, has slowed significantly since the second quarter of this year, the chip procurement of system manufacturers has also been directly impacted.
Strategy Analytics Research Director Sravan Kundojjala recently revealed that in the second quarter of 2022, the inventory of major IC design companies around the world increased by 13% month-on-month, reaching a new high since 2019, but the cumulative revenue fell by 1%, which is the fourth consecutive quarter of that the inventory growth rate exceeded the revenue growth rate, which also means that the inventory-sales ratio indicator has deteriorated for four consecutive quarters.
Kundojjala pointed out that judging from the inventory turnover days of several major Fables manufacturers, AMD and Broadcom are currently under control at a relatively ideal level, while Qualcomm's inventory level continues to rise, while Nvidia and MediaTek showed signs of improvement after the continuous increase in inventory turnover in the second quarter. It is expected that the inventory destocking action of these two companies will be further seen in the second half of 2022.
In addition, Kundojjala also reminds that the overall inventory of IDM enterprises is also rising, and the inventory turnover days are simultaneously hitting a new high since the beginning of 2019 with Fables enterprises.
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For a normal business, the relative and absolute level changes in inventory are the norm, but the trend fluctuations in inventory shown by manufacturers as a whole obviously reveal deeper information. The average business cycle of the semiconductor industry has formed about 27 months since the 1990s, and inventory is used as an important observation indicator.
What is worrying is that the process of rising inventory levels cannot be confirmed to have ended yet. Referring to the analysis framework of the inventory cycle by American economist Joseph Kitchin, semiconductor manufacturers have actually been in the passive inventory replenishment stage in recent months, that is, procurement has not fallen simultaneously with the sales growth rate. As for the next stage, that is, the transition to active inventory destocking, there is no obvious sign, and the "overture" of the Kitchen cycle has not yet ended.
The so-called active inventory destocking will inevitably point to reducing procurement and lowering prices. This stage of competitive price reductions that "involve" between each other will often bring the most painful experience to manufacturers. At present, although chip manufacturers have not yet actively destocked, the continuous emergence of macro-environmental variables is undoubtedly tilting the psychological balance of the industry from waiting and watching to "self-rescue".
It is worth mentioning that JPMorgan Chase recently released a report on MediaTek that smartphone customers are pushing to reduce SoC prices, and its rival Qualcomm also obtained TSMC's advanced process production capacity. Therefore, it is expected that MediaTek's 5G SoC may be reduced by 10% in the fourth quarter of this year to accelerate the digestion of inventory. As a major Fabless company, whether MediaTek's move will start a wave of active inventory reduction is worth paying close attention to .
However, even if chip manufacturers want to actively reduce inventory, the current difficulty may be higher than in 2019.
is especially difficult to challenge 2019.
chip manufacturers take the initiative to destock. On the one hand, of course, it is due to the "sinking cost" constraints they face. Many Fables' current foundry capacity has only been obtained after a fierce competition during the "chip shortage". Once the order is selected, it will undoubtedly damage the hard-won cooperative relationship with the foundry. Once the two parties "come to a grudge", many special technology/advanced process products will also involve high NRE expenditure and time costs to other foundry factories, and it is even almost irreplaceable.
Therefore, in the early stages of the market turning, Fables manufacturers often have a wait-and-see mentality of "waiting again, and seeing again", and it is difficult to make up for the determination to reduce the number of films.
On the other hand, the effect of actively destocking is also highly dependent on downstream system manufacturers.
As mentioned above, due to factors such as the epidemic and inflation, the shipment of terminal products for individual consumers' needs has generally declined significantly this year, which is the most critical external change compared with 2019.
For example, the inventory turnover rate of Xiaomi Group, the major smartphone manufacturer, was still 5.7 times in 2019. The TTM inventory turnover rate calculated by recent data has fallen to 4.5. Obviously, the company itself is also facing quite obvious inventory correction pressure, and the procurement strategies of this type of enterprise are also directly affected by terminal consumption. For example, Acer Chairman Chen Junsheng recently revealed that although Acer has been consciously managing inventory since the beginning of the year, the actual inventory scale did not decline until March. At the same time, as terminal demand has become weaker, the inventory turnover rate has further deteriorated. Chen Junsheng predicts that Acer will not be able to achieve its set phased inventory sales target by the end of this year. External factors such as
determine the complexity of chip manufacturers' active inventory reduction. Even if manufacturers are willing to lower prices, as customers who digest chip inventory, downstream system manufacturers' "appetites" may be difficult to absorb. Reducing or even suspending the procurement of raw materials such as chips is a common practice for downstream manufacturers.
is the most important downstream semiconductor application field at present, and the smartphone industry is still in the stage of destocking. Major manufacturers have made many tricks. In addition to the recent rumors of reuse of Apple A13 spare chips, domestic manufacturers have recently frequently lowered high-end materials such as flagship processors and large-bottom CIS, which is a temporary measure to digest inventory.
However, it should be emphasized that there is a time lag between the "self-rescue" of downstream system manufacturers and the change in demand that chip manufacturers can feel. Under the excessive optimism caused by the "chip shortage" in the past two years, high inventory has been generally established from manufacturers to distribution channels, for fear that delivery will be affected by supply chain problems. When the product is unsalable, such inventory will naturally become a heavy burden. Only when the inventory and channel inventory of downstream manufacturers are relieved to a certain lower level can chip demand usher in substantial stabilization.
Conclusion
Looking ahead to the future period, according to IDC forecast, although global smartphone shipments are expected to decrease by 6.5% to 1.27 billion units in 2022, consumption is expected to stabilize and rebound in 2023. Although the expected growth rate is only 5.2%, its key significance lies in stabilizing the expectations of manufacturers in the smartphone industry chain and avoiding the further spread of pessimism.
As the inventory sales ratio improves, the inventory accumulated in distribution channels and manufacturers is gradually digested, and upstream chip manufacturers are also expected to usher in an upward turning point in the inventory cycle in 2023. However, it is not easy for many manufacturers to deal with the previous inventory destocking challenge.
(Proofreading/Wu Shouzhe)
