The shortage tide has led to changes in the IC industry. Is it difficult for IC distributors?
Date：2021-06-11 14:00:00 Views：1708
From the rapid attack of the epidemic to the overall rise in the price of chips, many events in the past year have changedSome inherent "playing methods" of the IC industry. In the wafer foundry industry, the shortage of production capacity has spawned new business means, changing the original mode of OEM expansion and order receiving. These new changes are impacting the traditional form of the IC industry. The results are not necessarily positive, but they will have a profound impact on the future.
Customers pay for production capacity and agent factories"Low cost" expansion
The supply of chips is in short supply, and all generation factories put production expansion on the agenda in the first half of the year. Earlier, Taiwan wafer foundry Lianhua electronics gave up7Nm process R & D, only engaged in mature processes. At present, liandian is a big winner in this wave of chip market. As the foundry capacity of wafers will still be tight, liandian decided to expand its production line, but the foundry did not choose to expand its production capacity alone, but brought in eight major customers to jointly fund the expansion.
Specifically, the expansion of liandian is located in Tainan BranchThe capacity of 12 inch Fab 12a P6 plant is expected to be put into operation in the second quarter of 2023. The new production line is initially equipped with 28nm machines, which can be extended to 14nm process in the future to meet the upgrading needs of customers. At present, the list of customers participating in the expansion of liandian has been exposed. There are 8 customers, including MediaTek, Samsung, Qualcomm, Lianyong and Ruiyu, involving Netcom IC, RF IC, driver IC, CIS and other components.
Among these customers, Samsung was trapped in the cold wave in the United States in February, and the chip production capacity decreased. Therefore, Samsung strengthened cooperation with liandian to make up for the production capacity gap. As early as the end of last year, Qualcomm put the power management system originally produced in SMIC internationalIC, entry-level mobile phone SOC and other orders are transferred to liandian to avoid the risk of U.S. review. As for other customers such as MediaTek and Ruiyu, due to the strong demand brought by the epidemic "housing economy", they strengthened cooperation with MediaTek.
These customers who cooperate with liandian have contracted the future of the new production lineCapacity within 5 years. The industry estimates that the capacity margin provided by each customer should be US $50-60 million. In terms of the investment of NT $100 billion (about US $3.6 billion) in the new production line, the margin provided by customers adds up to hundreds of millions of US dollars, which can bear some early construction and equipment costs. After the operation of the production line, customers have invested heavily, and liandian has completed the production expansion project at a very low cost.
stayIn the IC industry, the mode of expanding production by customers has long existed, but the scale of liandian has never existed before. Why can liandian expand its production with the help of customers? The root cause is shortage. In the time before COVID-19, market demand for mature process chips remained stable, and foundries had no need to expand production. When the epidemic hit last year, the market demand was suppressed first and then increased, and turned into an extremely short supply. Both the original IC factory and the chip foundry were determined to expand production to meet the soaring demand.
However, it will take time for the OEM to expand production. Perhaps when the new production capacity is opened, the market situation has been reversed to oversupply. The expansion of liandian's production with the help of customers is largely to avoid the excess risk in the future, so that the core capacity can be fully utilized for a long time. And for thisFor 8 customers, seizing the market is the first important thing now. When others are crowding out their heads for capacity, they can book a batch with their own money, which is undoubtedly a cost-effective business.
From the expansion of liandian, we can see that the shortage is rightThe reshaping role of IC industry model. Of course, this reshaping not only affects the foundry and chip factory, but also plays a role in the whole industrial chain.
The terminal is directly connected to the agent factory. The intermediate agent should be careful
The continuous shortage of IC supply, the "distant water does not understand the near thirst" of new production capacity, and the significant problem of "long and short materials", these factors greatly limit the shipping capacity of terminal manufacturers. Recently, it was reported that several car factories and panel factories chose to skip the link of the original IC factory and directly find a wafer foundry to ask for production capacity, which is unprecedented.
In terms of specific practices, these terminal manufacturers first check the inventory level and process of the chips they need, then book the production capacity from the wafer foundry, then allocate the obtained production capacity to the chips with the most serious shortage, and contact the relevant original factories for chip production. theseThe original IC factory itself is the customer of the agent factory. The whole process only needs to cast the chip according to the requirements of the terminal manufacturer, and then deliver the produced chip.
According to the previous model, the customers of wafer foundry are onlyIC original factory (whether fabless or IDM), but under the current shortage background, terminal manufacturers also began to connect with OEM factories in order to effectively solve the problems of material shortage and short and long materials. On the whole, this new model mainly reflects that under the shortage market, terminal manufacturers seek more voice in the industrial chain to obtain sufficient and balanced material supply.
In addition to the car factories and panel factories mentioned above, there are also recent reports that,HP, a PC giant, went directly to Taiwan to purchase materials from the supply chain beyond agents, OEM and other links. The order time limit is up to one year, including all kinds of IC devices. In addition, recently, there are rumors in the industry that Tesla, an electric vehicle manufacturer, will buy the 6-inch factory for sale by Taiwan IC manufacturer wanghong, with the purpose of alleviating its own chip shortage.
The events listed above are all faced by terminal manufacturersTo solve the problem of "lack of core", seek solutions from the upstream of the industrial chain. These manufacturers go through various intermediate links and directly ask the chip manufacturer for production capacity and materials. As far as its effect is concerned, on the one hand, it can really strengthen the efficiency of goods preparation and solve the problem of long and short materials; However, if HP grabs materials from its own OEM, it will also cause confusion such as repeated orders, causing trouble to the industrial chain.
In addition, it is worth noting that terminal manufacturers directly connect with chip manufacturers, which will also reduce their dependence on chip agents and distributorsIt is another challenge for the traditional distribution model of IC industry. In recent years, IC original factories have generally begun to turn to the direct selling route of customers, which has set off the reform of distribution mode. Now major customers have begun to connect directly with wafer foundry, which will further weaken the traditional distribution mode. It can be predicted that the material circulation of IC industry is going out of a new route, and the process will be "several joys and several sorrows".
Conclusion: shortage will pass, and change will not go backwards
Summarizing the above industry trends, the root causes are"Shortage". The chip market since the epidemic is not only a simple shortage and price rise, but also reshaping the shape of the whole industrial chain step by step. Due to the cyclical characteristics of the IC industry, the shortage and price rise will stop one day, but the industry changes caused by this wave of market will remain. For practitioners, maintaining keen observation and timely adapting to the "new normal" will be the key to competitiveness in the future.