Automobile chips, how to break the "barrenity"

 Driven by the three trends of electric, intelligent and networked vehicles, the current content of semiconductors in the automobile has been greatly improved, and the value of the vehicle chip will continue to climb. According to data released by Hisi at the 2021 China Automotive Semiconductor Industry Conference, automotive electronics is expected to account for 50% of the total cost of vehicles in 2030.

 Not only has the value of the chips increased, but the number has also increased. According to the data of China Association of Automobile Manufacturers, the number of chips required for traditional fuel vehicles is 600-700, the number of chips required for electric vehicles will increase to 1,600 per vehicle, and the demand for more advanced smart cars is expected to increase to 3,000 per vehicle.

 However, the supply of automotive chips is far from keeping pace with demand. Car chip demand soared, car companies once "core can not" tearful production. The global auto industry cut production by 4.5 million vehicles in 2022 due to a chip shortage, according to auto industry data forecasting AutoForecast Solutions.

 So what chips does the car market need? How short is it?

 According to market research institutions DIGITIMES Research survey, the auto industry lack of core dilemma since the fourth quarter of 2022 gradually improved, in addition to the silicon based power device IGBT and MCU is still scarce, power management chip, CMOS image sensor, embedded multimedia card, display drive IC delivery gradually loose, as the oems backlog orders gradually to change, forecast in 2023 most car chip delivery will continue to shorten.

Specifically, the automobile MCU and IGBT are still the leading role of the automobile "lack of core", especially the IGBT, there is a price out of goods, the industry said that "now is not the problem of high price, but can not be bought at all". IGBT has surpassed the automobile MCU and become a constraint affecting the expansion of automobile production.

01. MCU is continuously in short supply

 Semiconductor manufacturers estimate that a car needs 20-30 MCU, while future luxury models could need as many as 100 MCU, up from the previous estimate of 70. This would result in a much larger market for automotive MCUs. Infineon, a global MCU company, also said in its fourth quarter of fiscal 2022 earnings call that the company's MCU business is expected to grow 2.5 times in the next few years due to limited supply increases in mature processes.

 For a long time, nearly 90% of the automotive MCU market has been concentrated in six factories including Infineon, NXP, Microchip, Renesas, ST and Texas Instruments, and the localization rate is far below 5%.

However, in the first quarter of this year, the major chip giants have said that the supply of car MCU continued to be tight. In TI products, the supply of MCU led by MSP is still tight, while the supply of DSP led by TMS320 is still tight. The delivery period of NXP Automobile MCU series FSx and MCFx is still tight for 52 weeks; MK series of Freescale is 45-50 weeks, easing compared with 2022; the supply of S9x series in 16-bit MCU is tight, and the spot price is very high. Infineon's high-end car MCU (starting with SAK) has been in demand because it cannot be replaced, such as SAK-TC277TP-64F200N and SAK-TC222S-16F133F AC are both higher than normal prices.

02, IGBT price is out of stock

 Recently, a number of market participants reflect that affected by the mismatch of demand and capacity, the existing production capacity of IGBT is basically sold out, not only the price has risen, but also the industry to describe the shortage of stock "not high price, but can not buy". According to media reports, the IGBT shortage of stock will be difficult to resolve until at least mid-2024. Previously also reported that some manufacturers IGBT production line generation prices rose 10%. With the high demand for automotive and industrial applications, and the slow expansion of production capacity, customer certification takes time, and the news that Tesla has released a 75% cut in silicon carbide, IGBT, a possible alternative, is more popular.

 At present, the IGBT market is still mainly dominated by foreign enterprises. The top five global IGBT players are Infineon, Mitsubishi, Fuji Electric, Anson Beauty and Semi Control, among which Infineon has a great advantage in all market segments. Even the domestic * star half guide, the global share is not high.

 According to the components distributor fuchang electronics in 2023, according to data from the current infineon, IXYS, asson, ST and other mainstream power device original IGBT products and related accessories are longer —— around 50 weeks, up to 54 weeks, more than a year, MOSFET delivery period is similar, goods in long period area, with the previous two years lack of core period.

 In addition to the amazing increase of MCU and IGBT, display driver IC, automotive chips, wafer foundry capacity and so on are hard to find. International MCU manufacturers are implementing the "Fab-light" (light wafer factory) strategy, and the period of delivery time for automotive chips has been extended.

 How to break automotive chips has become a serious problem.

 How to break the "shortage"?

IC Insights's point suggests that the real reason for the shortage is the surge in demand for automotive chips in 2021, rather than the inability of semiconductor suppliers to increase production. This means that the shortage of automotive chips can be solved, and the key to breaking the game is how to increase production.

