Editing by Greg Gao

The shortage of MCU control ICs is hurting China's automobile manufacturing industry most seriously, as the country has a self-sufficiency rate of only less than 5%. 

Ye Shengji, chief engineer and deputy secretary-general of the China Association of Automobile Manufacturers, described the situation at the recent China Automotive Forum in Jiading, Shanghai.  

He said that China's current semiconductor self-sufficiency rate is 15%, while the rate for automotive chips is less than 5%, reported Daily Economic News.

With the continued gap between supply and demand in automotive ICs and uncertain recovery prospects, some distributors hoard chips and ask for exorbitant prices. In addition, many companies also are stockpiling chips, building up inventory. Thus it has exacerbated the current chip shortage predicament, added Ye.

The China Association of Automobile Manufacturers says that the shortage of automotive chips will begin to reach its peak in the second quarter of this year and ease afterward according to optimistic estimates.  

Ye pointed out that currently, major chipmakers are prioritizing supplies for automakers. When the automotive industry is not short of chips and other sectors undergo a cyclical adjustment for six months, the entire semiconductor industry supply and demand is expected to return to normal by the end of 2022.   

Chip shortage has become a global issue. The demand for MCU in the automotive, Internet of Things, and other areas increased sharply in 2020; Major international IC suppliers such as ST and Renesas failed to meet the demand in time, resulting in MCU price increases, lead time extension, and chip shortage. In addition, with distributors hoarding chips and speculating, some MCU prices have gone up more than ten times, JW Insights previously reported. At the end of 2020, the automotive semiconductor shortage began to cause concern and worsen. Many global major car manufacturers were affected by the supply crunch to varying degrees. Some models experienced production delays and cuts, even production suspensions, dealing a big blow to the global automotive industry.