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What is the future of the analog chips price?Get weaker?

Analog IC as the second wave of the drive IC into the stock price correction of the group, the stock price almost compared to the high point has been cut, the market re-examination of the possibility of this group. In terms of fundamentals, as most of the applications are focused on consumer electronics-related industries, orders are still quite weak in the first quarter, and new pulling power may start after April at the earliest. However, inventories are still high, so it will take time to wait for new momentum or new film investment.

 


From the perspective of this year's operating structure, the situation of the top and bottom of the second half of the year seems to have been settled, but it is still impossible to say how the demand will rebound in the second half of the year. However, from the perspective of the volume of open cases, it is understood that the general willingness of brand customers to develop new products is still high, most according to the original plan, but it is uncertain when the volume will be released after the opening of the case.

 

Industry executives said that most of the development cases in the past new year will be completed at the end of the year, the first quarter, so the timing is now underway, as to whether it will be released in the second quarter, the third quarter as in the past, it is still unclear.

 

The key point is in the progress of sales of old products, the time of new product certification, whether the two can be connected up, is to observe the time point. If we look at the inventory is also an indicator, generally speaking, the amount of inventory in the fourth quarter of last year will be high again, may come to a peak point, while the first quarter of this year will remain stable, or a small drop.

 

The amount of inventory and the amount of investment also has an absolute relationship, because some small factories and foundries previously signed a long contract, a single month or a single quarter to have a certain amount of investment, however, now most contracts can have a small degree of flexibility to adjust, so most of the breach of contract will be recognized in last year's earnings, but some will continue to the first half of this year, depending on how the contract between the two sides.

 

From the analog IC price point of view, it is understood that the current price continues to fall, and customers still continue to cut the attitude, coupled with the foundry has announced price increases, from the state of inventory can also be connected to the use of funds, the IC design industry, the proportion of general-purpose high, whether there are new products, new areas of momentum, is particularly important. Can squeeze out funds to invest in new technologies and new products, will be the key direction in the medium and long term after this wave of correction.

 

Top 10 analog chip suppliers occupy half of the world

 

IC Insights released the top 10 analog chip suppliers' sales, and market share ranking, 2020 and 2021 is not much different, the top three are DEI (TI), ADI (ADI), and Skyworks (Skyworks).

 

TI's analog chips will account for 75% of the business in 2020, with sales of $10.886 billion, an annual increase of 9%, and a market share of 19%, of which about half of the process is 12-inch wafers. DEI has built a new 12-inch (300mm) semiconductor fab in Sherman, Texas, USA, which is expected to go into operation in 2025. The new fab will join the existing 12-inch fabs, including DMOS6 in Dallas, Texas, RFAB1 and RFAB2 in Richardson, Texas, and Lehi in Utah. (Lehi) LFAB has been in production at the end of 2022.

 

ADI (ADI) market share of about 9%, after the acquisition of Linear in 2017, access to current sensors, the cloud with high current and other new markets, the proportion of revenue is mainly industrial (about 53%), followed by communications (about 21%), automotive (about 14%), and consumer electronics (about 11%). Sijiaxun (Skyworks) benefits from the growth of demand for wireless communication products, as well as 5G, and Wi-Fi 6 technology upgrades, market share of 7%.

 

Europe's three major suppliers Infineon (Infineon), STMicroelectronics (ST), NXP (NXP) global market share in 2020 total 17%, of which, Infineon benefit from the automotive, power and other sensor demand heating up, better performance than STMicroelectronics and NXP. As for Maxim (Maxim) has been acquired by ADI (ADI).

 

ON Semiconductor (ONSemi) in the development of power semiconductors second only to Infineon (Infineon) and DEI (TI), products include power components, sensors, power management, end-use applications covering automotive, medical, consumer electronics, industrial, communications, and cloud areas, and automotive (about 37%) as the bulk of the industrial second (about 28%). Microchip Technology (Microchip) products are mainly used in automotive, military, aerospace, communications, computer, manufacturing, and consumer electronics, and other fields. Japanese IDM major Renesas Electronics (Renesas) from 2021 to maintain the fab-light (fab-light) strategy to expand outsourcing foundry to improve the supply of microcontrollers (MCU) and power semiconductors, hoping to increase the supply of MCU by 50% by 2023.

 

Gartner statistics, in 2020 the global automotive semiconductor output value of about $ 37.4 billion (about NT $ 1.05 trillion), of which, Infineon, NXP, Renesas, DEI, and STMicroelectronics 5 IDM accounted for 43%, especially Infineon market share of 11.6%, as the leading automotive semiconductor.

 

Zhang Shijie observed that the world's top 10 analog chip IDM companies have a strong application system support of the home country, such as the U.S. system - defense industry, Europe, Japan - the automotive industry. The U.S. system factory in space, military industry support, in the specification, the operating environment of the ultimate development, and the product export control, to maintain their own advantages and the downstream attraction force.

 

European and Japanese factories use their strong automotive industry energy, from development to safety regulations, to exclude foreign competition, and also accumulate chip development to the whole vehicle system engineering energy. However, analog chips attach importance to specifications, from the process, design, and assembly must be optimized together, test also need to rely on self-test procedures, and IDM to a certain extent must be vertically integrated, to South Korea, for example, South Korea Hyundai (HYUNDAI) global growth is rapid, gradually replicate the European and Japanese automotive IC strategy.

 

TI's new 12-inch fab stirs up analog chips

 

TI announced at the end of last year that its new 12-inch fab LFAB in Lehi, Utah, had started mass production of analog and embedded products. Market research institutions analysis, in order to maintain the new plant crop rate, DEI began to price adjustment, power management chip factory operations may be affected.

 

DEI announced the news of LFAB mass production through a press release, pointing out that LFAB is DEI's second 12-inch fab to be put into mass production of semiconductors in 2022, and RFAB2 in Richardson, Texas, started initial mass production in September.

 

DEI said that LFAB can support 65nm and 45nm technologies and will provide capacity for electronic device needs in areas such as renewable energy, electric vehicles and space telescopes.

 

Market research agency Tibco Technology analyst Zeng Guanwei said, DEI currently requires customers to buy products from TI.com, the price is automatically regulated for the system, another part is the whole package for bargaining, in order to maintain the new plant crop rate, DEI began to price adjustment, for the power management chip industry has caused the impact.


In the first half of 2023, the overall consumer electronics supply chain continues to de-stocking, it is expected that all manufacturers will still face the pressure of product pricing.

 

Power management chip factory pointed out that DEI's new plant is mainly for the automotive, industrial and data center applications market, and the domestic industry to focus on the computer and other consumer products market is separated, the impact on Taiwan's factories is relatively limited.

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