Chip industry insiders started: chip prices plummeted 10 times

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Heniu Commercial Note: Perhaps China has entered an internal period of chip overcapacity, and then chip companies will face a brutal battle of survival of the fittest in the market, just like the photovoltaic industry in that year.
1、 Chip prices plummeted 10 times: 1.15 trillion chips were shipped in the world a year
On August 12, Haiguang Information officially landed on the science and technology innovation board. The opening price rose 94.44%, with the latest market value of 150 billion yuan, making it the largest semiconductor IPO in China. Founded in 2014, Haiguang Information was born out of the Chinese Academy of Sciences. In 2021, the company’s performance increased significantly, with revenue of nearly 2.31 billion yuan. Its main products are high-end processors (CPUs).
Perhaps the limitless scenery of Haiguang Information at present is the last light of the chip industry in the next few years.
Recently, there has been a phenomenon of price reduction in the chip market. The price of some chips has dropped from 200 yuan to 20 yuan. The core component of an electronic control system was once set at 3500 yuan due to market shortage, but now the price is only 60 yuan. Moreover, the prices of light-emitting chips and consumer electronics control chips also continued to decline.
In 2021, 1.15 trillion chips were shipped worldwide. Experts said that according to incomplete statistics, from 2020 to 2024, a total of 25 8-inch and 60 12-inch wafers will be built, with a total investment of nearly 1 trillion yuan. At present, the number of core manufacturing enterprises in various countries is increasing, and the price is also beginning to decline.
In the past two years, the supply chain of the chip industry was disrupted due to the epidemic, leading to a rise in chip prices. More and more enterprises are involved in the core making process, which leads to the excessive number of chips and the price drop.
The data shows that up to now, there are more than 416000 chip-related enterprises in China; Among them, 68000 new registered enterprises were added from January to July 2022, with an average monthly growth rate of 41.6%; From the time of establishment, 26.8% of chip-related enterprises were established within one year.
2、 Is the foam about to burst? Industry insiders, inflated valuation, lack of height
An investor who focuses on hard technology said to Heniu Business: “In the past few years, chip companies have been highly valued. As long as a relevant scientific researcher comes out to start a business, the valuation will rise to 500 million, and the government will also give a lot of subsidies….”
VC institutions said in the interview with Heniu Business that it is no longer a good time to invest in the chip industry. A large number of chip companies in the start-up period have encountered financing difficulties. First of all, good enterprises and talents have already invested a lot of money, and even have succeeded in IPO, and have begun to gain a leading position in the market.
Secondly, today’s chip industry has overcapacity, and Chinese chip companies lack high-end competition, so they are crazy to get involved in the low-end chip industry. Most of China’s small and medium-sized chip companies can only meet the needs of LED lights, toys and other chip fields. Homogeneous competition is serious, while high-end chip fields such as mobile phones, computers, aircraft, and automobiles are still lack of competitiveness.
Industry insiders said that the mismatch between supply and demand made chip supply tight in the fields of automobile, industrial automation and AI big data. Although China’s chip industry has developed rapidly with the help of capital and policies, it is also “large but not strong”.
At the beginning of the epidemic, it was hard to get a single chip, and even there was no chip to produce cars, mobile phones and other products. However, there are too many chips now. Due to the global economic downturn, the decline in sales of automobiles, mobile phones and other products, as well as the overcapacity of chips, the chip giants have also urgently responded to the slump. Qualcomm is going through “order cutting”. At present, it has reduced the order of Snapdragon 8 series by about 15%, and will reduce the price of two flagship mobile chips by about 40% by the end of the year. Samsung Electronics said that the inventory of mobile phone memory chips is high, and the future sales may weaken further, and the company is trying to reduce the inventory.

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