Chip Shortage Aggravates Differentiation: MCU Prices Continue To Rise And Domestic Manufacturers Increase Investment

Since the chip shortage last year, MCU (micro controller) has become a high-frequency word, because both vehicle and industrial grade MCU are in a state of high shortage. In addition to MCU, power management chip and screen driver chip are also two types of chips in short supply. Many insiders told reporters that the current situation of core shortage will last at least until the end of the year.

At the same time, an executive of a chip design enterprise told the 21st century economic report that at present, MCU is the most lacking. With the capacity allocation and improvement of the wafer plant, the production of power management chip and drive chip has been alleviated. However, the structure of MCU is more complex, and there are fewer wafer factories that can produce, so the shortage is more serious.

However, as long as one component is missing, it can not be produced, no matter it is automobile, mobile phone and other daily consumer electronic products. For example, the lack of core has affected the production of mobile phones, which has also become a factor of cutting orders in the mobile phone industry chain recently. It is reported that Hyundai's plant in Yashan, South Korea, will stop production again; Japan's Suzuki Motor Company said it would temporarily suspend the operation of three auto factories, including Xiangliang, Huxi and Pantian, in early June. President Suzuki Junhong said it was not clear whether supply could be restored after July.

MCU manufacturers open the tide of price rise again. IC photo

MCU prices continue to rise

MCU manufacturers have opened the tide of price rise again. It is reported that ST will issue another price increase notice, and all product lines will start to increase prices from June 1. A number of chip design enterprise practitioners told reporters that the price of many wafer factories has basically increased by about 20%, and some enterprises have doubled their prices. Chip companies will also increase prices according to market conditions. However, in addition to the original factory, there is also the situation that the agent hoards goods and then sells them at a high price, and the market price rises by more than ten times.

In recent years, with the development of the Internet of things and the acceleration of automotive electronics, the demand for MCU is also rising rapidly. According to the data of IC insights, the number of global MCU shipments and market size has maintained a steady growth in the past five years. The global MCU product shipment increased from 22058 million in 2015 to 36065 million in 2020, and its market size increased from US $15945 million in 2015 to US $20692 million in 2020. The average unit price of MCU increased from US $0.72 in 2015 to US $0.78 in 2020.

From the growth of MCU, we can see that in recent years, the product demand of mature technology is increasing, while the mature capacity expansion is less. Under the influence of multiple factors such as automobile demand change, epidemic situation, trade friction and so on, a special shortage period has been formed.

However, the shortage of MCU is still increasing. In April, TSMC's Fab14 P7 plant area tripped due to careless excavation of pipelines by adjacent projects. According to trendforce, the first products to bear the brunt of this incident are the automotive MCU and CIS logic in the 45 / 40nm process. The main customers include NXP, Renesas and Sony. However, since the second half of 2020, the vehicle MCU has been in short supply due to insufficient inventory. Moreover, Naka 12 inch wafer plant has just experienced a fire accident on March 19, causing serious damage to the dust-free room of the plant, and production has not yet been resumed. Trendforce Jibang consulting believes that these fears will aggravate the shortage of MCU for vehicles.

At present, in May, the epidemic situation in Taiwan is still spreading, and there are confirmed cases in semiconductor factories. However, the semiconductor itself is highly automated and the impact is relatively controllable. However, Taiwan is also faced with water shortage and power shortage. Wafer manufacturers cannot stop operation in the production process. Once there is a power failure, the loss will be huge. Therefore, the outside world is also worried about whether TSMC will be affected, which will affect the production capacity originally in short supply.

Domestic enterprises increase investment

Tianfeng securities research report pointed out that due to the continuous shortage of upstream wafer factories and sealing and testing plants and the rising prices of raw materials, in the context of continued strong demand in the downstream terminal market, the overall supply of MCU is in short supply, leading to the extension of the delivery cycle and the price rise exceeding expectations. Under the background of stock shortage, domestic MCU manufacturers usher in important opportunities.

According to the data of prospective industry research institute, more than 74% of China's MCU market is occupied by overseas manufacturers such as Italian semiconductor, NXP, microchip technology, Renesas electronics and Infineon, while the market share of local MCU manufacturers is only about 10%.

In this wave of supply in short supply process, domestic enterprises further rise. On the one hand, the sales volume of manufacturers with advanced layout of MCU has soared. Recently, BYD semiconductor announced that the cumulative shipment of vehicle size and industrial grade MCU chips has exceeded 2 billion, of which the volume production and loading of vehicle size class MCU exceeded 10 million; On the other hand, more manufacturers have joined the MCU track, and increased the investment of vehicle specification level MCU.

For example, with years of innovative layout, Zhaoyi has formed a diversified product matrix in the 32-bit universal chip market. It is mainly based on armcortex-m series of 32-bit general MCU products, covering a wide range of different application fields such as vehicle specifications, work regulations and consumption, and the company continues to increase investment. In the first quarter of this year, the revenue of Zhaoyi innovation was about 1.604 billion yuan, with a year-on-year increase of 99.13%; The net profit was about 301 million yuan, with a year-on-year increase of 79.43%. According to the investor Research Report, the revenue of MCU increased more than 2 times year on year. Meanwhile, Zhaoyi innovation said that the latest MCU vehicle size products will be produced in June and July 2021, and mass production is planned to start at the end of the year.

The main control single chip of Zhongying electronic MCU system is mainly used in the fields of home appliance master control, lithium battery management, motor control, smart meter and Internet of things. In the first quarter, its business income was 306 million yuan, with a year-on-year increase of 51.95%; The net profit was 67.5825 million yuan, an increase of 60.73% over the same period of last year.

Xinhai Technology is mainly engaged in precision low-power ADC + high reliability MCU. Its products are widely used in vehicle central control, portable medical treatment, industrial measurement, high-end electronic cigarette and other application fields. In the next three years, it will complete the upgrading and industrialization of high-performance 32-bit Series MCU chips. In the first quarter, Xinhai Technology's revenue was 104 million yuan, a significant increase of 84.03% year-on-year, Next, the core sea technology will also enter the track of the vehicle specification level MCU.

Quanzhi technology has publicly said that the company has mass produced XR Series MCU + WiFi products, and has completed the large-scale mass production of many product solutions, with strong customer demand. In addition to chip design companies, IDM manufacturers also ushered in a bumper harvest in the first quarter. For example, the first quarter revenue of the company was about 1.475 billion yuan, up 113.47% year-on-year; The net profit was about 174 million yuan, with a year-on-year increase of 7726.86%. Next, as domestic MCU manufacturers continue to increase their share in the supply chain, it is also worth looking forward to how the global market structure of MCU will change.