Chip companies preparing for winter?
2022-04-03 08:26:45 admin
, , SMIC
said at the recent annual report meeting: "Facing the evolution of
epidemic situation, complex external environment and rapidly changing
industrial dynamics, the overall production capacity of the industry
exceeds demand, but the demand in some application fields slows down,
and the shortage of production capacity gradually turns into structural
shortage."
People are still wondering which application areas are slowing down. Liu Deyin, chairman of TSMC, said publicly that global demand for consumer electronics such as smartphones, personal computers and televisions began to slow due to the Russia-Ukraine conflict and the epidemic blockade policies of Asian countries.
As the world's largest contract chipmaker, TSMC is a barometer of global demand for electronics. TSMC, SMIC two Foundry revealed that demand slowed down, so now consumer electronics is exactly what bottleneck?
Some industry personage said, Because the smartphone and other consumer electronic terminal supply chain manufacturers crazy stock, Beware of this year again last year serious lack of core situation, Cause the current inventory pressure is very high. At the same time, according to market forecasts, the overall consumer electronics market demand is weak, and the demand for chips will probably drop by about 30% year-on-year. TrendForce cut smartphone production this year to 1.366 billion units, and Citigroup also lowered its expectations and target prices for consumer chip companies such as Qorvo and Skyworks.
You can see two keywords mentioned: weak demand and high inventories.
Nikkei News recently reported that due to the impact of the Russia-Ukraine war and inflation pressure, consumer electronics demand is weak, considering the current near-saturation capacity and inventory situation, Apple will cut iPhone 13, iPhone SE, AirPods and other three product line orders, which shows that geopolitics and inflation weaken consumer electronics demand. Apple's position as a leading consumer electronics brand could trigger knock-on effects across the industry, prompting other manufacturers to reduce production and run down inventories first amid uncertainty.
According to data from China Academy of Information Technology, in February 2022, 14.864 million mobile phones were shipped in the domestic market, down 31.7% year-on-year, including 11.374 million 5G mobile phones, down 24.5% year-on-year.
Domestic mobile phone market shipments and proportion of 5G mobile phones(Source: China Academy of Information Technology)
In addition to Apple, Tianfeng International analyst Guo Mingqi said on social media that the major Android mobile phone brands in China have cut about 170 million orders so far this year (accounting for 20% of the original shipment plan in 2022), of which more than 70% of the orders use MediaTek chips. Due to low consumer confidence, orders are likely to continue to fall in the coming months.
Affected by the overall market environment, mobile phone manufacturers began to reduce market expectations and began to reduce mobile phone supply chain orders., and reduce the specifications and configuration of mobile phone products.
In addition, in addition to smart phones, laptops, tablets and other previously caused by the epidemic market demand growth, but at present many overseas regions to the epidemic implementation of an open attitude, telecommuting and teaching and other home economic effects derived from the demand has declined, resulting in home office demand for tablets and computers followed by a decline.
TrendForce predicts that notebook shipments will decline by 3.3% annually in 2022.
2019-2022 Global Laptop and Chromebook Shipments and Growth Rates(Source: TrendForce)
Chromebooks will account for 15.2% of the market in 2021, but will be revised down to 12.3% in 2022. Shipments slowed significantly, indicating that the economic effects from teleworking and teaching are weakening.
Global PC monitor shipments fell 5.2% year-on-year in the fourth quarter of 2021, according to IDC, a market research firm, with 8.16 million PC monitors shipped in China, down 2% year-on-year. IDC expects global monitor shipments to decline 3.6% year-on-year in 2022.
Tablet shipments are also falling, with global tablet shipments down 25% year-on-year in the fourth quarter of 2021, according to a research report released by Strategy Analytics.
On the whole, after many years of development, consumer electronic terminals have entered the era of stock development.
In the case of sluggish market demand, the pressure on the chip side is very high.According to industry insiders, due to weak demand in the consumer electronics market, consumer electronics chips face a huge cut of 30%, while chip manufacturers previously face great inventory clearance pressure due to stocking to manufacturing capacity purchases.
Suppliers of non-consumer chips are expected to maintain strong shipments through most of 2022, butWeak demand for consumer electronics will hit industry suppliers first.
