Shortage of semiconductors Snowball loss of finished cars…獨 Taiwan foundry production limit

It is predicted that due to the shortage of automotive semiconductors, automobiles around the world could lose 14 billion dollars (about 15 trillion won) in the first quarter alone, and 61 billion dollars (about 6.7 trillion won) in total sales this year.

Earlier this month, according to foreign media such as Bloomberg News, US investment advisory agency Alix Partners recently released such estimates. GM of the United States already announced on the 9th (local time) that the North American plant should be shut down (temporarily shut down) by at least the middle of next month. This includes Fairfax, Kansas, Ingersoll, Ontario and Potosi, as well as some factories in Mexico. Some GM plants in Missouri and Mexico plan to start vehicle assembly once, but wait until semiconductors are secured before finalizing it. “If semiconductor manufacturers increase the allocation for vehicles, recovery is likely to come from the second half of 2021,” said Hau Taitang, chief product platform chief and chief operating officer (COO) of Ford Motor Company of the United States.

Applying the average price of 20 million won for a single domestic car to the total loss in sales expected by Alix of 66.7 trillion won, the number of production disruptions will reach 3.38 million. It is estimated that the world’s annual sales of finished cars amount to about 80 million units, which is about 4.2% compared to this.

The global automaker industry has been complaining of a shortage of semiconductors since the end of last year. At the end of the year, German Volkswagen Group, the world’s No. 1 auto parts maker Robert Bosch, and No. 4 parts maker Continental announced at the end of the year that production of finished cars and parts is being delayed due to a shortage of semiconductors. Japan Honda and Nissan Motors, Fiat Chrysler Automotive (FCA), and Germany’s Daimler Group also announced production cuts due to semiconductor shortages.

The primary reason for the shortage of automotive semiconductors is the practice of the finished vehicle industry that has not stocked up. Japan’s Toyota Motor Company and other automakers have adhered to the principle of “just in time” to reduce unnecessary costs and control quality. For timely production, only one week of inventory is stored, and at most one month. In addition, automakers drastically cut semiconductor orders as purchase demand declined due to the impact of Corona 19 last year.

In the midst of this, domestic Hyundai Motors and Kia seem to have stepped aside from the semiconductor shortage. Hyundai Motor Company and Kia had fewer shutdown days compared to last year’s global automakers. Thanks to this, it is known that the production base was relatively smooth and the semiconductor order did not decrease. However, there are many concerns that production disruptions are inevitable if the semiconductor shortage prolongs.

The fact that automotive semiconductors are not a priority for semiconductor production companies is also a factor intensifying the shortage. As Corona 19 accelerates digital innovation, demand for semiconductors for information technology (IT) devices and servers and clouds is exploding. Semiconductor design companies also frequently double-booking (dual reservations) to occupy the production lines of foundry companies that produce semiconductors on consignment (foundry). Moreover, automotive semiconductors are less profitable than other semiconductor products and require high reliability and safety, making it difficult for semiconductor makers to enter new markets.

Automotive semiconductors are mainly made by automotive semiconductor companies such as Infineon and NXP and Taiwanese semiconductor foundry companies including TSMC. It can take months to years for other foundry companies to produce their products, including redesigning and safety verification. An official in the semiconductor industry said, “The time to ease the semiconductor supply and demand disruption is difficult in the second quarter, and at least in the third quarter of this year,” said a semiconductor industry official.

[이종혁 기자]
[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]