The shortage of automotive chips further intensified in the second quarter!

Entering the second quarter, the global shortage of automotive chips has not been alleviated. ON April 12, the U.S. government held talks to discuss chip shortages with chip and auto companies. The invited companies included General Motors and Samsung Electronics. The China Association of Automobile Manufacturers also said a few days ago that the tight supply of components such as chips will continue to affect the production pace of enterprises, and it is expected that the impact in the second quarter will be greater than that in the first quarter. Affected by this, car companies have been paying more and more attention to chips, and the upstream and downstream cooperation between car companies and chip companies has also been strengthened like never before. This may provide a rare opportunity for Chinese semiconductor companies to develop the automotive market.

Chip supply shortage continues

The impact of core shortages on the supply chain of global car companies is continuing to develop. Market researcher IHS Markit said that in the first quarter of this year, nearly 1.3 million vehicles were produced globally, which was affected by chip shortages. It is worth noting that the shortage of cores in the second quarter has not been alleviated, and even has a tendency to expand. In early April, Ford said it would cut production at seven North American assembly plants. Kia Motors said it would reduce production at its Georgia plant for two days. A Subaru assembly plant in Japan will cut production by about 10,000 vehicles. Suzuki announced that operations at the Sagara plant were suspended on April 5 due to delays in parts delivery due to a global Semiconductor shortage, and some production lines at the Kosai plant were also suspended on the 5th and 12th.

The supply of automotive chips has received unprecedented attention. On March 19, a fire broke out at the Naka factory, an important factory of Renesas that manufactures automotive semiconductors, and some equipment was severely damaged. In the field of automotive microcontrollers, Renesas owns about 20% of the global market, and the fire will undoubtedly make the supply of automotive chips worse. Renesas President Yingri Shibata said it may take three to four months for shipments to fully return to pre-fire levels at the affected factories. Nomura Securities estimates that the impact of the Renesas fire alone could reduce global auto production by 1.6 million units in the second quarter, or 7% of planned production.

As for when this shortage will be relieved. Some analysts predict that the global automotive chip shortage will continue for at least six months or even three quarters, and the supply may not stabilize until the fourth quarter. Matteo Fini, vice president of automotive supply chain, technology and aftermarket at IHS Markit, said: “The auto industry is recovering from the epidemic and is being challenged by a perfect storm. The month-long capacity constraints have gradually suffocated the auto industry and the auto industry is also facing natural challenges. The challenge of disaster.”

“Car-core” cooperation is comprehensively deepened

Even if chip makers such as TSMC and Samsung have indicated that they will expand investment to ease the pressure on chip supply, the construction of a fab will cost tens of billions of dollars, and it will take up to a year to test and debug complex equipment. Therefore, it has also become a consensus in the industry to seek a long-term mechanism to avoid the dilemma of continuous core shortage again in the future.

White House holds chip conference. Intel CEO Pat Gelsinger said in an interview that the company hopes to start producing its own chips within six to nine months to address the chip shortage. According to reports, the South Korean government plans to lead Samsung Electronics, SK Hynix, Hyundai Motor and other companies to form a chip alliance to ensure the development of related industries such as automobiles. Although South Korea is a major producer of computer and smartphone chips, it relies on imports for automotive chips. The establishment of an industry alliance shows that South Korea will bring its own chip industry strength to the field of automotive chips.

The Chinese business community also recognizes the importance of this issue. A few days ago, Xinhuazhang and the second-level subsidiary of China Automobile Center, China Automotive Research Institute Software Evaluation (Tianjin) Co., Ltd., China Automotive Research Institute (Tianjin) Automotive Engineering Research Institute Co., Ltd., Ziguang Guowei, NXP, Shanghai Xintai, bank card testing Ecological partners such as the Center, Xinda Jiian, Infineon, Fesling, Xinlai, Jifeng, etc., jointly signed a strategic cooperation agreement on automotive chips. Xinhuazhang will start with the functional safety design and implementation of automotive-grade chips, and provide automotive chip design companies with complete automotive-grade chip modeling, functional safety digital chip implementation, and a complete set of solutions for high-level functional safety. Fu Qiang, vice president of operations of Xinhuazhang, said: “Facing the future, automotive electronics have put forward extremely strict requirements on chip stability and security.”

Previously, SAIC and Horizon reached a comprehensive strategic cooperation, announcing that they would jointly build a next-generation intelligent driving domain controller and system solution that benchmarked against Tesla’s FSD. BYD and Horizon also announced that they will form a matrix of powerful alliances to jointly promote the in-depth exploration of scientific and technological research and development, accelerate the development and deployment of cutting-edge intelligent driving technologies, and accelerate the development and mass production of intelligent vehicles. BAIC and Imagination jointly signed an agreement to jointly establish Hexinda Technology Co., Ltd., focusing on the research and development of application processors for autonomous driving and voice interaction chips for smart cockpits.

The upstream and downstream cooperation between Chinese automobile enterprise groups and chip companies in the industrial chain is deepening in an all-round way. Li Shaohua, deputy secretary general of the China Association of Automobile Manufacturers, pointed out that at present, China’s auto industry has entered a period of platform adjustment, and reform, innovation, integration and opening will become the themes of the future development of the industry. In the new era, mastering core technologies is the key to the development of the industrial chain.

Domestic enterprises must have the determination to start from scratch

With the development of intelligence, networking, and electrification of automobiles, automobiles increasingly rely on the role of chips, and smart automobiles are becoming a hot spot in the semiconductor industry after mobile phones. Wu Junfei, general manager of Osram’s automotive division in China, pointed out that chips can help new energy vehicles to better realize network connection and intelligence. According to KPMG’s calculations, the size of the automotive semiconductor market will continue to grow from $40 billion by 2019, and may reach $200 billion in 2040. Market research firm IC Insights predicts that by 2021, automotive is expected to become the most powerful end market in the semiconductor industry.

The lack of cores will undoubtedly provide a rare opportunity for Chinese chip companies to enter the automotive market. Sheng Linghai, research vice president at Gartner, said: “Because of personal safety issues and the harsher working environment of automotive chips, automotive chips have higher requirements for reliability and safety.” According to relevant standards, compared with For consumer chips and general industrial chips, the working environment of automotive-grade chips is even harsher: the temperature range can be as wide as -40 to 155°C, high vibration, dust, electromagnetic interference, etc. Due to the issue of personal safety, automotive chips have higher requirements for reliability and safety, and the general design life is 15 years or 200,000 kilometers. Automotive-grade chips need to go through a rigorous certification process, including the reliability standard AEC-Q100, the quality management standard ISO/TS 16949, and the functional safety standard ISO26262. It generally takes 2 to 3 years for a chip to complete the vehicle certification and enter the OEM supply chain.

Some experts told reporters that the certification of a car-grade chip often takes several years, and parts need to be stocked for a long time, sometimes even a small amount of demand after more than ten years. This kind of industrial ecology and industry practice is not suitable for Chinese IC manufacturers who are accustomed to the high-volume and fast-paced consumer electronics market. Therefore, in the face of opportunities, Chinese chip companies should be prepared for long-term efforts. Entering the field of automotive semiconductors requires a long-term process and continuous efforts. From a strategic point of view, domestic semiconductor suppliers should strengthen cooperation with automakers and Tier 1 automotive industry suppliers, strictly enforce quality, reliability, cost, power and safety standards, and have the determination to start from scratch and start from the spare tire. At the same time, we can focus on new technologies and new requirements such as autonomous driving main control chips and solid-state lidars, and look for opportunities to cut in.