Exclusive: Inverter manufacturers are actively purchasing chips and discussing plans for the year after next to prepare for the supply of raw materials

The reporter found that from January 1 to July 19 this year alone, the total amount of electronic components such as Finio IGBT ordered by Jinlong Technology reached 1.0698 billion, which is dozens of times the 40 million yuan from July to December last year.

In 2020, the inverter manufacturer only purchased 140 million yuan from Finio. Therefore, in the first seven months of this year, Jinlong Technology's purchases from chip manufacturers are 6.6 times higher than the total amount of last year. In 2018 and 2019, Jinlong Technology's purchases from Finio were 57.68 million yuan and 85.4364 million yuan respectively. The 1 billion purchase orders in the first seven months of this year far exceeded the previous year and the year before that.

Jinlong Technology revealed that the main contents of the above-mentioned chip contract are: the purchase of electronic components such as IGBT is the company's routine business and will not have a substantial impact on the company's performance and operating conditions; the company has the right to cancel undelivered orders; affected by the macro-economy and the epidemic, the global trade environment and international logistics have undergone major changes. "Chip shortage" is a common problem faced by the entire power electronic equipment industry and even other industries. The shortage of chips caused by the shortage of wafers has led to the delivery cycle of specific electronic components such as IGBT transistors of Jinlong Technology continuing to be significantly extended by multiples. The company combines the existing inventory, predicts the planned demand for raw materials and the expected delivery period of suppliers, and determines the procurement plan based on the safety stock.

The chip shortage problem is not limited to Jinlong. Senior executives of Sungrow Power Supply recently told Energy One that this is a pain point for all manufacturers. At present, due to the rapid growth of the electric vehicle business, the demand for chips has increased several times, so the chip products supplied to inverter manufacturers have become very limited.

According to relevant information from China-Thailand data, from January to June 2021, the production and sales of new energy vehicles reached 1.215 million and 1.206 million respectively, both up 2.0 times year-on-year. From January to June, the penetration rate of new energy vehicles was 7.2%, 7.6%, 8.9%, 9.1%, 10.2%, and 12.7%, respectively, which continued to rise. The driving factors from policies to spontaneous market demand have been further verified.

So, how do inverter manufacturers determine chip raw materials? It is understood that in the early stage of each performance year (the previous year), major inverter manufacturers will determine the raw materials for the next year. However, the growth rate of photovoltaics is also very fast this year, but the supply of chips is insufficient, resulting in the photovoltaic inverter manufacturers' idea of ​​achieving a higher business growth rate being unable to realize it, and they can only purchase according to the approximate amount scheduled in the previous year.

In fact, it is still unknown whether the inverter chip supply situation will improve next year. For inverter manufacturers, it is actually difficult to grab more chips for next year. What many companies are discussing is: how to make large-scale advance reserves of chip products for the year after next.

Regarding the short-term demand for inverters in the next few months, Lu Chuan, Chairman and President of Chint New Energy, said in an exclusive interview with Energy No. 1 that from April to June this year, the operating rate of the entire industry actually showed a downward trend, because with the increase in silicon material costs, the operating rate of components has been declining. In this process, it is obvious that the growth rate of the sales business in the household market (excluding the jointly developed leasing business) is declining; and the decline is very large. Because the most important understanding of the people is that "the things I install next month cannot be more expensive than what I bought last month, otherwise I will definitely not install it, and I will wait." Therefore, the growth rate of the entire household industry is declining rapidly. As a result, the supply of inverters in June has exceeded household demand, so the supply of household inverters in June is obviously sufficient. If the cost of silicon materials and silicon wafers decreases, the national photovoltaic demand will rise again. He believes that the fastest demand should be ground power stations, which have no bottleneck for inverters, and the second is household use. Lu Chuan said that when household use picks up again, there will still be some shortage of chips, but according to the growth rate at that time, the chips should also be relieved by September. Therefore, he generally feels that if production capacity gradually increases in July and August, the shortage of inverters this year should be greatly alleviated, and the situation will not be as tight as originally expected until September.

An inverter manufacturer executive said that the reason why inverter manufacturers need to stock up on chips at this stage is that they are worried about whether inverter materials will be available throughout the year next year and the year after next, and the company must prepare for a rainy day. At present, the chip resources of several large overseas chip manufacturers such as Infineon are very tight, and the seller's market is concentrated and expanded. They are also unwilling to expand production. Because some inverter and electric vehicle manufacturers are currently testing domestic chip products, overseas chip manufacturers are worried that after rapid and large-scale expansion, their market share will be replaced by domestic products.

A person related to Growatt also told Energy No. 1 previously that it would take at least 3 to 4 months for domestically produced chip products to go from experimentation to R&D and then to be verified as useful, and the quantity cannot be effectively guaranteed. Overall, the products of established companies are more reliable, and it is difficult to choose replacements. Currently, the more effective way is to coordinate with existing chip manufacturers to provide supplies.

The Chinese inverter army has an increasing share of the global market, which has led to a gradual increase in demand for products such as IGBT. Recently, in the global inverter rankings released by IHS, 7 Chinese companies are in the top 13, including Huawei, Sungrow Power Supply, TBEA, Ginlong Technology, Growatt, Sineng Electric and GoodWe. The companies with the highest shipments in China are Huawei, Sungrow Power Supply, Sineng Electric, Ginlong Technology, Growatt, GoodWe, KSTAR, Kehua Data and TBEA. The Chinese companies that have entered the top ten global household companies are Growatt, Ginlong Technology, Sungrow Power Supply, GoodWe, Sofar New Energy and Huawei, among which Growatt ranks first. The top global centralized inverter shipments include Sungrow Power Supply, Sineng Electric and TBEA.