Renesas Plant Returns To Work And Core Shortage Continues, TSMC Seeks To Expand Production Capacity

In the second quarter of 2021, the topic of core shortage is still serious, especially in the automobile industry.

According to IHS data, semiconductor supply may not stabilize until the fourth quarter due to the impact of blizzard in Texas and the fire at Renesas chip factory in Japan. The shortage of chips may lead to the reduction of 1.3 million vehicles in the second quarter.

However, at present, the production line of Renesas electronics, which was shut down due to the fire, has resumed production on April 17, with a capacity of about 10% of that before the fire. Renesas electronics expects to recover 50% of its capacity in April and reach the original capacity level by mid May. At the previous communication meeting, ryssa electronic president Shibata Yingli told reporters including the 21st century economic report that with the help of Japanese domestic and foreign partners, it can be called a miracle to be able to recover from the miserable situation after the fire within one month.

In the case of insufficient production capacity, TSMC and liandian, the leading manufacturers of wafer foundry, have announced expansion of production capacity. On April 28, United Power announced to invest 23 billion yuan to expand the mature process production line. Not long ago, TSMC decided to invest 2.9 billion US dollars to expand the production of Nanjing plant.

The release of production capacity will take time. According to TSMC's forecast, the shortage of car chips will be eased in the third quarter. Many institutions predict that global capacity supply and demand will not improve until next year, but the structural shortage of semiconductors will still be normal.

Continuous increase of MCU price due to lack of core

Among the terminal chips affected by the fire in March, 66% were automotive chips, and 34% were infrastructure and IOT chips; According to the chip type, 64% are MCU, 34% are SOC and 2% are analog.

It can be seen that this has led to further shortage of vehicle MCU supply. In addition, in mid April, TSMC Fab14 P7 factory area of some products manufactured by Renesas OEM company was cut off, resulting in a more serious shortage of MCU products.

Although Renesas electronics has returned to work, it will take longer for the shipment volume to recover. It said that the time for the shipment volume to return to the normal level may be delayed by 7-10 days compared with the original estimate of 100 days, that is, the shipment volume may not return to the pre disaster level until early July. At the same time, Renesas has made use of other factories and external wafer factories such as TSMC, and is expected to produce more quantities at a faster speed.

At the same time, in addition to automotive MCU, other categories of MCU shortage is also continuing. It is reported that a number of MCU manufacturers announced a suspension of orders and price increases. On April 20, major MCU manufacturers such as Xintang technology, Jiuqi technology and Lingtong technology announced that they would increase their quotations by 10% - 20% in the near future. It is understood that these price increases are aimed at small household appliances and consumer MCU, and the delivery cycle has been extended from normal 4-6 weeks to 5-10 months.

On April 21, shengqun semiconductor issued a notice saying that orders would be suspended from now on. Shengqun said that the wafer and packaging plants would notice another wave of price increase in the near future, with a price increase range of 15% - 30%. It is expected to resume accepting orders in 2022 before the middle of may, and the orders will be suspended when the capacity orders in 2022 are full. The order will be delivered in 2023. It is estimated that the wafer plant will not open to order until 2023 capacity is provided in May 2022.

The reporter learned that the price of MCU in the market is surging. The price of MCU which was originally priced at several yuan or more than ten yuan has risen several times to dozens of times. There is also the phenomenon of hoarding fried chips, which makes the transaction price much higher than the original factory price.

The report of Cinda electronics pointed out that the outbreak of downstream demand after the outbreak of the epidemic is the fuse of the current round of shortage and price rise. The panic stock preparation in the industrial chain caused by the uncertainty of Sino US relations has partially enlarged the elasticity of demand. However, the shortage of 5-7nm advanced process for a long time, the tight balance between supply and demand for 40-65nm process for a long time, and no production expansion for 8 inches (above 90nm) for a long time, lead to the supply is difficult to respond in time.

United power, TSMC and other rapid expansion of mature capacity

Cinda electronics believes that the current round of shortage and price rise in the semiconductor industry is not only driven by the inventory cycle, but more importantly, a new round of demand explosion such as 5g, aiot and automotive electronics is coming, and the semiconductor market will usher in a demand cycle of up to 5-10 years.

In the face of huge demand and insufficient production capacity, wafer manufacturers have started the competition of expanding production equipment. According to the reporter, eight of the world's top ten foundry companies have disclosed their plans to expand their production, including TSMC (with an investment of US $100 billion in the next three years), Samsung, liandian, Gexin (planned to invest $1.4 billion in 2021), SMIC (expected to spend 28.09 billion yuan in 2021), Powerchip, world advanced, Huahong semiconductor, etc, It mainly focuses on the mature process.

In addition, Intel has just announced that it has entered the foundry industry and plans to invest US $20 billion to expand its wafer plant. The semiconductor plant project of SK Hynix (about US $106 billion) of IDM plant has been approved by the South Korean government. Based on this calculation, more than 200 billion US dollars have been invested in the wafer production line in recent three years.

On April 28, Youda, a panel manufacturer, announced that it would sell its l3b plant to world advanced for NT $905 million (about RMB 210 million). On the one hand, Youda is weeding out the old uncompetitive production lines. On the other hand, the factory was originally an 8-inch Wafer Factory purchased by Youda from semiconductor companies. Now, when 8-inch wafers are in short supply, the world's advanced companies can just reuse them. Moreover, due to the cost and investment benefits, the Fab has not expanded its 8-inch fab for a long time, and the equipment is hard to find, Youda's plant has basic equipment, which can be produced quickly. Both sides take what they need.

On the same day, liandian announced that it would join hands with a number of global IC design customers to expand the capacity of the 12 inch fab12a P6 plant in Tainan Science Park. Under this reciprocal agreement, customers will pay a deposit in advance at an agreed price to ensure long-term guarantee of P6's future capacity.

United Power said that the P6 plant will be equipped with 28nm production machines, which can be extended to 14nm production in the future, which can directly meet the upgrading needs of customers in the future process progress. At present, in the 28nm OLED drive IC, united power has a leading position. Through this expansion, it can strengthen its importance in the semiconductor industry again. The P6 capacity expansion plan is expected to be put into production in the second quarter of 2023, with a total planned investment of about NT $100 billion (RMB 23.2 billion).

Hong Jiacong, chairman of united power, pointed out that the capacity of mature process will be seriously out of stock because we have not expanded the capacity of mature process for many years. However, the recent market dynamics have allowed united power and its customers to find a way to take into account the return on investment oriented capital expenditure strategy, and at the same time relieve this wave of capacity shortage.