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Chip shortage for consumer electronics will ease, but those for automobile and new energy are expected to drag on, giving Chinese IC manufacturers a boost
Chinese article by 王丽英
English Editor 张未名
03-09 10:59

Editing by Greg Gao

Chinese IC industry insiders believe that the chip shortage will gradually be alleviated, leading the global semiconductor industry to change from “comprehensive shortage”to “structural shortage”. This is a major viewpoint at a popular JW Insights online forum on March 1. 

Ni Wenhai, chairman and CTO of CanaanTek(迦美信芯), a 5G RF microchip provider for consumer smart devices, pointed out that the shortage is mainly caused by Sino-US trade friction, resulting in significant chip orders and inventories increase from Chinese mobile phone manufacturers. But their phone sales in 2021 were not as high as expected. Now, most phone brands in China are conservative about the sales forecast in 2022. Ni predicts that the shortage of mobile phone chips and supporting RF chips, analog chips will be alleviated, but the shortage in the automobile will persist. 

Gao Feng, a partner of Stony Brook Capital(石溪资本), semiconductor VC, held a similar view: the problem in emerging areas such as automobiles and new energy will continue. He elaborated that some special-purpose MCUs, for industrial and automotive MCUs, high-end MOSFETs, IGBTs, and high-voltage BCD, are still in short supply.

On the one hand, driven by the booming new energy industry and China’s carbon dioxide peaking and carbon neutrality strategy, there are many emerging market needs; The production of such semiconductor products often require special design, manufacturing processes, and special certification, calling for a longer cycle with the capacity unable to keep up with the surging demands in the short term, Gao said.

Wang Lin, a partner of Walden International Investment Group(华登国际), held the view that the big players of automotive chips are mainly international IDM( integrated device manufacturer) and they are relatively conservative and reluctant about expanding production. This provides a good opportunity for Chinese manufacturers to foray into automotive chips.

Han Xiaomin, general manager of JW Insights’ Consulting Business Department, pointed out that in the past several years, the production capacity of semiconductor fabrication plants has increased by about 5-10%. From the perspective of capital expenditure, the largest proportion is memory chips, followed by advanced process chips from TSMC and Samsung. To give priority to meeting the needs of advanced process semiconductors, they are unlikely to expand the production capacity of 90nm and lower process, so the growth of mature process chip capacity will be mainly in the Chinese mainland. However, some of the current expansion projects are not progressing as expected. 

Semiconductor process capacity change is not easy. To alleviate the automotive chip shortage, TSMC intended to convert part of its mobile phone chip production capacity to automotive chips, but the production line transformation and capacity allocation will take time. 

The unanimous view is that the current chip shortage will persist, and mobile phone chips may be partially relieved in the second half of this year.

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