To ask when we can end the chip shortage and price increases, no one can accurately give a conclusive conclusion. The predicted "nodes" continue to move backward, and the trend of price increase is getting more and more intense. Beginning in September last year, affected by multiple factors mainly due to the shortage of wafer capacity, major brands of electronic components and industry chain companies have entered a chain reaction of price increases, from wafers to packaging and testing, materials, and chips. According to foreign media reports, due to the chip shortage and price increases, even the second-hand semiconductor market is now being affected, and the demand and prices of second-hand equipment such as photolithography machines, rubber-coated developers, some measurement equipment, etching equipment, and ion implantation equipment, are rising.
Insufficient supply of wafer capacity is the root cause of the lack of core prices. After TSMC adjusted the foundry price of 10%-20% in 2022, UMC, Powerchip, and VIS also followed suit. Occupying 60% of the wafers, almost all Taiwanese foundries with foundry share have announced price increases in 2022.
A summary of the latest news from major chip manufacturers:
Intel: News on April 14 that the chip industry will not return to a healthy state before 2023, and it will take several years to ease
STMicroelectronics: The global chip shortage will gradually improve in 2022 and will not return to normal before the first half of 2023. Increase all product prices in the fourth quarter of 2021, including existing inventory
Xilinx: In order to offset the increased costs, Xilinx increased the price of all orders on and after November 1, 2021. Increase by 10% on all VersalM series and 20% on all other products.
AD: Starting from December 5, 2021, the price increase of some products will be implemented. The targeted products include some old products and the prices of some products in its Maxim product portfolio. Other products will still be implemented at the original 6% price increase. In addition, the delivery period of AD's main products has been continuously extended, many even reaching more than 30 weeks, and some materials are out of stock.
Infineon: It will continue until 2023, and it will take time to build and transform wafer processing plants.
Renesas: Chip supply and demand are expected to slow down around the first half of 2022.
Toshiba: The chip supply shortage will continue at least until September next year; part of the demand will even be delayed until 2023.
From this point of view, the state of lack of core prices will continue at least until the first half of 2022. Why hasn't the chip shortage and price rise been alleviated? A large part of the reason comes from the lengthy electronic industry chain, which includes raw materials, design, manufacturing, packaging, testing, chips, modules, terminal factories and then terminal products. On the supply side, manufacturers in various links increase prices to grab capacity, chips, and raw materials. To a large extent, a demand "bubble" will be formed. In addition, the market's "electronic chip speculation" has attracted the chaos of influx of outsiders. "Expansion" has aggravated the imbalance between chip supply and demand, and ultimately caused those who really need chips to be unable to buy chips. For the chip shortage of automotive chips, the hardest hit area has been alleviated since October, the transition from "total shortage of chip" to "out of stock for unpopular chips." But in terms of categories, analog ICs, power management ICs, driver chips, high-voltage MOS, IGBTs, etc. are still the hardest hit areas for shortages.