2019 Automotive Semiconductor Market Trend Survey-EEWORLD

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IHS Markit recently revised down its forecast for global new car sales in 2019 to 91 million units, a 2% year-on-year decrease, compared with the original forecast of a year-on-year increase. Kyocera, whose orders dropped by 10% last quarter, said that "the demand for automotive-related products is currently slowing down"; MLCC giant Murata's orders dropped by about 17%, saying that "demand in a wide range of fields such as smartphones, PCs, and automotive applications is sluggish"; TDK's orders also dropped by about 5%, mainly due to a decrease in demand for automotive parts such as capacitors and inductors; Alps, which saw an increase in orders, also said that "the demand for automotive parts has decreased."

Judging from several major European and American companies related to automotive semiconductors, this situation is still very common. The overall semiconductor market may enter a period of adjustment like in 2008 and 2009. The amplitude of the correction is not low, and an obvious gap has appeared.

Note: As shown in the figure below, the market outlook for 2019 is a consensus. Whether the market can recover in 2020 depends on the subsequent macroeconomic situation.

As for the revenue forecasts of several major automotive semiconductor manufacturers, it is easier to reflect the current sluggish global automotive market.

In the automotive business, there is also differentiation, which is divided into three categories:

Still can grow

It is basically flat, with a slight increase, mainly due to the growth of new business demands such as electric vehicles, which offset the overall decline in demand. For example, in Infineon's quarter, the growth rate slowed down.

Note: Infineon's earlier estimate was 9% annual revenue growth, but in the context of the macroeconomic environment this was actually cut in half to 4%.

Quarterly performance of all Infineon businesses

Infineon's automotive business quarterly results

The impact is relatively limited

Slight negative growth: For companies like NXP, the profit margin was not greatly affected after the demand decreased.

From the perspective of automobiles, the decline is also quite large. Fortunately, we have a large business and other business segments can make up for it a little.

NXP's revenue declined year-on-year, but is still maintainable.

Greatly affected

This can be divided into those whose businesses are more restricted by regions, such as Renesas (which has difficulty in developing European and American automobile companies with a Japanese layout) and some chips that mainly revolve around Powertrain, such as passive devices and sensors. Small semiconductor companies are very sensitive to both the drive and reduction of demand.

The problem with Renesas is that previous problems keep erupting, and I don’t know how the Q2 results to be released in August will be.

Melexis, a Belgium-based global top three automotive semiconductor sensor supplier, saw a significant gap between its performance in the first two quarters of 2019 and that of 2018, and also saw a significant decline in its profit margins.

Market situation of automotive MCU

In terms of specific product segments, the automotive MCU market totaled $6.7 billion in 2018 (3.3 billion MCUs, priced at $2.02 per piece), and the average sales per quarter in 2018 was estimated to be $1.68 billion; in the first quarter of 2019, automotive MCU revenue fell to $1.4 billion, and the market fell 15.2% in terms of amount and 17% in terms of quantity. It can be clearly seen here that the consumption of inventory established by the demand given by all previous Tier 1 suppliers has caused semiconductor manufacturers to quickly switch from a boom cycle to a depression cycle. The overall market in Q2 has rebounded compared to before, but don't expect too much. According to forecasts, the automotive MCU market will fall by 13.3% and the quantity will fall by 15.4%. MCU is the biggest part of the car, generally accounting for 38.7%, and we can also see the core problem from it.

Note: Due to the integration of automotive electronics, the demand for MCU may remain unchanged, but the number of ECUs is reduced. Many other peripheral devices are integrated together and similar items are combined.

Summary: I had dinner with Brother Chao a few days ago. China is currently supporting the chip industry. From the overall environment, this new field has changed from efficiency first, using foreign chips to domestic independence, with the will of a national chess game. However, based on the terminal market environment, there is indeed no paradise anywhere.

Reference address：2019 Automotive Semiconductor Market Trend Survey

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