The global supply of chips is in short supply, especially in the field of automotive chips, and it has become normal for some car companies to suspend production.
Recently, according to media reports, due to the severe shortage of global automotive chips, Audi, a luxury car brand under the Volkswagen Group, was forced to postpone the production of some high-priced models, and more than 10,000 employees had to take unpaid leave.
According to the British Financial Times, Audi CEO Dusman was quoted as saying that Audi has put more than 10,000 employees on unpaid leave due to production slowdown, but Audi will do everything possible to keep the number of production cuts this season below 10,000. Dusman also stressed that total production for the year will not be affected, as lost hours are expected to be made up in the second half of the year.
According to Dussman, the recent crises facing the auto industry have been one after another. In 2020, due to the outbreak of the new crown pneumonia, the demand for automobiles dropped sharply for most of the year, so that car manufacturers had to cut orders for various automotive chips. Unexpectedly, the demand suddenly soared in the last three months of last year. And Audi’s quarterly financial results were brilliant, thanks to the optimism of buyers. At the same time, Audi found that car demand is experiencing unexpected growth, mainly due to the recovery of the Chinese market, but the challenges facing the supply chain are still in the form of precipitous.
According to Volkswagen Group, the parent company of Audi, last month, the shortage of chips will lead to a reduction in car production by 100,000 in the first quarter, and it is necessary to prepare for the possible impact.
The wave of chip shortages spread to the automotive industry: North and South Volkswagen bear the brunt
(Picture from OFweek Wiki.com)
Overseas major manufacturers such as Daimler, Nissan, Honda, Ford, and Toyota have encountered obstacles
Who would have thought that a small chip would become the “Achilles’ heel” of car companies around the world. Before Audi, many well-known car companies were also hindered in series production due to chip shortages.
According to the Deutsche Presse Agency, on January 8 local time, Ford Motor Company of the United States stated that it plans to suspend operations at the Kentucky plant for a week. The shortage of semiconductor parts may cause thousands of employees to lose their jobs and also affect the company’s operations. In addition, Ford’s car plant in Saarlouis, Germany will also suspend production from the 18th of this month to the 19th of February;
Fiat Chrysler, a well-known Italian car brand, also recently announced that it is facing a production slowdown due to shortages, temporarily closing its plant in Brampton, Ontario, and closing a small SUV plant in Mexico;
Toyota is also evaluating semiconductor supply constraints and developing countermeasures to minimize the impact on production. Toyota expects to cut production of Tundra trucks produced in Texas by 40% in January. According to Toyota spokesman Scott Vazin, the shortage of chips is no longer a problem for individual companies, but an industry problem;
Also troubled by the lack of cores is Nissan Motor Co., Ltd., which began to reduce the production capacity of the Kanagawa Seaside Plant. According to a Nissan spokesperson, the current Oppama plant in Yokohama will reduce the production of Nissan Note this month from 15,000 vehicles per month to 5,000 vehicles;
Honda Motor said that the continuous shortage of semiconductor chips mainly affects the production of Fit models at the Suzuka Plant in Mie Prefecture, and will first reduce production by 4,000 vehicles this month;
A spokesman for Suzuki Motor said that there are no idle factories at this stage, but there are plans to adjust production capacity.
The domestic auto market may face a greater crisis
The overseas auto market is in chaos, and the domestic market is also unstable. It is reported that since the beginning of December, many auto companies have begun to stop production one after another, and it is expected to last until the last month of 2020. In this turmoil, North and South Volkswagen (FAW-Volkswagen and SAIC Volkswagen, industry abbreviation: North and South Volkswagen) bear the brunt.
The reason for North-South Volkswagen’s suspension of production is that due to the impact of the overseas epidemic, after the shutdown of the chip factory, high-end automotive chips such as ESP and ECU chips were out of stock, which blocked the import of corresponding parts and led to the suspension of production. Most of the domestic automakers with mid-to-high-end models and above will be most affected. It is estimated that the affected production capacity will exceed one million vehicles in December.
In this regard, FAW-Volkswagen responded to the media and stated that it has not received relevant information at present, and the information belonging to global suppliers needs further verification. SAIC Dazezhong responded that from December 4th, some of the company’s models have indeed ceased production, and the recovery time is still uncertain. It depends on the speed of the supplier’s resumption of production, and is currently actively coordinating resources.
Under the pressure of the chip shortage, it was reported that European and American automotive semiconductor manufacturers may temporarily stop supplying Chinese automakers due to the shortage of overseas chips. “Lack of core” dilemma. Once the chip import channel is blocked, it will directly cause heavy damage to domestic automobile production.
