The pain of “lack of core”: a crisis after another crisis

“It’s okay to spend money on bridges and roads and houses, but this chip won’t work.”

Since the United States announced the adjustment of its chip export policy in September 2020, this chip battle has gradually spread into a “global war”. Behind the “lack of core”, the global industrial production chain has shown fatigue. The United States has shaken the “cheese” of global chip companies, and this “cheese” is now fragile and helpless.

On January 14, 2021, TSMC announced its financial report for the fourth quarter of 2020. The quarter’s revenue increased by only 14% year-on-year, which was a sharp drop from the 21.6% increase in the third quarter; its net profit in the fourth quarter only increased year-on-year. This is 23%, which is less than the 35.9% increase in the previous quarter. Obviously, the adjustment of the US export policy has become one of the main reasons for the obvious decline in TSMC’s revenue and net profit growth.

Perhaps the prosperity of the Chinese market can bring some comfort to it. At present, semiconductor sales in the Chinese market account for 1/3 of the world, and the overall share is the largest, although it is equivalent to the sum of the United States, the European Union and Japan. It should be a good thing that the consumption of chips in key areas such as computers, mobile phones, and automobiles has continued to rise, but today’s “core shortage” situation makes these industries miserable.

One crisis after another crisis

Audi CEO Dussman used “a crisis after another crisis” to describe the current “core shortage” in the automotive industry.

He said, “Due to a severe shortage of computer chips, Audi will postpone the production of some high-end cars. The company’s luxury car brand has given more than 10,000 employees leave.”

Coincidentally, Ford has ordered a German factory to suspend production for one month. A Ford spokesperson said: “We are closely monitoring the situation and adjusting the car production plan to minimize the impact on our employees, suppliers, customers and dealers across Europe.”

The impact of “core shortage” is more far-reaching than expected, especially at the moment when the epidemic situation in the United States and Europe is unclear, the status quo of “core shortage” puts endless operating pressure on many auto companies. Car companies such as Volkswagen, Toyota, Nissan, and Honda are forced to reduce and restrict production in the face of chip shortages.

Even the chip industry never expected that the surge in demand for mobile phones and consumer electronics would further squeeze the production capacity of semiconductor manufacturers due to the rebound in the automotive market in the second half of the year.

As the automotive industry gradually approaches AI intelligence, computer capabilities have gradually become the biggest selling point of a new generation of cars. This has invisibly increased the car’s dependence on chips. On the road of automobiles, it has gradually become chip cars.” Industry analysis company VLSIresearch said: “In the entire semiconductor industry, there is currently almost no idle capacity, and demand continues to grow.”

TSMC also stated, “Due to the surge in demand, this year’s capital investment has increased by at least 47% compared to 2020, and stated that it will solve the shortage of automotive chips as a’top priority’.” Just a few days ago, TSMC announced that “China is expected. The demand will continue to grow, so the output of the Nanjing plant will be gradually increased.”

However, in the predicament of the “lack of cores” for the entire auto industry, it can also be seen as an opportunity for the domestic local chip market. The “lack of cores” may accelerate the trend of independent brand replacement.

At present, the import rate of domestic automobile chips is as high as 95%, and key chip technologies have always been monopolized. Whether it is the impact of the epidemic or the adjustment of U.S. export policies, domestic automobile chips are expected to replace overseas chips. In fact, domestic enterprises are also finding that gleam in their perseverance.

The trend of independent substitution is conducive to the accelerated development of domestic independent chip companies and independent research and development ADAS companies. It is more meaningful to improve our voice in the global chip market. Perhaps for the domestic environment, the current crisis is slowly “dissolving the fog”. “.

AI chips may dominate the future

The name of a company may not be familiar to everyone, but its position in the domestic chip market cannot be underestimated.

In October 2019, the second phase of the big fund was established with a registered capital of over 200 billion yuan. The full name of the “National Integrated Circuit Industry Investment Fund Phase II Co., Ltd.” is mainly for investment. Since 2020, the second phase of the big fund There are already 10 publicly invested projects, and the focus is on the upstream links of the integrated circuit industry. The second phase of the fund, which is almost regarded as the “investment vane of the domestic integrated circuit industry”, is working hard to explore the potential of domestic chip manufacturers, and its purpose is self-evident.

The pain of “lack of core”: a crisis after another crisis

In the industry, the second phase of the fund has a high reputation, and some analysts even bluntly said, “The localization of the semiconductor industry is an inevitable trend, and the independent control of the upstream of the semiconductor industry chain is essential in the future. Large funds have played a protective role. “And Strategy Analytics’ research report pointed out, “The establishment of the second phase of the Big Fund may promote my country’s almost self-sufficiency in the production of integrated circuits in the crucial 28nm process within two years.”

This is one of the few good news that can be exhilarating to hear at the beginning of this year.

In the recent investment of the second phase of the fund, it can be found that the field of AI chips has become the current “sweet and pastry”. Great breakthroughs have been made in both technological iteration and mass production. 2020 is a big year for the AI ​​chip industry.

In September 2020, after SoftBank announced that it would sell ARM to Nvidia for $40 billion, it seemed to be the “last straw” that has triggered the AI ​​chip’s need to change. ARM, as the world’s largest chip IP supplier, occupies more than 90% of the mainland Chinese market. This transaction has reshaped the market structure of the semiconductor industry after a single signature.

Domestically, Cambrian, the AI ​​chip unicorn, was officially listed on the Science and Technology Innovation Board on July 20, 2020, becoming the first domestic listed company to focus on the research and development of AI-specific chips. As of now, the market value of Cambrian is 60.87 billion yuan. ; Another Horizon has launched a new generation of AIoT edge AI chip Rising Sun 3 and a new generation of high-performance automotive-grade AI chip Journey 3, which can build an in-vehicle central computing platform and system that meets the higher security level ASIL D requirements of the automotive industry; and On the 5nm chips that chip companies are keen on, Apple, Qualcomm, Samsung, and Huawei have all achieved mass production. Although they are the first to carry Electronic products such as mobile phones, the two domestic companies are also very happy to enter the list.

According to data from the Semiconductor Industry Association (SIA), global semiconductor sales totaled US$113.6 billion in the third quarter of 2020, an increase of 11.0% from the previous quarter and an increase of 5.8% from the same period in 2019. According to the world’s semiconductor trade statistics, “the global semiconductor industry sales are expected to reach 433 billion U.S. dollars in 2020, and may reach 460 billion U.S. dollars by 2021.”

Undoubtedly, the semiconductor industry has become an important cornerstone for the realization of artificial intelligence technology, and AI chips are the most important presentation value on a cornerstone.

Industry analysts pointed out, “With the popularity of smart cars, the AI ​​chip market will usher in a new round of business opportunities, not only in the application of autonomous driving in the car terminal (autonomous cars use AI chipsets to interpret the data from the camera, and will It is combined with information from other sensors to create an image of its surrounding environment.)It is more in the multi-faceted use of in-vehicle systems. Voice recognition systems are accelerating the needs of the NLP market, and more advanced automotive entertainment systems, voice control Such applications must be obtained from the NLP field.”

But even if the AI ​​market is thriving, we still have to clearly realize that the current predicament is far more than joy, and the contradiction between supply and demand arising from supply chain sanctions will eventually show us the weakest link in this era, and the chip connects the future. , And at present we are still looking for the door to the “future”, this deadly “throat” cannot fall into the hands of others.

Last year’s Huawei incident was only the tip of the iceberg under the chip market competition, but the broken arm of Ren Zhengfei’s strongman allowed us to face the chip problem squarely at the node of this era.

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