The aftermath of the continuing shortage of semiconductors… “The second quarter is more of a problem”

Input 2021.03.18 14:30

The global automotive industry is hitting a chain due to the supply disruption in automotive semiconductors. The supply and demand shortage of semiconductors is expected to expand beyond automobiles to the entire IT device. In the industry, automotive semiconductor margins are low and there are not many companies handling the core MCU (electrical system control chip), so it is predicted that the supply and demand will worsen in the future.

In a statement on the 17th (local time), Volvo said, “It will temporarily suspend or manipulate production in parts of China and the US factories,” and “We expect to face a very serious situation in the second quarter.” GM, which is known to have suffered a major shortage in semiconductor supply and demand, temporarily suspends production of all Chevrolet Camaro models from this week to the end of this month. According to the headquarters policy, GM Korea will continue to cut production at the Bupyeong 2 plant until April.

Honda also decided to cut production and shut down all factories in the U.S. and Canada on the same day due to the lack of automotive semiconductors and the damage from the cold wave that struck North America last winter. Toyota decided to cut production at its factories in four regions, including North America, and its popular models, such as Lexus and Camry, will be affected by production cuts.

The problem is that this phenomenon can continue throughout the year as well as in the first half. Dong-jin Ko, President of Samsung Electronics’ IT·Mobile (IM) Division, said the day before. Samsung Electronics (005930)At the general shareholders’ meeting, he said, “There is a serious imbalance between the supply and demand of semiconductors around the world.” “The second quarter is a bit of a problem,” he said, and “it may not be able to completely solve the shortage of semiconductors.”

Automotive semiconductors have very low profitability. Semiconductor chips used in vehicles are around $2 each, and the total unit cost of semiconductors in one vehicle is only 2-3% of the price of the vehicle. For semiconductor companies, it is much more profitable to produce highly profitable mobile semiconductors. In addition, the surge in demand for electric vehicles, which contain more than twice the semiconductors of internal combustion locomotives, is also a factor.

In addition, there are not many manufacturers handling MCUs, which are the most common semiconductors in automobiles, so it is difficult to increase supply in a short period of time. The MCU is produced by TSMC, a Taiwanese semiconductor company, with 70% of the global supply. As the global automobile demand plunged due to Corona 19, TSMC reduced production, but as the global economy recovered faster than expected due to vaccine development, supply was in short supply.

Recognizing the seriousness of the supply and demand of automotive semiconductors, the government has recently decided to directly develop semiconductor technology to promote the self-sufficiency of automotive semiconductors. Hong Nam-ki, Deputy Prime Minister of Economy and Minister of Strategy and Finance, announced on the 10th that it will invest more than 20 billion won until next year to support semiconductor technology development (R&D). It is planning to lower the initial barrier to entry into the automotive semiconductor manufacturing market, which is difficult for semiconductor companies to take the lead.

An industry insider said, “It will take five years even if the existing semiconductor companies that have received government investment start preparing immediately because the manufacturing of the MCU that is insufficient right now will take five years.” It is only a matter of time before domestic automakers are hit.”