Chip delivery period lengthens again: structural shortage intensifies Buyers have to wait more than six months on average

The semiconductor industry is still difficult to get out of the quagmire of the lack of core. The latest research report from the research agency of Haina Financial Group (Susquehanna) shows that the global chip delivery time (referring to the lead time from order to delivery) increased by 3 days in February from a year earlier to 26.2 weeks, with buyers having to wait for more than six months on average, the longest record since the agency started tracking data in 2017.

Going back to Heine’s lead time data, chip lead times shortened in January this year, showing the first signs of improvement so far in 2019. Now chip lead times are lengthening again, but fortunately the growth rate is not as fast as last year.

The shortage of chips is characterized by a clear structure, with MCU in shortest supply, with a lead time of 35.7 weeks (more than 8 months) in February, and power management ICs in second shortest supply after MCU, with a lead time of 1.5 weeks in that month. These two chips are essential components in many electronic products as well as automotive components.

Production capacity continues to be tight MCU price hikes are undercurrents

STMicroelectronics, Infineon, NXP and Renesas and other companies in 2022 automotive MCU orders are nearly full orders, is why there are IDM majors continue to expand the outsourcing share of MCU, which is a side-effect of the MCU capacity shortage.

According to reports, automotive chip maker Renesas recently in addition to actively enhance its own MCU production capacity, while continuing to expand outsourcing foundry. February announced a stake in TSMC Kumamoto plant, more than 10% stake in the Japanese auto parts maker “Denso” (Denso), is one of Renesas major shareholders. Renesas president Hidetoshi Shibata also said that as Renesas expands its share of outsourcing high-end MCU, TSMC Kumamoto plant will become a major key to enhance its ability to supply high-end MCUs.

Market research firm Yole released a report earlier this month, predicting that MCU prices will continue to rise in 2022 and are unlikely to fall significantly until 2026. The report points out that in 2024 and beyond, excessive fab construction may depress prices, but is unlikely to directly affect the MCU market. New fabs will not target traditional MCU capacity construction using mature processes, but rather cutting-edge MPUs, GPUs and gas pedals.

Other sources previously said that some international IDMs have already raised their offers for automotive MCUs by an average of 20% at the beginning of the first quarter of 2022, or will continue to raise prices in the second quarter, due to a shortage of automotive chip supply and little improvement in lead times. Chip distributors, for their part, expect automotive MCU prices to rise another 15-20% in the second quarter of 2022.

Local suppliers are expected to welcome the golden window

According to Wang Fang, an analyst at Chinatrust Securities, mainland MCU suppliers are already in a golden window of development. The industry’s “large market + low self-sufficiency rate” provides local enterprises with a broad space for development. With the trade friction between China and the U.S. and the shortage of goods, MCU manufacturers with high “product completeness” can quickly gain ground by virtue of their first-mover advantage.

The analysts have compared the “product completeness” of MCU vendors in terms of the number of part numbers, the coverage of mid-, high- and low-end products, the perfection of ecological construction, and the coverage of downstream applications.

(1) In terms of the number of part numbers and the coverage of mid- to high-end and low-end products, Zhaoyi Innovation has a clear advantage and National Technology is catching up fast.

(2) In terms of ecological construction (for MCU customization development), there is not much difference among them, and Zhaoyi Innovation has more choices of third-party development tools and has a slight advantage. 3) In terms of downstream applications, most of them start from consumer, among which Zhaoyi Innovation has switched from consumer-oriented to industrial-consumer, while Zhaoyi Innovation, Xinhai Technology, UW Semiconductors and BYD Semiconductor have mass-produced products, and Zhongying Electronics and Nationz Technologies intend to launch automotive products. Technology to launch automotive products.

Head Leopard Institute analyst Mo Ziqing previously said that in recent years, many Chinese manufacturers have gradually started to develop the high-end MCU required for future automotive intelligence, and the manufacturers that are currently advancing faster in the industry include UW Beidou, Zhaoyi Innovation, BYD Semiconductor, Jiefa Technology, etc.

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