Due to the power outage during the facility inspection, a Toshiba MCU factory was shut down. It is estimated that it will not be able to fully resume work until September 17 (production will return to the level before the power outage). Although the shutdown of Toshiba MCU factory may aggravate the shortage of supply of vehicle MCU. However, this just leads to the issue of chip inventory of relevant manufacturers, which in no way hinders the continued decline of some MCU prices.
On September 13, Toshiba electronic components and storage devices, a subsidiary of Toshiba semiconductor business, announced that its semiconductor production base in Iwate Prefecture was shut down on the 11th, mainly because of a power outage on the 11th when inspecting power facilities.
It is reported that the plant shut down due to power failure this time is the Iwate Institute of Japan Semiconductor, a Toshiba group company, which mainly produces general MCU and other products used in vehicle mounted machines and Minsheng products. The company claims that the power outage did not cause damage to the production equipment of Iwate Research Institute, and in order to restart production, it has restarted the operation of equipment one after another, with the goal of fully resuming work on September 17 (production returning to the level before the power outage).
It seems to the outside world that the power outage will not only scrap some semi-finished products that are being produced on the production line, but also affect the shipment to customers because it still takes time to resume production.
After all, although consumer MCU is no longer in short supply, vehicle MCU and industrial MCU are still in short supply. According to the report of IC Insights, Toshiba will rank 10th among the world’s top ten MCU manufacturers in 2021. The shutdown of Toshiba MCU factory may aggravate the shortage of supply of vehicle MCU.
However, the latest news from the media in Taiwan Province of China shows that the demand of the consumer market is still overshadowed. In August, the combined revenue of micro controller (MCU) factories, which are dominated by consumer terminals, generally paid an off season performance of more than 20% annually. It is reported that the price of MCU not only dropped by 20% in the third quarter, but also may decline again in the fourth quarter. It is expected that it will not return to normal until the first half of next year at the earliest. In the second half of the year, the MCU factory will accelerate the development of new products to survive the cold winter of prosperity.
It is not difficult to find that the sluggish demand in the consumer market gradually appeared in the second quarter. After entering the second half of the year, the demand began to drop rapidly. It was also reported that the inventory level of STMicroelectronics, the leader of MCU factories, in China’s distributors had been as high as half a year, and the spot price was lower than the contract price. If the demand continued to be sluggish, the contract price might be forced to reduce again.
For this reason, the supply chain also has feedback. Due to the weak consumer demand, MCU has become one of the most seriously affected areas. In the third quarter, MCU prices fell by 20%, and the inventory level in the downstream supply chain is still quite high. It is expected that the unit price of products in the fourth quarter may fall again to a double-digit level, so that the operation of MCU plants in the second half of this year will face a cold winter of prosperity.
Therefore, in order to reduce the operational impact brought by the future consumer market, MCU factories began to accelerate the expansion of industrial control, Netcom and automotive markets. As for the issue of inventory, many manufacturers in Taiwan, China province of China also expressed their views.
Micro controller (MCU) Chang shengqun points out that the current inventory level is about four months, and the average inventory at the channel end is five months. The total inventory level of nine months has reached a record high.
Cai Lixing, executive director of MediaTek, also said that the pressure of high inflation in recent months has affected consumer confidence, and the overall economic challenges have increased the uncertainty of market demand, which has also led to a decline in chip demand. It is observed that customers and their sales channels have started to actively adjust their inventories, and it is expected that they will continue to adjust in the next two to three quarters.
Hu Zhengda, chairman of Duntai, said that at present, the company needs to solve the problem of excessive inventory, which has been actively dealt with since the second quarter, but due to the production cycle, it is expected that it will take more than a quarter to see a substantial change. At present, the inventory level at the end of the third quarter will still be higher than that at the end of the second quarter.
Realtek, another big chip manufacturer, has a much more relaxed attitude towards inventory. Although it will not see a significant decrease in the number of days in inventory in the short term, most of them are effective inventory, which can be gradually digested, and there is no need to worry about them. Realtek estimates that it can gradually return to the normal water level in the first half of next year, but it still holds a cautious and positive view on the operation in the third quarter, and estimates that the performance in the second half will be better than that in the first half.
For this reason, Wang Shouren, general manager of Lianyong, a big driver IC manufacturer, also pointed out earlier that the purchasing power of terminal consumption has been suppressed, and the market demand in the short term, especially the consumer demand, is not clear, but the demand for vehicle mounted, commercial it and E-sports applications is good. Wang Shouren said that the inventory will increase in the short term, because the production cycle is long, and the sales period of the part that has been ordered may be lengthened due to the change in demand, so the inventory will increase. It is difficult to change in one quarter, and it will take about two quarters to adjust.
Generally speaking, the common theme of the electronics industry in the third quarter of this year is inventory adjustment. Industries including PC, display card, DRAM, IC design, smart phone and panel are all facing downward pressure. It is hoped that the impact of inventory adjustment can be reduced by expanding the shipment of automotive electronics, servers, industrial computers and other still growing applications.
In fact, affected by the weak demand for mobile phones, PCs and other terminal applications, IC Design factories such as MediaTek, shengqun, Lianyong and Duntai are all facing short-term inventory pressure. At present, they can only try their best to negotiate with upstream and downstream manufacturers to maintain inventory at an acceptable level. They expect that the impact of external variables, such as inflation, interest rate hikes and other factors, which lead to sluggish consumption in the market, will gradually decrease, driving the inventory of the supply chain to gradually disappear.
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