The global chip shortage is hitting China the hardest. According to mainland media reports, the shortage of wafers in China has so far shown no signs of easing, triggering panic orders from manufacturers. At the same time, the wafer manufacturing industry has been busy snapping up wafers from upstream for wafer manufacturing.
China has imported more than 300 billion U.S. dollars in wafers for three consecutive years, consuming at least one-third of the world’s wafers, making it the world’s largest wafer market, with more than 70 percent of the wafers relying on imports.
CCTV Finance 19 quoted an enterprise responsible person said, their enterprise production of cameras need the main control chip, storage chips, WiFi chips and other parts, these parts account for 60% of the total cost of the product, at present, in addition to ordering difficulties, many chip prices have also increased to varying degrees. Various types of chips are difficult to order, and this year’s expansion plans have been significantly scaled back.
The report points out that in the shortage wave, many end-users even panic orders by several times the previous purchase volume; and in the end-users grab wafers at the same time, wafer manufacturers are also busy from their upstream to grab wafers for the manufacture of wafers.
The report quoted an industry insider as pointing out that the combination of capacity grabbing by some enterprises and supply constraints caused by the epidemic has caused the shortage of wafers, but the core reason is focused on the upstream wafer manufacturing link.
Shenzhen, a wafer manufacturing industry leader said, during the epidemic, from consumer electronics, industrial markets and automotive demand surged, most of these need to use 8-inch wafers. The surge in demand has led to a continued tightening of 8-inch wafer capacity in the market.
According to the Semiconductor Industry International Association (SEMI) global wafer forecast report released last November, the number of 8-inch wafer production lines will increase to 202 by the end of 2021, a record high.
According to reports by the First Financial News, Cai Lian News and other mainland media, many Chinese industries are suffering from chip shortages as we enter this year, from automobiles and cell phones to general appliances such as water heaters, all facing chip shortages.
Many auto manufacturers around the world have recently been forced to stop production due to chip shortages. Chen Shihua, deputy secretary general of the China Association of Automobile Manufacturers, recently admitted that the shortage of wafers started in late December last year, which had a great impact on production in the first quarter of this year and might have an impact on the second quarter.
A number of well-known automotive IGBT chip designers in mainland China said that due to the tight supply of 8-inch wafers, the current supply of IGBT chips is also very tight, and some products are even in short supply, and as soon as they are available, they will be snapped up by relevant downstream enterprises, a phenomenon that almost never happened in the past.
According to reports, several Chinese cell phone manufacturers have increased chip procurement since the second half of last year, and these products will be released centrally in the first half of this year, with shipments in the first quarter much higher than the same period last year. A cell phone supply chain source said that the domino effect caused by the shortage of 8-inch foundry capacity and price increases is being transmitted to the whole industry.
huawei, which has been sanctioned by the U.S., is suspected to be running out of chips in stock, and its high-end 5G phones have so far been out of stock in the mainland Chinese market, with sales plummeting.
By the global automotive chip “cut off” news continues to ferment, China’s semiconductor and component concept stocks today in A shares rose across the board; by the U.S. sanctions of SMIC, today also in the Hong Kong stock market jumped 5.79% to close.
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