Taiwanese media: MCU quotations begin to avalanche

According to Taiwan media Economic Daily, the storm of semiconductor chip order cuts and price cuts has expanded. Microcontrollers (MCUs), which were previously relatively priced and in short supply, have begun to experience an avalanche of quotations. Consumer applications targeted by Taiwanese manufacturers are particularly under price pressure. There are even reports in the mainland market that the prices of products from the world's top five MCU manufacturers have been halved. Companies such as Nuvoton, Holtek, and Songhan are under pressure in the future.

MCU has become another key chip facing pressure to cut orders and reduce prices after the market reversal of driver ICs, some power management ICs and CIS image sensors, revealing that the supply and demand imbalance in the semiconductor market is quickly cooling down. After clients placed repeated orders for the chips that were originally in short supply, the recent pressure from inflation, war, interest rate hikes, etc. has led to lower-than-expected demand, and the market has begun to cut inventories and reduce prices to clear them out.

Last year, the world was in a chip shortage, and MCU was also a hot commodity, pushing related manufacturers to rewrite new records in operations. Taiwan's MCU leader Nuvoton's profit soared more than 5.5 times last year, with a net profit of NT$7.27 per share; Holtek's profit nearly doubled, with a net profit of NT$9.04 per share; and Sonix also achieved a record high of NT$8.71 per share. As the market reverses, Taiwanese manufacturers will face the dilemma of declining profits.

Recently, the mainland market has reported that the prices of international first-tier MCU manufacturers such as STMicroelectronics, Infineon, and Texas Instruments have dropped significantly. The mainland media also revealed that the price of STMicroelectronics' general-purpose MCUs has been slashed from RMB 70 in March to RMB 32 at the current stage; some MCUs that were originally priced at more than RMB 100 have fallen to double-digit prices, which has attracted attention.

According to mainland media reports, general-purpose MCU manufacturers basically raised prices for customers once or twice last year. As the global environment changes rapidly, affected by factors such as inflation, interest rate hikes, and cooling terminal demand, the inventory levels of customers and distributors are currently high, causing the prices of general-purpose MCUs to begin to decline.

The supply chain revealed that the server, automotive and industrial control MCU markets continue to be strong, and the prices of high-end products remain relatively strong. However, Taiwan's MCU manufacturers mainly focus on consumer product applications and cannot escape the pressure of order cuts and price adjustments caused by this wave of inventory adjustments.

An unnamed Taiwanese MCU manufacturer revealed that demand in the mainland market has indeed slowed down, and consumer-oriented home appliances in the MCU field have been greatly affected. Therefore, the company has also responded to customer requests and discussed price adjustments with customers on a case-by-case basis. The current average price reduction is about 10%, and has not yet returned to the starting price before the epidemic.

Nuvoton is the leader in Taiwan's MCUs. The company's official website lists 585 MCU products, including 8-bit and Arm Cortex-M series. Holtek admitted that due to the weak demand in the consumer market, customers' purchase power slowed down and it continued to adjust its inventory.

For Sonix, MCU applications are mainly divided into general-purpose, medical measurement, and computer peripheral applications, with general-purpose accounting for more than half in the first quarter. It is reported that Sonix Multimedia IC is put into production in a 12-inch plant, while MCU is put into production in an 8-inch plant. Currently, there is basically no issue of capacity supply and demand gap.