Automotive chips, from shortage to surplus?

Affected by the shortage of chips, many car companies have encountered obstacles in production. Recently, another car company said that it will lower the target value of car production.

Since 2022, the semiconductor industry has shown a polarized development trend: under the influence of the epidemic and high inflation, the supply of consumer chips is oversupplied, and manufacturers’ inventories are high; under the trend of electrification and intelligence, the demand for automobiles continues to rise, and the supply of automotive chips exceeds demand. The industry has also entered the stage of structural core shortage for automotive chips from a comprehensive core shortage.


Affected by the shortage of chips, many car companies have encountered obstacles in production. Recently, another car company said that it will lower the target value of car production.


Lack of cores, another car company cuts production


On November 22, Toyota stated that the global planned car production in December 2022 is about 750,000 vehicles, which is about 6% lower than the actual production output (800,000 vehicles) in December last year.


Due to the continued shortage of automotive chips, some production lines at Toyota's three assembly plants in Japan will be shut down in December. Among them, the No. 2 production line of the Takaoka Plant (located in Toyota City, Aichi Prefecture) will be suspended for 2 days, and the No. 1 production line of the Tahara Plant (Tawara City) will be suspended for 4 days. Models such as the main SUV "Hound Dog" and "Land Cruiser" will be affected.


At the same time, affected by the shortage of automotive chips, Toyota has also lowered its global production target for this fiscal year (April 2022 to March 2023) from 9.7 million to 9.2 million.


Earlier, Nissan Motor's U.S. unit also said supply chain issues would force production cuts at its assembly plant in Canton, Mississippi, in November. Nissan said it would reduce the number of production days in November for its Titan and Frontier hatchback trucks, as well as the Altima sedan, and expects fewer production days in December. "The reduction in production days is due to continued shortages of semiconductor chips, leading to disruptions in the supply chain," read a memo provided to distributors.


In addition to reducing production, since the outbreak of the "chip shortage" of automobiles, in response to the "chip shortage", many car companies have also made measures such as reducing delivery, suspending delivery, and cross-border self-developed automotive chips.


Cutting orders, the shortage of automotive chips welcomes reversal?


The "core shortage" of automobiles has lasted for nearly two years. When will it come to an end? Recently, Morgan Stanley (Morgan Stanley Securities) stated that some automotive semiconductor manufacturers, such as MCU and CIS suppliers such as Renesas Semiconductor and ON Semiconductor, are currently cutting some chip test orders in the fourth quarter.


It is reported that in recent years, the compound annual growth rate (CAGR) of automotive semiconductor revenue is 20%, but the output of automobiles is only 10%. There should be an oversupply of automotive chips by the end of 2020 or early 2021, but affected by the epidemic, the supply chain of automotive chips has been blocked or even cut off, which has triggered a shortage of automotive chips.


As the epidemic eases, the supply chain is smooth, and consumer demand declines, wafer foundries such as TSMC have greatly increased their production capacity for automotive chips, and the shortage of automotive chips is improving.


In this context, some automotive semiconductor manufacturers "cut orders" seem to release a signal that automotive chips will no longer be in short supply, and even automotive chips will begin to be in excess.


However, this phenomenon only occurs in some products of some manufacturers for the time being. In terms of the overall automotive chip market, the industry generally believes that the shortage of automotive chips will continue for one to two years.


Recently, Xu Daquan, executive vice president of Bosch China, said that there will be a continuous shortage of automotive chips in 2023. "Many chip suppliers have reported that they will not be able to meet Bosch's current order requirements next year, and there are still gaps, and even some gaps are relatively large. .”


Earlier, the Deutsche Presse Agency reported that it currently takes 6 months for German automotive chips to be delivered from order to delivery, which is twice the normal time. The shortage of automotive chips is expected to continue until 2024.

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