Chinese companies stockpile chips for cars, exacerbating global chip shortage

This year, the global shortage of automotive chips has become more serious, with almost all major automakers cutting production or short-term operations to varying degrees due to shortages caused by Chinese companies stockpiling chips. I’m experiencing a stop.

Taiwan Semiconductor Manufacturing (TSMC), the world’s largest chip maker, has begun production in “super hot run” queuing mode, cutting production processes in half, but many orders are still 6-9 months late. I will.

Since this year, the shortage of automotive chips has led to an increasingly prominent phenomenon in automobile production. Volkswagen not only cut production in China, but also experienced a great deal of turmoil in global car production. Ford has reduced production in the United States. Nissan, Honda and Daimler have also experienced short-term production outages.

The impact on Chinese automakers was relatively small and not so obvious, at least until the end of last year. This is due to the large stockpile of Chinese companies since the latter half of last year. vehicle.

Chinese companies ask Taiwan for chips

According to Chinese media, after the US sanctions on Huawei and Semiconductor Manufacturing International Corporation (SMIC) began in August last year, a large number of major Chinese manufacturers such as Huawei and SMIC have been struck by chip shortages and concerns about price increases. We have started to stockpile. The amount of chips. As a result, it is difficult to procure chips for automobiles as well as electronic devices such as mobile phones.

According to the sanctions imposed by the US government on Huawei and SMIC, US companies need a license to export such products to SMIC. As a result, Chinese companies are now purchasing from Taiwan through distributors in addition to their inventory until September last year.

Microcontrol units (MCUs) are the leading automotive chips, with an average of over 70 MCU chips used in each vehicle, accounting for 30% of all semiconductor components used in automotive. In addition, Taiwan Semiconductor Manufacturing Company Limited (TSMC) accounts for 70% of the world’s MCU production. This demonstrates the importance of TSMC to the global automotive industry.

Taiwanese companies in mainland China have been used to circumvent US sanctions. According to April 7th report In Taiwanese media, Taiwan’s integrated circuit (IC) design service providers in mainland China act as chip distributors. They take orders from Chinese companies in China, convert Chinese yuan to US dollars, and send the dollars to TSMC to buy chips.

In the process, certain Taiwanese banks have set up teams to help these companies solve their cash flow problems, as TSMC had to pay in US dollars instead of RMB to tip. did.

Increasing demand for chips

As another reason for the lack of chips, SAIC Motor Vice President Wei Yong of China said that in addition to stocking up due to rising chip prices, other commonly recognized reasons are mobile phones and other electronic devices. He said it would include an increase in chip demand. A device under economic recovery from a pandemic that is squeezing the supply of chips in the automotive industry. The unexpectedly rapid development of China’s automotive industry after the epidemic and the growth of artificial intelligence and connected car technology applications in the automotive sector have also led to a surge in demand for automotive chips.

Among the three major segments of wafer production: design, packaging and testing, and foundries, TSMC leads Taiwan’s wafer production and dominates the world in both foundries and packaging, 66% and 52, respectively. We are proud of the world share of%. Chinese companies still rely heavily on TSMC for wafers, as only packaging and testing in China accounts for 21% of the world market share.