SMM Network News: "it is true that the price of individual products has increased, because the supplier has raised the price for us. At present, the entire industry chain (price) is being adjusted, including raw materials, packaging, testing and other links. The price of the company's products is adjusted with the changes in the upstream." On November 19th, insiders of Shenzhen Shunhang Chip Technology Research and Development Co., Ltd. (hereinafter referred to as "Hangshun Chip") revealed to Science and Technology Innovation Board Daily.
Prior to this, there were media reports that the domestic MCU chip R & D enterprise Hangshun Chip issued a price adjustment notification letter, the specific content of the notification letter is: MCU series to restore the agent system price, all agents did not give the first half of 2021 FCST can not guarantee supply, to FCST and advance deposit can guarantee supply; storage EEPROM (24Cxx series), NOR FLASH (25QXX series), LCD driver series up 10% 20% in an all-round way.
So far, Science and Technology Innovation Board Daily reporter has not been able to get the price increase information from Zhaoyi Innovation, which is the first echelon factory of MUC in China. According to its survey by institutional investors in October this year, the company has not raised prices at present. "although it is said that some competitors are raising prices, the company has no plans to raise prices at present."
Price increase logic
It is understood that, MCU (microprocessor, also known as single-chip microcomputer, is widely used in all kinds of electronic devices to achieve control functions.
300327.SZ, a veteran MCU manufacturer, said in its 2019 annual report that the main MCU of home appliances has not been upgraded in the past five years, and the mainstream chip manufacturing process is mostly 8-inch wafer 0.11um process. In addition, when Zhaoyi Innovation, a domestic MCU head enterprise, accepted a structural survey in October this year, it also said that 8-inch and 12-inch MCU products are being used.
But at present, 8-inch wafers are facing the "dilemma" of insufficient production capacity.
Guoyuan Securities pointed out in a research report released on November 1 this year that 20H1 was affected by the epidemic, home work and online education promoted the growth of demand for computer and tablet products, corresponding to the growth of demand for panel-driven IC, power management IC and power components, superimposed chip suppliers increased safety inventory, and 8-inch wafer capacity was full.
The epidemic situation of 20H2 has been effectively curbed, the prosperity of consumer, automobile and home appliance terminal markets has warmed up, and the demand for power MOS, PMIC, sensor IC and other products has been relayed to maintain full capacity.
Due to the tight production capacity of 8-inch wafers, a number of foundry and IC designers have issued price increase announcements or account adjustment expectations. For example, when a reporter from Science and Technology Innovation Board Daily investigated whether MOSFET products would rise in price in early November this year, they found that some MOSFET manufacturers had clearly increased their prices, while many other enterprises said that prices were "in line with the market."
The above study pointed out that the logic of price increase is caused by the shortage of production capacity, and the increase in OEM prices is transmitted from the middle reaches to the lower reaches. Hangshun chip insiders told Science and Technology Innovation Board Daily that the company and customers are still in accordance with the established (price), "that is, if the upstream (price) is adjusted, we will adjust, upstream has not adjusted, we will not adjust."
With regard to the current shortage of fab production capacity, some institutional investors also asked Zhaoyi Innovation: "now the 8-inch production capacity is very tight. If the company wants to expand production next year, will the foundry increase the price?" If there is a price increase, will there be some pressure on the company's gross profit margin next year?
Zhaoyi Innovation replied that at present, the 8-inch production capacity obtained by the company is relatively stable, and the other 12 inches are also being laid out, and some are using 12-inch ones.
A reporter from Science and Technology Innovation Board Daily tried to contact Zhongying Electronics to learn more about the price of MCU products and upstream production capacity, but did not get a positive response. However, in response to investor research in August this year, Zhongying Electronics said that the main contacts (foundry) are Hejian, Huahong Hongli, and so on. At present, the capacity utilization rate of the wafer factory is high, taking into account the needs of the company's sustainable development. It is necessary for the company to actively plan to develop more capacity allocation.
Opportunities for domestic MCU manufacturers
Hangshun chip insiders believe that the MCU market is a stable market, but there is something wrong with the supply side, the chip factory has insufficient production capacity, and demand suddenly breaks out, resulting in an imbalance between supply and demand.
However, a reporter from Science and Technology Innovation Board Daily learned that due to the shortage of wafer production capacity, the products of large international MCU chip manufacturers have been postponed. Some people in the industry said that under the background of the continuous shortage of foreign MCU, many terminal manufacturers have chosen to use domestic MCU instead, which has brought opportunities to domestic manufacturers.
Zhaoyi Innovation has a deep feeling about this. In a survey conducted by institutional investors in October this year, Zhaoyi Innovation said that at present, the recognition and acceptance of the entire brand of the company's MCU products is very high, coupled with the shortage of large international manufacturers, more and more domestic manufacturers are importing the company's MCU products. Zhaoyi Innovation revealed that the revenue generated by the company's MCU in the third quarter has exceeded the performance of the whole of last year.
From the perspective of market prospects, IC insights data show that after the decline of MCU market size and shipments in 2016, MCU market size and shipments have increased significantly. The size of the MCU market grew 9.3% to $20.4 billion in 2019, and MCU shipments rose 11.7% to 34.2 billion in 2019, up from 30.6 billion in 2018. It is estimated that the market size of MCU will reach US $23.9 billion and the shipment volume will reach 43.8 billion units by 2022.
In terms of market pattern, according to Ihs data, the top 10 manufacturers in the global MCU market in 2018 are all foreign-funded, and the top 10 manufacturers occupy more than 80% of the global MCU market. Liu Jiping, founder of Hangshun chip, said when he was surveyed by a securities firm last year that there are many companies that do general MCU chips in China, but the market is just beginning, and its market share in the world is negligible.
In addition, from the technical route, according to the bus width, MCU can be divided into 4-bit, 8-bit, 16-bit, 32-bit and 64-bit. Liu Jiping said that with the market demand for low power consumption, low cost and bringing more resources, the market is forcing the MCU to develop from 8-bit to 32-bit. "in the future, the low-and middle-end 32-bit MCU will be close to the high-end 8-bit MCU, or even cheaper than 8-bit and 16-bit MCU, and the performance will be better."
At present, the first echelon of MCU enterprises in China are mainly Zhaoyi Innovation and Zhongying Electronics, in which Zhaoyi Innovation is located in the middle and high-end MCU market, and the related process is directed to 40nm. In the domestic Cortex 32-bit MCU market, the company's market share is 9.4%, ranking third. Zhongying Electronics previously ploughed 8-bit MCU, is China's largest local MCU manufacturers, expanding MCU downstream applications first focus on the distribution of home appliance market, in addition, Zhongying Electronics also has 32-bit MCU products.
In addition, listed companies with domestic business covering MCU business also include Beijing Junzheng, Dongsoft Carrier, Shanghai Beiling, Dahua shares and other companies, while unlisted companies include Hangshun Chip, Fudan Micro and so on.
Liu Jiping said that (the market is very large) is like pulling out a few hairs on a cow, domestic MCU companies can do a good job. "everyone should have their own market or technical expertise to grab some foreign market share."
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