Insufficient supply of automotive semiconductors, auto production declined in the first quarter of this year
Only 3% of TSMC’s total sales of automotive semiconductors
Amid a worldwide shortage of automotive semiconductors, the German government came out. Germany asked the Taiwanese government to persuade Taiwanese foundry (consignment) companies to alleviate the supply shortage of automotive semiconductors.
According to Reuters on the 24th (local time), German Minister of Economy, Peter Altmeier, recently sent a letter to Taiwan’s Minister of Economy, Wang Mei-Hwa, and said, “I hope you will emphasize the importance of providing additional automotive semiconductors to TSMC for the German automobile industry. He requested to increase chip production by securing additional production capacity.
The Taiwanese Ministry of Economy said, “At the request of various countries, we have requested full support from Taiwanese semiconductor suppliers.” “The situation of supply and demand for semiconductors for vehicles is closely related to the plan to reduce the inventory of automobile semiconductor fabs during the off-peak season,” he said. TSMC also said in a statement, “We are very serious about the shortage of semiconductors for vehicles,” 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 of last year, the Volkswagen Group predicted that the total car production in the first quarter of this year will decrease by about 100,000 units. Ford announced that it would close its Saarlouis plant in Germany from January 18th to February 19th and temporarily suspend its Louisville plant in the US. Fiat Chrysler (FCA) also temporarily suspended operations in its Canadian and Mexican plants. Toyota also announced plans to cut production at its Texas plant in the United States.
In this situation, not only Germany, but also automakers have requested support from the government. The US Automobile Policy Committee (AAPC), a lobbying company for three US automakers, argued that the Department of Commerce and Biden’s administration should intervene to resolve the semiconductor supply shortage. It is reported that the European Union (EU) has also requested the Taiwanese government to secure semiconductors. The Korea Automobile Industry Association also held an emergency conference on the 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 decline in automobile shipments due to the spread of the corona earlier this year, and canceled the foundry production capacity early. The foundry capacity was replaced by the production of 5G smartphones and game semiconductors. However, from the third quarter of this year, as demand in the automobile industry recovered faster than expected, the stock of semiconductors for automobiles became scarce.
In the automotive semiconductor market, NXP, Infineon, Renesas, Texas Instruments (TI), ST Microelectronics, Bosch, and ON Semiconductor are in the order of share. These companies produce semiconductors for vehicles through their own fabs as well as through foundries. The foundry companies they use are TSMC, Global Foundry, and UMC. The shortage of automotive semiconductor supply led to an increase in chip prices. 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. It is estimated that the price of finished chips has risen as foundry prices have soared due to lack of capacity. The automotive industry predicts that the discrepancy in supply and demand for automotive semiconductors will continue until autumn.
In the industry, it is an opinion that the supply shortage of automotive semiconductors is difficult to be resolved through foundry suppliers. Looking at the proportion of sales in the fourth quarter of 2020 disclosed by TSMC, the proportion of automotive semiconductors was only 3%. Customers with a high proportion of sales from TSMC’s point of view are those that design semiconductors for smartphones such as Qualcomm, Apple, and Broadcom, and high-performance computing (HPC) semiconductors such as AMD and Nvidia. Song Seon-jae, a researcher at Hana Financial Investment, said, “TSMC is giving priority to the supply of semiconductors for vehicles, but the current US fabless customer orders are solid and the utilization rate is high.” did.
A spokesman for the German Ministry of Economy said, “We plan to reduce the dependence of 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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