Recently, the market heard that Apple will cut orders for iPhone SE and AirPods, and the stock prices of supply chain companies such as Goer, Lixun Precision and Wentai Technology fell. Under the trend of weak overall market demand and order reduction, it will lead to a decline in the performance of consumer electronics chip manufacturers, and due to the serious price increase of chips last year, the price is also obviously falling now. From the perspective of demand end and price, there is a double pressure phenomenon.
Top 5 Supplier Ranking of Smartphone SoC Chip in China Market (Source: CINNO Research)
According to the 2022 smartphone SoC ranking released by CINNO Research, the chips of smartphone SoC manufacturers declined in February this year, both month-on-month and year-on-year.
Consumer electronics market pre-cooling, capital market smell is the most sensitive.
Despite U.S. sanctions against China in the chip sector throughout 2021, Chinese chip companies, mainly start-ups, have raised a record $10.8 billion in a booming chip market driven by a global chip shortage, according to the U.S. website Protocol.
According to data from Chuangdao Hard Science and Technology Research Institute, the overall investment volume in semiconductor industry rose again in 2021, up 41% from the same period last year (283), with more than 400 investments.
Domestic semiconductor financing volume in 2021(Source: Chuangdao Hard Science and Technology Research Institute)
According to the track where investment institutions are concentrated at present, the three hot tracks of data center, automobile and semiconductor manufacturing, as well as equipment materials, EDA/IP, etc. are the hottest areas at present.
In the field of AI chips, according to incomplete statistics, more than 10 AI large computing chip enterprises completed more than 15 rounds of financing in 2021, including Hanbo Semiconductor, Tiantian Zhixin, Jiutian Ruixin, Zhicun Technology, Kunlun Core, Suiyuan Technology, etc. At the beginning of 2022, there are many financing events in AI industry, such as hundreds of millions of yuan Series A financing completed by Shanghai Shencong Semiconductor, Ink Core Artificial Intelligence and other companies.
Although artificial intelligence has encountered some bottlenecks in its scale application at present, AI chips, as the hardcore technology at the bottom of the artificial intelligence industry, are still the dominant track for capital optimism.
In addition, from the heat of investment, cars are the hottest tuyere in recent years, capital is vigorously promoting domestic car chips to make progress and breakthrough.
This round of lack of "core" tide took the lead in the automotive field,"lack of core" set off a wave of accelerated expansion of the semiconductor industry, the semiconductor industry entered a new round of boom cycle, especially in the shortage of automotive MCU, power semiconductor and other areas, the project investment reached its peak in recent years. Among them, power semiconductors have flourished in the past two years. In addition to traditional silicon-based materials, the third generation semiconductor materials dominated by SiC and GaN are highly sought after by capital.
In addition, self-driving AI chip enterprises such as Black Sesame Intelligence, Xinchi Technology, Horizon and other domestic head manufacturers financing dynamics, Horizon alone completed $1.5 billion in Series C financing.
According to the overall investment and financing situation in 2021, AI chip, as the pillar industry of intelligent industry development, is favored by capital; In addition, driven by the trend of automobile intelligence, the number and amount of financing of automobile chip, intelligent driving chip and intelligent driving scheme are quite high; In addition, the third generation semiconductor materials and devices represented by Internet of Things, SiC and GaN are also fields with high capital bet.
Due to the large volume scale and low entry threshold, the consumer electronics market is still the application track with the largest proportion in the investment and financing field, but the market vitality and attention show a downward trend. The underlying reason may be that, after years of development,The traditional consumer electronics industry has gradually entered a mature stage, product innovation and market growth have gradually slowed down. Under the influence of negative factors such as chip shortage and industrial chain transfer, the competition in the industrial chain has further intensified.
Recently, a popular article in the industry,"One hundred million, how long can a chip company burn?" "When a hundred million is burned out, in fact, many companies have not even seen the shadow of the chip, and the demo may not have come out." But I'm sorry, the next round of financing must be received immediately, otherwise all the money invested before may be wasted.
How did the money burn? Chip design companies are light assets companies, and there is no particularly expensive machinery and site investment. The main expenses come from labor costs, chip chip production costs, and various IP, EDA, and related services. These expenses will let you know what it means to spend money like water."
