Chip prices soared 5 times, who is making “big money” behind it?

Integrated circuit English: integrated circuit, abbreviated as IC; or microcircuit (microcircuit), microchip (microchip), wafer/chip (chip) in electronics is a kind of circuit (mainly including semiconductor devices, including passive components) etc.) are miniaturized and are often fabricated on the surface of semiconductor wafers.

After the transistor was invented and mass-produced, various solid-state semiconductor components such as diodes and transistors were widely used, replacing the function and role of vacuum tubes in circuits. By the mid-to-late 20th century, advances in semiconductor manufacturing technology made integrated circuits possible. Compared to hand-assembled circuits using individual discrete Electronic components, integrated circuits can integrate a large number of microtransistors into a small chip, which is a huge improvement. Integrated circuits’ mass production capabilities, reliability, and modular approach to circuit design ensured the rapid adoption of standardized integrated circuits instead of designs using discrete transistors. Integrated circuits have two main advantages over discrete transistors: cost and performance. The low cost is due to the fact that the chip prints all components through photolithography as a unit, rather than making just one transistor at a time. The high performance is due to the fast switching of the components, which consumes less energy because the components are small and close to each other.

Missing chip! Chip shortage! This domino is being transmitted in the global industrial chain. Every time a card falls, it will cause a new chain reaction. A new study by Goldman Sachs shows that as many as 169 industries around the world are affected in part by chip shortages, ranging from automobiles, steel products, concrete production to air-conditioning manufacturing, and even soap production.

The epidemic intensifies the “lack of core”

There are many reasons for the global core shortage. And right now, the most difficult thing is the epidemic. Malls and most businesses in Malaysia closed in early June as the country began its second near-total lockdown in response to the worsening Covid-19 outbreak. Some analysts believe that this may exacerbate the already serious chip shortage problem around the world. Malaysia is the world’s seventh largest semiconductor export center, and more than 50 semiconductor companies worldwide have invested in Malaysia, covering almost all semiconductor giants.

Liu Xingliang, member of the Information and Communication Economics Expert Committee of the Ministry of Industry and Information Technology: Southeast Asia occupies a relatively large proportion in the field of chip packaging and testing, of which Malaysia accounts for 13%. Now the epidemic in Malaysia, as well as the extreme cold weather in the United States and the fire in Japan, will affect the world. The entire chip industry chain has a very large impact. After the new crown pneumonia epidemic in Malaysia, the global semiconductor packaging and testing center, became more serious, Taiwan, China, which is a global semiconductor manufacturing center, also experienced a rebound in the epidemic. The reason for the epidemic in the centralized production area of ​​chips has caused insufficient production capacity.

Chip prices soared 5 times, who is making “big money” behind it?

It was reported on June 5 that a large-scale cluster infection of the new crown pneumonia occurred at the KYEC Zhunan factory, a major semiconductor packaging and testing factory, which caused the factory to shut down for 2 days. Goldman Sachs’ latest research report pointed out that as many as 169 industries around the world are affected to some extent by the shortage of chips, from automobiles, steel products, concrete production to air-conditioning manufacturing, and even soap production, “can’t buy” and “can’t afford” become a common dilemma faced by these enterprises. According to the company’s data, there are 67,000 surviving enterprises with the keyword “chip” in my country. In the ten years since 2011, the number of registered chip companies has increased year by year. In 2011, a total of 1,180 chip companies were registered. By 2020, the number of registered chip companies has grown exponentially, with a total of 21,700, a year-on-year increase of 216%. As of the end of May 2021, a total of 15,700 chip companies have been registered, a year-on-year increase of 230%, and the chip industry is still showing a rapid growth trend. ,

According to data from market research firm TrendForce, the world’s top 10 chip manufacturing companies have a total revenue of $22.75 billion in the first quarter!

Among them, TSMC alone accounted for 57% of global chip manufacturing revenue to $12.9 billion. Broken down, 7-, 12- and 16-nanometer chips are the company’s main source of revenue. In addition, SMIC’s first-quarter revenue rose 15% to $1.1 billion.

TrendForce believes that in the first half of 2021, chipmakers did not have significant capacity expansion, but in the second quarter of 2021, chip demand was strong, which means that chipmakers will continue to maintain full capacity and revenue is still expected.

On the other hand, some governments have directly asked chipmakers to prioritize automotive chips when arranging production. This will further tighten the manufacturing capacity allocated to chips for other non-automotive applications. Overall, TrendForce expects total quarterly revenue for the top 10 chipmakers to grow 1-3% sequentially in the second quarter of 2021, again reaching an all-time high.

“The panic about running out of chips has every company over-ordering, like a toilet paper shortage, but on a massive scale,” Tesla founder Elon Musk said on Twitter on June 2.

However, based on the overall views of many people in the chip manufacturing industry, the large gap between supply and demand of chip production capacity in China will continue for two years or more.

“This round of chip shortages is the butterfly effect of the US sanctions on Huawei. Huawei has become the butterfly that flapped its wings and caused the hurricane.” An expert from Yitong Network told Caijing reporter his judgment. Yitong Network has been engaged in supply chain services for a long time, dealing with upstream and downstream, and is familiar with the subtle changes in each link of the semiconductor industry chain.

He analyzed that when Huawei was sanctioned by the United States, in order to ensure business continuity, the inventory cycle was extended from the traditional one month to a year, which led to a substantial increase in Huawei’s demand for the market. Huawei is huge and has demand for almost all kinds of chips.

In the critical period of the global automotive industry’s transformation from traditional fuel vehicles to smart electric vehicles, the importance of chips has become increasingly prominent. Statistics show that the total value of chips in an average car is around US$350, while the total value of chips in pure electric vehicles can reach US$770, and high-end electric vehicles are more than US$1,500.

The shortage of cores is not limited to the automotive industry and the electronics industry, because chips are essential for many industrial production equipment, so from steel products, concrete production, to beer brewing and soap production, the production of many industries is affected by chips. impact of shortages.

In an interview with CCTV Financial Channel, the deputy general manager of a smart technology company said that there is a chip made in Germany. Last year, the price was only 3.5 yuan per piece. Now it has risen to 16.5 yuan per piece, and the price has soared nearly five times.

Chip price increases increase the cost of raw materials, which will eventually be transmitted to the consumer level. In order to ensure supply, companies have begun to find ways to solve the shortage of chips. According to the British Financial Times, Tesla has considered buying a chip factory.

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