The latest report of WSTS (World semiconductor Trade Statistics Organization) predicts that the revenue of the world semiconductor industry will reach 552.96 billion US dollars in 2021, a year-on-year increase of 25.6%, from the expected growth rate of 8.4% at the beginning of the year to 25.6%. However, in 2021, the semiconductor industry, which has been singing all the way, has also experienced the ups and downs of chip shortages, supplier price increases, and giant production expansions.

Many industry insiders said in an interview with a reporter from China Business News that in 2021, the global integrated circuit industry will continue to be in a dilemma of insufficient upstream production capacity and insufficient downstream supply. Although global semiconductor companies continue to expand their production and capacity, they are still not in the short term. Seeing the arrival of the inflection point of the balance of supply and demand.

Lack of core becomes the main theme

The “core shortage” started in the second half of 2020 and lasted until 2021. It has become the biggest dilemma facing the semiconductor industry at the moment.

Driven by the development of 5G, AI (artificial intelligence), autonomous driving, and the consumer electronics industry, the semiconductor market has grown rapidly, making the global foundry capacity always in short supply, and the shortage of chips has intensified. The latest research by market analysis agency Susquehanna Financial Group shows that the chip delivery cycle will be extended to 22.3 weeks again in November 2021. Among them, the delivery time of power management chips and microcontroller chips has increased significantly, and the supply pressure of many products will be passed to 2022. year.

The tight supply chain has caused price increases in the semiconductor industry to “fly all over the sky”. From upstream foundry manufacturing, packaging and testing manufacturers to Renesas, NXP, STMicroelectronics and other chip manufacturers are issuing price increase notices.

The lack of cores also limits the rapid development of the industry to a certain extent. For example, in the field of mobile phone chips, market research agency Canalys data shows that in the third quarter of 2021, due to the shortage of chips and other components, suppliers are unable to meet customer demand for equipment. Global smartphone shipments fell by 6%.

Mobile phone manufacturers such as Apple and Samsung have not been spared. Apple CEO Tim Cook bluntly said that due to the epidemic, the shortage of chip manufacturers’ supply will cause Apple to lose $6 billion in the fourth quarter of fiscal 2021. It is estimated that Apple’s annual losses will exceed 10 billion U.S. dollars.

In this round of lack of cores, the automotive industry has been particularly affected. According to a recent market analysis report by the consulting company AlixPartners, the problem of chip shortage is expected to reduce the global auto industry’s shipments of 7.7 million vehicles in 2021, with a loss of up to 210 billion U.S. dollars.

TrendForce analyst Qiao An analyzed that in 2021, the global foundry industry (manufacturers responsible for manufacturing chips) will not only face the problem of insufficient production capacity, but also uneven allocation of production capacity and resources. Recently, some terminal products (such as smartphones) will enter In the traditional off-season cycle, the decline in demand momentum has alleviated the urgent pressure on the supply chain of brand manufacturers, and at the same time, the redistribution of production capacity and resources has led to the original extremely short supply of application categories to obtain part of the production capacity; but depending on the supply situation of each process, there are still Some “long and short materials” (long and short materials respectively refer to more and tight parts in supply).

Giants scramble to expand production

Under the pressure of supply-demand imbalance due to shortage of capacity and strong demand, global foundry companies are unable to sit still and have chosen to expand production.

The latest ICINSIGHTS research report points out that it is estimated that global semiconductor capital expenditures in 2021 will reach a record 152 billion U.S. dollars, of which about one-third will come from the capital expenditures of foundry companies.

In this round of production expansion, the leading foundries bear the brunt. As early as March 2021, Intel announced that it would spend 20 billion US dollars to build two new chip factories in Arizona, USA. The new factories mainly focus on foundry business and manufacture ARM technology chips for other manufacturers.

TSMC announced that it will invest 100 billion U.S. dollars to increase production capacity in the next three years. It is worth noting that TSMC has invested 12 billion U.S. dollars to establish a wholly-owned subsidiary in Arizona, the United States. Construction has begun. The equipment is expected to enter the factory in the second half of 2022. The 5nm (nano) phase 1 project with a monthly output of 20,000 wafers will Mass production will begin in 2024.

In addition to the already confirmed 5nm new plant in the United States and the 28nm expansion plan of the Nanjing plant in China, TSMC is also actively planning a new 28nm plant in Japan and a new 12nm plant in Germany.

In addition, Samsung and SK Hynix, headquartered in South Korea, have also announced expansion plans.