When it comes to advanced manufacturing, the cost rises even higher. Author in previous article3nm chips cost nearly $600 million, where is it expensive?The cost of advanced process design is analyzed, and the cost of chip development under different processes is calculated. Among them, the cost of chip development on 28nm node needs 51.3 million US dollars, 16nm node needs 100 million US dollars, 7nm node needs 297 million US dollars, and to 5nm node, the cost of chip development will reach 542 million US dollars.
advanced process design cost(Source: Semiengingeering)
TSMC also warned recently that the cost of components and materials is also rising sharply, which has pushed up the cost of chip production to some extent, and this pressure will eventually be passed on to consumer chip design companies.
On the other hand, rising labor costs are also adding insult to injury for chip companies.
The serious shortage of talents in the semiconductor industry has become a common challenge faced by the global industry. With the arrival of the golden decade of the integrated circuit industry, talent compensation has also shown an obvious growth trend. According to the "2022 talent trend report" forecast, 2022 through the highest salary increase is the chip industry, some industry companies pointed out that the talent flow in this industry "is often a radish (job seeker) N pit (company), as long as job seekers are willing to move, each pit can be very high price recruitment, the average salary increase is about 50%, many people will be higher than this increase.
It is not difficult to analyze that under normal circumstances, the chip industry spends money like running water. It can be seen that in today's trend of rapid increase in labor costs and chip manufacturing costs, chip design enterprises are under pressure to rise sharply. In addition, the capital market is cold, consumer chip enterprises or will usher in a "cold winter."
On the whole, the demand performance of consumer electronics market in 2022 will not be very eye-catching, especially the main products in consumer electronics market such as smart phones, laptops and tablets, and the market demand will gradually slow down.
How to gain new momentum for growth has become a top priority for consumer electronics companies.
At present, the rapid development of automobile electrification and intelligence, the meta-universe has also created a new imagination space, which has given new directions to supply chain enterprises, or deeply cultivated VR/AR in order to seize new growth points in the consumer electronics industry, or cross-border "car building" to try to break through the siege.
On the whole, consumer electronics head enterprises are making efforts to find the second growth curve suitable for themselves. Who can take the lead out of the trough needs further attention.
For small and medium-sized supply chain enterprises that are not easy to transform, what can be considered may be how to survive this upcoming "winter".
People are still wondering which application areas are slowing down. Liu Deyin, chairman of TSMC, said publicly that global demand for consumer electronics such as smartphones, personal computers and televisions began to slow due to the Russia-Ukraine conflict and the epidemic blockade policies of Asian countries.
As the world's largest contract chipmaker, TSMC is a barometer of global demand for electronics. TSMC, SMIC two Foundry revealed that demand slowed down, so now consumer electronics is exactly what bottleneck?
Some industry personage said, Because the smartphone and other consumer electronic terminal supply chain manufacturers crazy stock, Beware of this year again last year serious lack of core situation, Cause the current inventory pressure is very high. At the same time, according to market forecasts, the overall consumer electronics market demand is weak, and the demand for chips will probably drop by about 30% year-on-year. TrendForce cut smartphone production this year to 1.366 billion units, and Citigroup also lowered its expectations and target prices for consumer chip companies such as Qorvo and Skyworks.
You can see two keywords mentioned: weak demand and high inventories.
Consumer electronics shipments decline
Nikkei News recently reported that due to the impact of the Russia-Ukraine war and inflation pressure, consumer electronics demand is weak, considering the current near-saturation capacity and inventory situation, Apple will cut iPhone 13, iPhone SE, AirPods and other three product line orders, which shows that geopolitics and inflation weaken consumer electronics demand. Apple's position as a leading consumer electronics brand could trigger knock-on effects across the industry, prompting other manufacturers to reduce production and run down inventories first amid uncertainty.
According to data from China Academy of Information Technology, in February 2022, 14.864 million mobile phones were shipped in the domestic market, down 31.7% year-on-year, including 11.374 million 5G mobile phones, down 24.5% year-on-year.
Domestic mobile phone market shipments and proportion of 5G mobile phones(Source: China Academy of Information Technology)
In addition to Apple, Tianfeng International analyst Guo Mingqi said on social media that the major Android mobile phone brands in China have cut about 170 million orders so far this year (accounting for 20% of the original shipment plan in 2022), of which more than 70% of the orders use MediaTek chips. Due to low consumer confidence, orders are likely to continue to fall in the coming months.