Of course, the authenticity of this news needs to be verified. After all, the Chinese auto market is very large, and the demand for purchasing auto chips is even greater. Of course, European and American manufacturers are unwilling to hand it over to others, and they are more worried about the rise of domestic alternatives after the supply is cut off. In the future, it will be too late to regret it.
Although it is rumored news, behind it is the heavy dependence of domestic automakers on foreign chips. In automotive chips, there are MCUs, IGBTs, MOSFETs, sensors and other semiconductor components. In traditional fuel vehicles, the value of MCU accounts for as much as 23%. In pure electric vehicles, MCU accounts for 11%, second only to power semiconductor chips such as IGBT. Statistics show that in China’s annual automobile market of 28 million vehicles, the output value of China’s automobile semiconductors accounts for less than 5% of the world’s total, and the import volume of some key components accounts for 80%-90%. In 2019, the scale of the global automotive chip market is about 310 billion yuan, and the scale of the domestic automotive-grade chip industry is less than 15 billion yuan. In the same period, the scale of my country’s auto industry accounted for more than 30% of the global market.
With the development of automobile technology, automobiles at this stage have gradually developed into intelligent products controlled by electronic information systems. Consumers also pay more attention to energy saving, environmental protection, comfort, entertainment, safety, intelligence and other aspects of automobiles, and the market has also put forward higher requirements for automobile products. In today’s car body, if you want to be equipped with top technologies such as advanced sensors, artificial intelligence algorithms, and high-performance engines, you must choose a more high-end car chip to deal with it. The algorithms, processes, and logic used in the development of high-end automotive chips are undoubtedly in the forefront of foreign countries.
As for the reasons for the shortage of chips in some enterprises, the China Association of Automobile Manufacturers believes that the main reasons are as follows:
1. The epidemic has led to prudent investment in production capacity. In the first half of the year, the chip industry’s forecasts for the consumer electronics and automobile markets were conservative, and the Chinese auto market was not well prepared for the second half of this year.
2. Driven by 5G, the demand for chips in the global electronic consumer field has increased rapidly, and it has seized part of the production capacity of automotive chips, and this trend will be further intensified next year. At the same time, chip manufacturers are also raising prices and reducing the production quota of chips in the automotive industry;
3. Affected by the second wave of the epidemic in Europe and Southeast Asia, major chip suppliers reduced production capacity or shut down factories, which further led to an imbalance between chip supply and demand;
4. With the improvement of electrification, intelligence, and networking of automobiles, the value of a single vehicle of automotive chips continues to increase, and the global demand for automotive chips is faster than the growth rate of vehicle sales.
Car chips are in a hurry, and the root cause is the key
Overall, the entire auto industry is currently plagued by “shortage of cores” for auto companies, and auto parts suppliers are also caught off guard due to sudden market demand. Some chip factories even revealed that they should give priority to the supply of car factories, but the chip has a long cycle from order to delivery, and it will take a long time for car factories to get the goods.
Previously, due to the new crown epidemic, car sales were sluggish, and people were working from home, the market demand for chips required for smartphones and computers increased. Chip companies have shifted their production focus to consumer electronics such as mobile phones and computers. When the auto industry resumed production one after another, the demand for auto chips surged, and the original auto chip suppliers were unable to guarantee sufficient supply for a while, which led to the crisis of production cuts and shutdowns for many auto companies.
From the source point of view, NXP and STMicroelectronics, which are located in the upper reaches of the industry, entrusted TSMC-based foundries to produce insufficient supply of automotive chips, which has become more and more obvious since the end of 2020. It is reported that TSMC will continue to actively expand production, which may help alleviate the global shortage of automotive chips.
According to industry analysts, TSMC’s increased production may help alleviate the current domino effect of production reduction in the auto industry. Of course, to solve the “core shortage” problem in the entire automotive industry, it cannot be solved by increasing capital and expanding production of one or two companies. For example, in the U.S., the American Automobile Policy Council (AAPC), composed of General Motors, Ford, and Fiat Chrysler, is working hard to lobby the U.S. Department of Commerce and President-elect Joe Biden, asking the U.S. to put pressure on the Asian semiconductor industry and redistribute the proportion of consumer electronics orders. , making indispensable automotive chips.
How will the automotive electronics market change in 2021?
As the trend of intelligence and networking in the global automotive industry becomes more and more obvious, the demand for automotive-grade chips is constantly rising. In addition to the game between traditional car companies, new car-making forces are deeply involved, and a “battle” triggered by “core shortage” may become more intense in 2021.