In a blink of an eye, June has passed, and 2021 is halfway through. In the first half of the year, due to the shortage of supply in the IC market, coupled with unexpected factors such as climate and epidemic, the shortage of goods and the price increase intensified. Whether these unfavorable factors can be eliminated in the second half of the year will determine whether the market reverses or not. The supply chain event in June will guide the market in the second half of the year, so it is necessary to sort it out. ST: The latest round of price increases will take effect on June 1, and prices of all products will be increased.

Yageo: The latest round of price increases will take effect on June 1, with an average price increase of 10% for new resistors and tantalum capacitors.

Silan Micro: The latest round of price increases will take effect on June 1, targeting ED lighting drive products.

Toshiba: The price of its semiconductor products will increase from June 1.

Nexperia: The new price will be implemented from June 7, involving power semiconductor products.

BYD Semiconductor: Announced that from July 1, the price of IPM and IGBT will be increased by no less than 5%.

Infineon: According to market rumors, the price of MOSFETs will be raised in the near future, with an increase of about 12%.

In addition to the above, there are also rumors in the market that Taiwanese factories such as Novatek, Holtek, and Nuvoton will increase their prices in the third quarter, involving TDDI, LDDI, MCU and other products.

Overall, there are still many big manufacturers that started to raise prices in June, which shows that the shortage of chips has not stopped and the price increase will definitely continue in the second half of the year. But at the same time, the IC market has also changed. Some production lines that were suspended in the first half of the year have resumed, and the industry chain is planning to expand production. Due to the cyclical characteristics of the IC industry, the expansion of production by each factory will eventually cover the gap between supply and demand and bring it back into balance. It’s just that the reversal of the industry cycle is based on years and will not be completed in a short period of time. Therefore, people in the industry should still plan for the long term and prepare for it.

When the expansion is in progress, the market turnaround can be expected

As early as March, the N3 building of Renesas Japan's Naka factory suffered a fire, causing the production line to stop. The factory mainly produces MCUs for vehicles, and its shutdown will have a certain impact on the automotive industry. In June, Renesas announced that the plant could fully recover by the end of the month, which is undoubtedly a boost to the automotive IC market.

During the gradual recovery period of the Renesas factory, the wafer foundry TSMC promised to increase the production capacity of automotive chips. The original Renesas plan to withdraw and produce its own orders will remain at TSMC. In addition to Renesas, IDM manufacturers such as NXP and ST have also strengthened their cooperation with TSMC. The forecast shows that this year TSMC's MCU production capacity will increase by 60% compared with last year. It is expected that a large number of new production capacity will be opened in the second half of the year, and the shortage of automotive chips is expected to initially ease.

At this stage, limited wafer equipment is limited by market circulation, especially 8-inch equipment has not grown, and IDM manufacturers are relatively weak in expanding their own production, so they must strive for foundry capacity to meet downstream demand. Under such fundamentals, wafer foundry and downstream packaging and testing will inevitably increase prices due to the shortage of production capacity.

According to media reports, foundries such as Taiwan UMC, NSMC and even SMIC will increase their prices in the third quarter by as much as 30%. At present, if the major IC manufacturers want to ship more, they must accept the price increase of the foundry. In contrast, the cost of expanding their own production capacity is more controllable. In June, some new production lines of original IC factories have been put into use, and more new production capacity is on the way. If it is completed in the next two years, it should be able to promote the turning point of the out-of-stock market.

The news of each original factory in June:

Bosch: A new plant in Dresden, Germany has been completed, and will start producing chips for vehicles in September.

Nexperia: The 8-inch production line in Manchester, UK, was launched, and new MOSFET products were put into production.

STMicroelectronics: Cooperating with Tower Semiconductor to build a 12-inch plant in Italy, which is expected to be put into production in 2022.

Yangjie Technology: The first phase of the integrated circuit and power semiconductor packaging and testing project was put into production.

Taiyo Yuden: Announced the construction of a new MLCC material plant, the specific product is barium titanate, which is expected to start in September this year and be completed in December next year.

Changjiang Electronics Technology completed the acquisition of ADI's Singapore factory: Changjiang Electronics Technology announced on June 1 that it officially completed the acquisition of ADI's Singapore test factory.

Zhaoyi Innovation released its own brand memory: On June 3, Zhaoyi Innovation announced the mass production of its own brand 4Gb DDR4 product GDQ2BFAA series, which is mainly used in set-top boxes, TVs, car audio and video and other fields.

TSMC plans to set up a factory in Japan: In mid-June, it was reported that TSMC planned to set up a chip factory in Japan to introduce 28nm and 16nm processes for the production of CIS and automotive MCUs.

Macronix 6-inch factory confirmed for sale: In mid-June, Taiwanese memory manufacturer Macronix sold its 6-inch factory to Tokyo Weili, a Japanese semiconductor equipment manufacturer, and the factory's equipment was sold to the mainland's Jinshajiang Group.

SK hynix acquires 8-inch foundry: In late June, it was reported that SK hynix would acquire Key Foundry, an 8-inch foundry, to expand its own foundry capacity.

Judging from the actions of the original factory, most of them are power semiconductors and storage, which just echoes the areas with the most serious price increases. It is expected that after these production capacities are opened, the shortage of car cores will be greatly alleviated. According to the recent view of Ye Shengji, chief engineer and deputy secretary general of the China Automobile Association, the shortage of car cores reached its peak in the second quarter. It is optimistic that the supply of car cores will begin to ease in the second half of the year, and normal supply is expected to resume in the middle of next year. After the supply of car cores is restored, IC supply in other industries will also return to normal by the end of next year. EP3C80F484I8N

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