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Insufficient supply of automotive semiconductors, automobile production decreased in the first quarter of this year
Only 3% of TSMC’s total automotive semiconductor sales
Amid a global automotive semiconductor shortage, the German government came out. Germany asked the Taiwanese government to convince Taiwanese foundry (consignment) companies to ease the supply shortage of automotive semiconductors.
According to Reuters on the 24th (local time), German Economy Minister Peter Altmeier recently sent a letter to Taiwan’s Economy Minister Wang Mei-Hwa, saying: “I hope you will emphasize the importance of providing additional automotive semiconductors to TSMC for the German Automotive Industry “. He requested to increase chip production by ensuring additional production capacity.
The Taiwanese Ministry of Economy said: “At the request of several countries, we have requested the full support of Taiwan’s semiconductor suppliers.” “The supply and demand situation for automotive semiconductors is closely related to the plan to reduce the inventory of automotive semiconductor factories during the off-season.” TSMC also said in a statement: “We take the shortage of semiconductors for vehicles very seriously” and “We are working closely with automakers to solve this problem.”
Since the second half of last year, the global automotive industry has been struggling to supply and demand semiconductors for vehicles. In December last year, the Volkswagen Group predicted that total car production in the first quarter of this year will decline by about 100,000 units. Ford announced that it would close its Saarlouis plant in Germany from January 18 to February 19 and temporarily suspend its Louisville plant in the United States. Fiat Chrysler (FCA) also temporarily suspended operations at its plants in Canada and Mexico. Toyota also announced plans to cut production at its Texas plant in the United States.
In this situation, not only Germany, but also car manufacturers have requested government support. The US Automotive Policy Committee (AAPC), a lobbying firm for three US automakers, argued that the Commerce Department and the Biden administration should step in to resolve the semiconductor supply shortage . The European Union (EU) is also reported to have asked the Taiwanese government to insure the semiconductors. The Korea Automobile Industry Association also held an emergency conference on supply and demand of semiconductors for vehicles on the 22nd.
The lack of supply of semiconductors for vehicles is interpreted as a phenomenon caused by Corona 19. The semiconductor industry expected a decrease in car shipments due to the spread of the corona earlier this year and canceled production capacity early from the foundry. The foundry capacity was replaced by the production of 5G smartphones and gaming semiconductors. However, starting in the third quarter of this year, as demand in the automotive industry recovered faster than expected, the stock of semiconductors for automobiles became tight.
In the automotive semiconductor market, NXP, Infineon, Renesas, Texas Instruments (TI), ST Microelectronics, Bosch and ON Semiconductor are in the order of participation. These companies produce semiconductors for vehicles through their own factories and also through foundries. The foundry companies they use are TSMC, Global Foundry and UMC. The automotive semiconductor supply shortage caused chip prices to spike. Recently, NXP, ST Micro and Renesas announced to automakers that they would increase the price of automotive semiconductors by 10-20%. Infineon is also likely to raise prices sooner or later. The price of finished chips is estimated to have increased as foundry prices have skyrocketed due to lack of capacity. The auto industry predicts that the discrepancy in supply and demand for automotive semiconductors will continue into the fall.
In the industry, it is an opinion that the automotive semiconductor supply shortage is difficult to solve through foundry suppliers. When looking at the share of sales in the fourth quarter of 2020 revealed by TSMC, the share of automotive semiconductors was only 3%. Customers with a high share of sales from TSMC’s point of view are those who design smartphone semiconductors like Qualcomm, Apple, and Broadcom, and high-performance computing (HPC) semiconductors like AMD and Nvidia. Song Seon-jae, a researcher at Hana Financial Investment, said: “TSMC has stated that it is prioritizing the supply of semiconductors for vehicles, but current orders from non-US factory customers are strong and the utilization rate is high. “and” the shortage of automobile semiconductors will not be easily solved. ”
A spokesman for the German Ministry of Economy said: “We plan to reduce dependence on Asian semiconductor suppliers and avoid similar problems in the future. We plan to expand national support to increase semiconductor production capacity in Europe.”
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