Chip price reduction, chip stagnation. Seemingly absurd sound from the first half of this year, it was called by countless people crazy, the first half of 2022, because the consumer electronics market demand sluggish, the chip industry once ushered in the price reduction tide, turn to the second half of the year, the plot again repeat.
Recently, VANCEER ELECTRONICS analysis, as the core components of electronic control systems, STMicroelectronics chip was one of the most in demand chip products in 2021, the market price once rose to about 540 U.S. dollars a, but in 2022, the same chip from the high level of decline to about 90 U.S. dollars, a drop of up to 80%.
It is no coincidence that the price of another chip last year is ten times different from this year. Chip prices are comparable to pork, up and down, the highest price and the previous normal price difference degree is extremely exaggerated, it is reported that there are media reports of $ 90 STMicroelectronics chip, the normal price in 2020 is only a few dollars.
Chip fever as if it has passed, last year shrouded the entire technology circle of cloud is about to dissipate? According to Bloomberg, the vast majority of chip companies now see a major turnaround in this hot market for a long time to come, and there is even a pessimistic part of the semiconductor industry will see the worst downturn in a decade.
A few happy, a few sad, chip prices avalanche, in addition to the industry silent mourning, I'm afraid there are countless markets in the wild.
Chip down, but not completely down?
The avalanche of chip prices is inextricably linked to the global downturn in electronics consumption.
As evidenced by TSMC's latest earnings report, the smartphone business, which once held up half of the market, is no longer the number one source of revenue, and the share of this business is expected to continue to decline. Smartphone and PC shipments have been declining from month to month since the start of this year, with CINNO Research data showing that the number of smartphone SoC terminals shipped in China in the first half of 2022 was about 134 million units, down about 16.9 percent year-on-year.
As for the PC side, according to market research firm Mercury Research, desktop computer processor shipments fell to their lowest level in nearly 30 years in the second quarter of this year, with total processor shipments experiencing their largest year-on-year decline since 1984, South Korean smartphone sales fell 29.2% year-on-year in July, computer and ancillary equipment exports fell 21.9%, and memory chip shipments led the decline with a 13.5% drop.
Prices naturally cooled as upstream demand decreased and downstream orders continued to be cut.
It should be noted, however, that these price reductions do not provide any overview of the entire semiconductor industry. Is the price of chips really down? A "plunge" under the news, there are still manufacturers announced price increases against the trend, such as Intel, Qualcomm, Myman Electronics, Broadcom and other plans to increase the price of some of its chip products.
To Intel, for example, according to Nikkei News, Intel has informed customers that the second half of 2022 will increase the price of semiconductor products, is expected to a variety of core server and computer CPU processors and a wide range of products such as peripheral chips, and the rate of increase varies depending on the type of chip, the minimum in single digits, the maximum increase may reach 10% to 20%.
Chip in the end up or not? It can be said that the price of consumer electronics chips has dropped abruptly because of falling demand, but demand for MCUs in other applications has continued to be strong, such as automotive and industrial control, which has led to the price of related chips remaining high. The future of the chip industry has been interestingly labelled as stagnant since the beginning of the anomaly in mobile phone shipments, but in reality, there are some industries where the chip drought has not ended to date.
In particular, automotive chips, 2022 China-Nansha International IC Industry Forum data show that the current chip products can only meet an average of 31% of the needs of car manufacturers, Xiaopeng car's He Xiaopeng also said that the automotive industry chip shortage has not yet ended, Guangzhou Auto in June gave data that the second quarter Guangzhou Auto faced a chip shortage of up to 33,000 pieces.
The new energy industry is sailing along, and going forward the demand for chips naturally cannot be underestimated. It is reported that, on average, a car needs to use 500 chips, new energy vehicles carry more chips, global car sales last year was about 81.05 million units or so, which means that the entire automotive industry chain will need 40.5 billion chips.
In addition, high-end chips remain high on the market altar, on the one hand, the upstream industry chain on the process of advanced chip demand in fact never faded. Previously, there is news that TSMC 3nm chips will be in mass production in September, Apple will be the first to use TSMC 3nm cast chip customers.
It is reported that Apple will use TSMC's 3nm next year, including the new A17 processor, as well as the M3 series processors. On the other hand, the shortage of high process semiconductor equipment, 3nm and 2nm advanced process production is destined to be low, and there may be a 10% to 20% supply gap in 2024~2025.
In this case, the price will be even less likely to drop. All signs tell us that this drop in chips is not a drop in chips, and that this industry is far from being as simple as it seems.
And how difficult will it be to continue to adhere to the consumer chip?
Previously it was reported that the Samsung side once suspended the purchase of all business units, including panels, mobile phones and memory chips, and even many Korean memory manufacturers will take the initiative to reduce prices by more than 5% in exchange for sales. Nuvoton Technology, which focuses on consumer electronics, also saw its profit soar more than 5.5 times last year, with a net gain of NT$7.27 per share. This year, the performance in April and May became flat, with revenue down 2.18% and 3.04% respectively.
One may not mean much, but Wind data shows that as of May 9, 126 semiconductor companies around the world have announced their first quarter 2022 earnings, 16 of which saw net profit decline year-on-year or even a loss. Consumer chips are falling out of favor at an accelerated pace, with automotive and industrial control turning out to be the next point of profit in the chip market.
Lowered, or not lowered? This chip price reduction is more like a false alarm, upstream manufacturers are temporarily happy, not to mention consumers.
