As one of the best-selling chip products in 2021, the STMicroelectronics chip is the core component of electronic control systems. Its market offer once rose to about 3,500 yuan a piece, however, in 2022 its price slipped directly from the high level to about 600 yuan a piece, a price reduction of more than 80%. Another model of the chip, the price of which remained at about 200 yuan a piece in 2021, is now selling for only about 20 yuan each, only one-tenth of the highest price.
What's going on with the chips that once created a global boom, but are now hard to sell at reduced prices?
In the past two years, due to national enterprises to chip industry investment increased year by year, resulting in a global chip called structural oversupply phenomenon.
The oversupply of chips is mainly concentrated in the field of consumer electronics, especially in the panel with chips, communication chips, analog chips and many other major categories of chips, the price drop are not small. Among them, most of the price drop of more than 20% in the past two months, and some of the chip price reduction of more than 80%.
Taking cell phones as an example, mobile phone-related class chips had been the hottest chips in the past decade, with the global economic uncertainty enhanced, as well as by the repeated horizontal jump of the epidemic, many consumers from consumption to savings, the desire to consume has been greatly curbed, resulting in the global sales of cell phones continue to decline. Data show that global PC shipments in the second quarter of 2022 fell 12.6 percent year-on-year, the largest drop in nine years. global smartphone shipments in the second quarter of 2022 decreased by 9 percent year-on-year.
Decline in demand for cell phones, electronic chips for cell phones supply exceeds demand. With this, major cell phone manufacturers have lowered their shipment targets and cut orders to upstream chip makers.
Behind this price cut is due to the past "chip shortage", so many chip makers continue to expand production capacity. All sorts of capital crazy into the chip industry, brought the inventory growth year-on-year. Nearly 2,350 chip-related listed manufacturing companies around the world as the statistical object, the amount of inventory in the first quarter of 2022 than at the end of 2021 surged by about 97 billion U.S. dollars, inventory surplus and increase are at a 10-year high.
The inventory surge, exacerbating price declines due to overcapacity, will also intensify demand divergence in the chip market.
Despite the fact that some of the chips are trying to get rid of the inventory, through the "cut order action", automotive, AI big data and other areas of the chip
Remains in short supply.
Compared with consumer-grade, industrial-grade products, automotive-grade chips require high security and stability, a long research and development cycle, a high technical
threshold, capital investment; coupled with the growing popularity of new energy vehicle market in recent years, many companies are scrambling to capture the track focusing on transitioning to research and development of new energy vehicles urgently needed chips. Therefore, the development of automotive-grade chips face a lot of challenges.
With more and more manufacturers to join the ranks of the automotive chip, to get relief is only part of the automotive chip, the entire automotive chip market is still in the structural shortage on the shift. Data show that due to the chip shortage, is expected by the end of this year, the global automotive companies to reduce the cumulative production will climb to 3,829,400 units.
The mismatch between supply and demand in the market, so that chip manufacturers see the consequences of blindly expanding production is their own crazy looking to make up, it is evident that the rational deployment of production capacity is the right solution.