Affected by the overall market environment, mobile phone manufacturers began to reduce market expectations and began to reduce mobile phone supply chain orders., and reduce the specifications and configuration of mobile phone products.
In addition, in addition to smart phones, laptops, tablets and other previously caused by the epidemic market demand growth, but at present many overseas regions to the epidemic implementation of an open attitude, telecommuting and teaching and other home economic effects derived from the demand has declined, resulting in home office demand for tablets and computers followed by a decline.
TrendForce predicts that notebook shipments will decline by 3.3% annually in 2022.
2019-2022 Global Laptop and Chromebook Shipments and Growth Rates(Source: TrendForce)
Chromebooks will account for 15.2% of the market in 2021, but will be revised down to 12.3% in 2022. Shipments slowed significantly, indicating that the economic effects from teleworking and teaching are weakening.
Global PC monitor shipments fell 5.2% year-on-year in the fourth quarter of 2021, according to IDC, a market research firm, with 8.16 million PC monitors shipped in China, down 2% year-on-year. IDC expects global monitor shipments to decline 3.6% year-on-year in 2022.
Tablet shipments are also falling, with global tablet shipments down 25% year-on-year in the fourth quarter of 2021, according to a research report released by Strategy Analytics.
On the whole, after many years of development, consumer electronic terminals have entered the era of stock development.
In the case of sluggish market demand, the pressure on the chip side is very high.According to industry insiders, due to weak demand in the consumer electronics market, consumer electronics chips face a huge cut of 30%, while chip manufacturers previously face great inventory clearance pressure due to stocking to manufacturing capacity purchases.
Suppliers of non-consumer chips are expected to maintain strong shipments through most of 2022, butWeak demand for consumer electronics will hit industry suppliers first.
Recently, the market heard that Apple will cut orders for iPhone SE and AirPods, and the stock prices of supply chain companies such as Goer, Lixun Precision and Wentai Technology fell. Under the trend of weak overall market demand and order reduction, it will lead to a decline in the performance of consumer electronics chip manufacturers, and due to the serious price increase of chips last year, the price is also obviously falling now. From the perspective of demand end and price, there is a double pressure phenomenon.
Top 5 Supplier Ranking of Smartphone SoC Chip in China Market (Source: CINNO Research)
According to the 2022 smartphone SoC ranking released by CINNO Research, the chips of smartphone SoC manufacturers declined in February this year, both month-on-month and year-on-year.
Consumer electronics market investment and financing cold
Consumer electronics market pre-cooling, capital market smell is the most sensitive.
Despite U.S. sanctions against China in the chip sector throughout 2021, Chinese chip companies, mainly start-ups, have raised a record $10.8 billion in a booming chip market driven by a global chip shortage, according to the U.S. website Protocol.
According to data from Chuangdao Hard Science and Technology Research Institute, the overall investment volume in semiconductor industry rose again in 2021, up 41% from the same period last year (283), with more than 400 investments.
Domestic semiconductor financing volume in 2021(Source: Chuangdao Hard Science and Technology Research Institute)
According to the track where investment institutions are concentrated at present, the three hot tracks of data center, automobile and semiconductor manufacturing, as well as equipment materials, EDA/IP, etc. are the hottest areas at present.
In the field of AI chips, according to incomplete statistics, more than 10 AI large computing chip enterprises completed more than 15 rounds of financing in 2021, including Hanbo Semiconductor, Tiantian Zhixin, Jiutian Ruixin, Zhicun Technology, Kunlun Core, Suiyuan Technology, etc. At the beginning of 2022, there are many financing events in AI industry, such as hundreds of millions of yuan Series A financing completed by Shanghai Shencong Semiconductor, Ink Core Artificial Intelligence and other companies.
Although artificial intelligence has encountered some bottlenecks in its scale application at present, AI chips, as the hardcore technology at the bottom of the artificial intelligence industry, are still the dominant track for capital optimism.
In addition, from the heat of investment, cars are the hottest tuyere in recent years, capital is vigorously promoting domestic car chips to make progress and breakthrough.