Domestic foundries are not far behind. On September 2, 2021, SMIC announced its intention to establish a joint venture company in the Shanghai Lingang Pilot Free Trade Zone with the Management Committee of the Shanghai Free Trade Pilot Zone Lingang New Area. The joint venture company will plan to build a production capacity of 100,000 pieces/ This month’s foundry production line project focuses on providing integrated circuit foundry and technical services for 28nm and above technology nodes.

It is reported that the project plans to invest about 8.87 billion U.S. dollars. If SMIC has already launched expansion plans in Beijing and Shenzhen, the total investment in the three projects is equivalent to approximately RMB 121.7 billion.

In addition to SMIC, domestic manufacturers such as Silan Micro (600460.SH), China Resources Micro (688396.SH) and Wingtech (600745.SH) have also announced expansion plans.

According to SEMI (International Semiconductor Industry Association) statistics, from 2020 to 2024, there will be 60 new or expanded 12-inch (inch) fabs. Among these 60 12-inch wafer fabs, there are 6 in the Americas, 10 in Europe/Middle East, and 44 in Asia. During the same period, 25 8-inch wafer fabs will be put into mass production. Therefore, from 2020 to 2024, the total capacity of 12-inch wafers is expected to increase by 48%, and the total capacity of global 8-inch fabs is expected to increase by 18%.

However, the shortage of chips may not end in a short time as major foundries accelerate their capacity expansion.

According to Wang Zhiwei, a semiconductor analyst at Xintai Securities, it will take about two to three years for the new production capacity of the foundry to increase from project establishment, start-up, testing, trial production to capacity utilization. New foundries are subject to complex factors such as technology, talents, process flow, etc. Judging from the current progress, the release of new production capacity of major foundries will be the fastest until 2022, which will not alleviate the tight capacity in a short period of time. condition.

TrendForce Consulting also believes that after two consecutive years of “chip shortage”, major foundries announced that their expanded production capacity will be launched in 2022, and the new capacity will be concentrated in 40nm and 28nm processes. The extremely tight chip supply at this stage will be slightly eased. However, since the time point when new production capacity contributes to output falls in the second half of 2022, which is the traditional peak season, under the premise that the supply chain is actively stocking up for the year-end festival, the phenomenon of capacity relief may not be obvious. In addition, although some 40/28nm process components can be slightly relieved, the 8-inch 0.1X and 12-inch 1Xnm processes, which are currently in short supply, may still be the bottleneck of the semiconductor supply chain due to the limited increase in production. Therefore, on the whole, the foundry production capacity in 2022 will still be in a slightly tight market condition. Although some parts are expected to be relieved, the “long and short material” issues will continue to impact some end products.

Can the “core shortage” be alleviated in 2022?

“In 2022, according to my judgment, there will be a reversal.” Ziguang Zhanrui CEO Chu Qing said a few days ago that after nearly a year of supply shortage for chips, by the third quarter of 2022, it will enter sufficient supply from the supply shortage stage. Stage, and then to the stage of oversupply.

However, Qiao An said that the current lack of core is driven by multiple factors, including the epidemic, geopolitics, and digital transformation. The above three factors will still affect the demand side and uncertainty in 2022; from the expansion of production capacity From the point of view, depending on the extent of the increase in capacity of different process categories, some process shortages will have a chance to be relieved. However, 8-inch wafer-based products such as PMIC and MOSFETs have relatively limited growth in 8-inch Under the circumstances, I am afraid that the shortage will continue. The relief situation will vary depending on the increase in production capacity of each process. It is currently observed that 1Xnm or 8-inch production capacity with relatively limited growth in 2022 will remain in short supply, while the remaining processes will have the opportunity to obtain a certain degree of relief in the second half of the year. untie.

Zhao Yi, chief analyst of the electronics industry of the East Asia Qianhai Securities Research Institute, also believes that compared with the rapid growth of the global semiconductor market in 2021, the growth rate is expected to decline in 2022, but it will continue to maintain double-digit growth year-on-year. The industry’s high boom will continue, and the down cycle may be postponed.

Zhao Yi analyzed that on the demand side, the rise of automotive electronics, IoT (artificial intelligence Internet of Things), AI and other industries has driven the growth of chip demand. At the same time, the global shortage of cores has caused downstream customers to change their stocking strategies, and machine manufacturers tend to operate with high inventory strategies, and chip reserves have increased. On the other hand, on the supply side, new production capacity is expected to be gradually released in the second half of 2022. The production capacity of products including power chips and analog chips will remain in short supply in the first half of 2022, prices will continue to rise, and the industry’s prosperity will remain high. . It is expected that the industry’s tight supply and demand will not be relieved until at least the third quarter of 2022.

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