Morgan Stanley warns: Automotive chips may trigger a wave of monopoly cuts

Automotive chips that were originally out of stock have become oversupply warnings. Morgan Stanley Securities pointed out in the latest "Asia-Pacific Automotive Semiconductors" report that due to two major factors, Renesas and ON Semiconductor have Semiconductor factories have issued orders to cut orders and are reducing chip testing orders in the fourth quarter.

The reasons for major semiconductor manufacturers to issue orders to cut orders include: 1. TSMC’s automotive semiconductor wafer output increased by 82% year-on-year in the third quarter, 140% higher than before the epidemic; 2. The sales of electric vehicles in mainland China have weakened (accounting for (50% to 60% of global electric vehicles), automotive semiconductors are currently in full supply, and a wave of order cuts is beginning to occur.

Morgan Stanley Semiconductor Industry Analyst Zhan Jiahong pointed out that from the latest investigation of the semiconductor wafer foundry back-end process, some automotive semiconductors such as MCU and CIS suppliers, including Renesas Semiconductor, ON Semiconductor, etc., are currently cutting some of the Chip test orders in the fourth quarter show that automotive chips are no longer out of stock.

Zhan Jiahong said that comparing global automotive semiconductor revenue trends with changes in automotive production, it can be found that the compound annual growth rate (CAGR) of automotive semiconductor revenue in recent years has been as high as 20%, while automotive production has only been 10%.

Judging from this trend, the oversupply of automotive semiconductors should have occurred at the end of 2020 and early 2021. However, due to the spread of the global COVID-19 epidemic at that time, transportation was not smooth and even supply was cut off, resulting in an extreme shortage of automotive chips and a continuing shortage. goods.

At this moment, as the impact of transportation gradually eases, coupled with TSMC's substantial increase in automotive chip production in the third quarter, and the weakening market demand in mainland China, which accounts for 50% to 60% of global electric vehicle sales, automotive chips Production is now at full capacity, and the chip shortage problem that has plagued the automotive industry for a long time has officially ended.

Regarding the automotive semiconductor supply chain, Zhan Jiahong believes that "some are happy and some are sad." Among Taiwanese manufacturers, as automotive high-speed computing (HPC) continues to be optimistic, and IDM manufacturers will outsource and release more 28nm automotive MCUs with embedded memory, they continue to be optimistic about TSMC and give it an "outperform" rating. rating.

In addition, Sechip-KY also received an "Outperform" rating due to its cooperation with global and mainland electric vehicle brand manufacturers on future ASIC designs; KYEC was rated "Neutral" due to its automotive semiconductors accounting for approximately 6%-7%. ”, but Zhan Jiahong continues to prefer the sustainability of its profits next year.

As for Silicon Power-KY, World Advanced and Hejing, due to weak foundry orders for automotive power management ICs, LCD driver ICs and power management ICs in mainland China, 8-inch bare wafers accounted for 30% of automotive semiconductors respectively. %, with "underperform", "underperform", and "neutral" ratings.