Core view
Semiconductor: global semiconductor sales increased by 26.8% year-on-year in January, and the frequent Black Swan events impacted the semiconductor supply
Global semiconductor sales increased by 26.8% year-on-year. In January 2022, the sales volume of the global semiconductor industry was US $50.7 billion, with a year-on-year increase of 26.8% and a month on month decrease of 0.2%. At the regional level, the year-on-year growth rate of sales in the Americas was 40.2%, followed by 28.7% in Europe, 24.4% in China, 21.0% in Asia Pacific / all other regions and 18.9% in Japan.
The conflict between Russia and Ukraine broke out, and the chip cost has upward pressure. Ukraine is a major supplier of neon, argon, krypton, xenon and other semiconductor raw materials. Nearly 70% of the world’s neon is supplied by Ukraine. Neon is mainly used in the 250130nm mature process of 8-inch wafers. The outbreak of the conflict between Russia and Ukraine may impact the supply of inert gas in Ukraine. The reduction of gas supply will lead to a rise in prices and a rise in chip production costs. In addition, Russia is one of the suppliers of palladium, a key element in the manufacture of sensors and memories. The Russian Ukrainian war will have a certain impact on the stability of the global semiconductor supply chain.
48 industrial zones were affected by radio waves and, and the production equipment of semiconductor manufacturers was affected. According to statistics from the Ministry of industry of China’s Ministry of economy, 48 of the 62 industrial zones in Taiwan were affected by power cuts. The south of the science and Technology Industrial Park was greatly affected, and 521 manufacturers were cut off. The sudden power failure caused damage to the supply chain of semiconductors, optoelectronics and apple on the island, and the production equipment of wafer foundry and large panel factory were affected due to the voltage drop. On the production line, the automatic material conveying loses power for a very short time, which may cause huge losses such as scrapping of wafer fragments.
We believe that up to now, the imbalance between supply and demand in the semiconductor industry has not been significantly alleviated. The frequent Black Swan events have led to upward pressure on chip costs in the short term. In the long run, the restoration of supply and demand balance is expected to be delayed until 2023. Since all semiconductor manufacturers and gas supply plants have inventories, there is little possibility of a complete power outage in the short term. However, the conflict between Russia and Ukraine has impacted the inert gas supply, resulting in a reduction in gas supply and an increase in chip costs in the short term.
At present, the proportion of renewable energy among semiconductor manufacturers in Taiwan is very low. In the future, they may face various variables such as shutdown and power shortage for several years, which will still be a crisis pressure that is difficult to remove. On the other hand, the limited water supply has also become an urgent crisis for TSMC and other semiconductor supply chain enterprises. At present, with the advent of summer, power shortage and power tripping may become the norm, while the development of renewable energy is still in its infancy, and there is no solution for the moment. Coupled with water shortage, earthquake and other force majeure, TSMC and other wafer foundries may face challenges again, The possibility of lengthening the delivery date of chips increases, and the recovery time of supply-demand balance may be postponed to the beginning of next year.
Risk tips
Downstream demand is lower than expected; The frequent occurrence of black swan events brings the risk of capacity obstruction.
Related subject matter
Semiconductor design: [ Will Semiconductor Co.Ltd.Shanghai(603501) ] [ Allwinnertech Technology Co.Ltd(300458) ] [ Gigadevice Semiconductor (Beijing) Inc(603986) ] [ Sg Micro Corp(300661) ] [ Maxscend Microelectronics Company Limited(300782) ]; Wafer Foundry: [ Semiconductor Manufacturing International Corporation(688981) ] [Huahong semiconductor]; Semiconductor materials: [ Red Avenue New Materials Group Co.Ltd(603650) ] [Jingrui shares]; Power semiconductor: [ Wingtech Technology Co.Ltd(600745) ] [ China Resources Microelectronics Limited(688396) ] [ Hangzhou Silan Microelectronics Co.Ltd(600460) ] [ Starpower Semiconductor Ltd(603290) ] [ Wuxi Nce Power Co.Ltd(605111) ]
Consumer electronics: [ Goertek Inc(002241) ] [ Sunwoda Electronic Co.Ltd(300207) ] [ Avary Holding (Shenzhen) Co.Limited(002938) ] [ Luxshare Precision Industry Co.Ltd(002475) ]; Smartphone: [Xiaomi group]
Folding screen: [ Jiangsu Gian Technology Co.Ltd(300709) ] [ Wuhu Token Sciences Co.Ltd(300088) ]