 Chip manufacturers have expanded their production

 In the current shortage of automotive chips, TI, Texas Instruments, NXP, Anson, Renesas, Infineon, Rapidus and other automotive chip manufacturers have aggressively expanded production. In February, Infineon announced it would invest 5 billion euros to build a 12-inch wafer plant in Dresden, Germany, a single investment from Infineon's history, but it will not begin mass production until 2026. TI also announced that it would invest $11 billion to build a second 300-mm wafer manufacturing plant in Leahy, Utah. Not long ago, Renesas also announced an investment of 90 billion yen in a government plant to expand power semiconductor production capacity.

 However, it can be seen that overseas factories have limited new capacity and a long time for mass production. At the time, the entry of Chinese auto chip makers was somewhat relieved.

 In MCU, because the car gauge level MCU shortage prices, not only let the makers costs rise, more importantly, some enterprises because there is not enough chip cause car production, therefore, the end user expect to establish a more secure chip supply chain system, including saic has clear the MCU chip localization strategy, other makers also increasingly adopt local car gauge level MCU, the change of the end user, also enhanced the local MCU enterprises into the high-end market confidence. In China, a number of vehicle-level MCU enterprises have emerged, such as Zhaoyi Innovation, Guoxin Technology, BYD semi-guide, Siwei Tu New (Jiefa Technology), Xinhai Technology, Zhongying Electronics, Unigroup Micro, Fudan Micro Electric, etc., and in 2022 launched a number of new products suitable for different application scenarios.

 In terms of IGBT, in 2022, the sixth generation IGBT module added the fixed point of multiple models, and the seventh generation IGBT also began to supply in batches; the capacity of 12 inches IGBT also reached 15,000 pieces, and the capacity of vehicle grade IGBT continued to climb; in 2022, the capacity of IGBT power modules of new energy passenger vehicles in Times Electric was about 632,800 sets (accounting for 12.4%), ranking the fourth in China. In addition, China Resources Micro, Dongwei Half guide, Hongwei Technology, Jingeng Micro IGBT products have also achieved breakthroughs, Xineneng, Yangjie Technology, Wentai Technology and other manufacturers are also actively layout. Among them, Xineneng disclosed that in 2022, its subsidiary Jinlan Semiconductor * IGBT module packaging and test production line has been completed.

The collective rise of Chinese auto chip manufacturers has greatly alleviated the current situation of core shortage, but this still cannot fundamentally solve the problem of core shortage. Because most of the chip design companies have emerged in the automotive chip entrepreneurship boom, and the root cause of the lack of core also includes the lack of capacity in chip manufacturing. Moreover, IDM manufacturers are slow to expand production, and the expansion measures taken by manufacturers will not immediately increase the production capacity of automotive chips in the short term, and the automobile industry is more dependent on wafer foundries.

 The fabs are "eight inches dead"

 At this stage, wafer foundries are also facing big challenges.

 With the single-cutting surge in the second half of 2022,8-inch wafer capacity utilization has been severely affected, and capacity utilization is no longer fully loaded. Cut single ignore at the same time, however, most of the car chips is in 8-inch wafer manufacturing, and in the past for a long time are regarded as old, backward production line, many equipment companies have stopped producing 8 inch wafer equipment, 8 inch wafer equipment on the market is hard to find, second-hand equipment prices rising, when the expansion faces difficulties.

 If you ask why not switch to the 12-inch production line? Then that would be a good question.

 Because the larger the wafer size, the lower the cost per chip, and the higher the profit margin is. But in the short term, 12 inches is actually less cost-effective than 8 inches. The 12-inch requires more stability of the process, and the smaller the process, the higher the mask cost and design cost, so a considerable number of chips are still produced based on 8-inch wafers for cost and process considerations.

The wafer foundry work is the midstream semiconductor manufacturing link, and the overall demand is greatly affected by the prosperity of the semiconductor industry. With the steady expansion of the global consumer electronics and automotive electronics market, the production capacity of domestic and foreign wafer foundries continues to expand.

 Select a new supply model

 First of all, because the parts procurement management of the automobile industry has its unique structure and characteristics, before more favor the way of * supply, but now in order to avoid the impact of chip shortage, the form of * supply is appearing two supply, three supply alternatives.

 Secondly, from a technical point of view, many products are also considering replacing integrated special chips, that is, many chips with integrated functions are replaced by multiple universal chips to the combination of simple chips.

 Adapting to the new supply mode has also become one of the paths of the "breaking the shortage" of automobile chips.

04. Will the automobile chip shortage continue to spread?

 In addition to the MCU and IGBT mentioned, in the future automotive chips, the proportion of advanced semiconductors is increasing with the promotion of intelligence and networking, and TSMC's process is essential for these. TSMC's manufacturing is almost monopolized by Apple, making it difficult for manufacturers to get extra capacity.

 Looking into the future of the automotive industry, there will be several extreme "shortages" in on-board semiconductors: conventional power and analog semiconductors, and AI semiconductors of only TSMC.

In the future, whether the shortage of automotive chips will continue to spread is still unknown.