This round of lack of "core" tide took the lead in the automotive field,"lack of core" set off a wave of accelerated expansion of the semiconductor industry, the semiconductor industry entered a new round of boom cycle, especially in the shortage of automotive MCU, power semiconductor and other areas, the project investment reached its peak in recent years. Among them, power semiconductors have flourished in the past two years. In addition to traditional silicon-based materials, the third generation semiconductor materials dominated by SiC and GaN are highly sought after by capital.
In addition, self-driving AI chip enterprises such as Black Sesame Intelligence, Xinchi Technology, Horizon and other domestic head manufacturers financing dynamics, Horizon alone completed $1.5 billion in Series C financing.
According to the overall investment and financing situation in 2021, AI chip, as the pillar industry of intelligent industry development, is favored by capital; In addition, driven by the trend of automobile intelligence, the number and amount of financing of automobile chip, intelligent driving chip and intelligent driving scheme are quite high; In addition, the third generation semiconductor materials and devices represented by Internet of Things, SiC and GaN are also fields with high capital bet.
Due to the large volume scale and low entry threshold, the consumer electronics market is still the application track with the largest proportion in the investment and financing field, but the market vitality and attention show a downward trend. The underlying reason may be that, after years of development,The traditional consumer electronics industry has gradually entered a mature stage, product innovation and market growth have gradually slowed down. Under the influence of negative factors such as chip shortage and industrial chain transfer, the competition in the industrial chain has further intensified.
Labor/chip production costs continue to rise
Recently, a popular article in the industry,"One hundred million, how long can a chip company burn?" "When a hundred million is burned out, in fact, many companies have not even seen the shadow of the chip, and the demo may not have come out." But I'm sorry, the next round of financing must be received immediately, otherwise all the money invested before may be wasted.
How did the money burn? Chip design companies are light assets companies, and there is no particularly expensive machinery and site investment. The main expenses come from labor costs, chip chip production costs, and various IP, EDA, and related services. These expenses will let you know what it means to spend money like water."
When it comes to advanced manufacturing, the cost rises even higher. Author in previous article3nm chips cost nearly $600 million, where is it expensive?The cost of advanced process design is analyzed, and the cost of chip development under different processes is calculated. Among them, the cost of chip development on 28nm node needs 51.3 million US dollars, 16nm node needs 100 million US dollars, 7nm node needs 297 million US dollars, and to 5nm node, the cost of chip development will reach 542 million US dollars.
advanced process design cost(Source: Semiengingeering)
TSMC also warned recently that the cost of components and materials is also rising sharply, which has pushed up the cost of chip production to some extent, and this pressure will eventually be passed on to consumer chip design companies.
On the other hand, rising labor costs are also adding insult to injury for chip companies.
The serious shortage of talents in the semiconductor industry has become a common challenge faced by the global industry. With the arrival of the golden decade of the integrated circuit industry, talent compensation has also shown an obvious growth trend. According to the "2022 talent trend report" forecast, 2022 through the highest salary increase is the chip industry, some industry companies pointed out that the talent flow in this industry "is often a radish (job seeker) N pit (company), as long as job seekers are willing to move, each pit can be very high price recruitment, the average salary increase is about 50%, many people will be higher than this increase.
It is not difficult to analyze that under normal circumstances, the chip industry spends money like running water. It can be seen that in today's trend of rapid increase in labor costs and chip manufacturing costs, chip design enterprises are under pressure to rise sharply. In addition, the capital market is cold, consumer chip enterprises or will usher in a "cold winter."
written in the end
On the whole, the demand performance of consumer electronics market in 2022 will not be very eye-catching, especially the main products in consumer electronics market such as smart phones, laptops and tablets, and the market demand will gradually slow down.
How to gain new momentum for growth has become a top priority for consumer electronics companies.
At present, the rapid development of automobile electrification and intelligence, the meta-universe has also created a new imagination space, which has given new directions to supply chain enterprises, or deeply cultivated VR/AR in order to seize new growth points in the consumer electronics industry, or cross-border "car building" to try to break through the siege.
On the whole, consumer electronics head enterprises are making efforts to find the second growth curve suitable for themselves. Who can take the lead out of the trough needs further attention.
For small and medium-sized supply chain enterprises that are not easy to transform, what can be considered may be how to survive this upcoming "winter".
