On February 25th, Lu Weibing, president of Xiaomi China, officially launched the Redmi K40 series. As soon as Lu Weibing took the stage, he talked about the issue of "out of stock" and said that the supply of chips in 2021 was very tight, so there was no guarantee that there would be "no shortage". The day before yesterday, his post was even more worried about the lack of a "core" this year: "it is not a shortage, but an extreme shortage."
It is worth noting that the K40 series is relatively rare with a "double flagship" configuration, the K40 uses the new Snapdragon 870 flagship processor, and the K40 Pro and K40 Pro+ are equipped with the latest Snapdragon 888 flagship processor. What is unusual is that not only a number of mobile phone manufacturers have adopted a "double flagship" configuration in their recent new products.
A rare scene in the mobile phone market has led to a "lack of core" that has spread to the whole industry chain.
Snapdragon 888 "shortage" Xiaomi pushed up the flagship of the generation.
Redmi is not alone in adopting the double flagship configuration. The OPPO Find X3 series, which will be released in early March, according to existing sources, also uses the double flagship configuration. The OPPO Find X3 will be equipped with the Qualcomm Snapdragon 870 processor, while the OPPO Find X3 Pro/Pro+ will be equipped with the Snapdragon 888 processor.
Coincidentally, realme also announced at the MWC Shanghai official that the new flagship to be released will adopt the "dual platform + double flagship" strategy.
Industry insiders said that the main reason behind many mainstream manufacturers adopting similar market strategies is that the "shortage" of Snapdragon 888 has affected a number of mobile phone manufacturers, with Xiaomi 11, the first Snapdragon 888, bearing the brunt.
"Science and Technology Innovation Board Daily" reporter noticed that whether it is Xiaomi official website or JD.com self-operating platform, Xiaomi is out of stock, purchase needs to make an appointment.
"our lowest price was 3940 yuan a year ago, but it has increased by one or two hundred yuan after that." A millet dealer told Science and Technology Innovation Board Daily that due to tight supply, the price of Xiaomi 11 rose: "yesterday it was 4110 yuan, today's price has become 4140 yuan."
At present, Xiaomi's flagship product Xiaomi 10 is recommended on the home screen of Xiaomi's official website.
"this is not inventory clearance, consumers get products are recent production. Due to the insufficient supply of Xiaomi 11, Xiaomi 10 was launched in February. " A person familiar with the matter revealed to Science and Technology Innovation Board Daily.
Science and Technology Innovation Board Daily also learned that the monthly sales of Xiaomi 10 JD.com have exceeded Xiaomi 11, the former has reached 111500, while Xiaomi 11 currently has only 87600.
The shortage of technology and yield aggravates the shortage.
"Snapdragon 888, as the most flagship soc product at present, should be in short supply at the initial stage of listing. The vast majority of mobile phone brands launch flagship phones using this flagship platform, and the distribution of goods is actually limited." A person close to the leading ODM company told M "Science and Technology Innovation Board Daily" that this year is a special situation. "the fab has insufficient production capacity. At present, both 8 inches and 12 inches are under global tension, and the entire CPU has been in short supply before the third quarter."
Snapdragon 888 is manufactured exclusively by Samsung. Prior to this, the issue of power consumption and heating of Snapdragon 888 has also caused market controversy. People close to Qualcomm told Science and Technology Innovation Board Daily that relevant mobile phone manufacturers are actively optimizing fever and other related issues.
Jiabang consulting analyst Yao Jiayang to the "Science and Technology Innovation Board Daily" reporter analysis that the shortage of Snapdragon 888 may also be due to the lack of product craftsmanship and yield.
Samsung 5nm production capacity, in addition to Snapdragon 888, its own Exynos2100 and 1080 two chips also occupy part of the production capacity. In the case that the yield of Samsung 5nm is not high enough, production capacity is likely to be tight, resulting in tight shipments of Snapdragon 888. "
Qualcomm may be concerned about Samsung's yield, so it launched the Snapdragon 870 processor. " Yao Jiayang explained that in accordance with Qualcomm's previous pace, eight series of processors are released every December and upgraded in July of the following year. "according to tradition, the 888+ version should be released after the 888 processor, but less than two months after the release of Qualcomm Snapdragon 888, the release of the Snapdragon 870 processor and an early order with TSMC is likely to be a response."
Qualcomm will choose Samsung, which has a lot to do with Apple. Apple has snatched most of TSMC's 5 nm production capacity, but Qualcomm doesn't have much choice. " Yao Jiayang further added that this year is an important growth period for 5G, after Huawei's overseas market is blocked, Apple is actively grabbing market share, basically Qualcomm "to capacity" is a bit difficult.
Out of stock, rising prices, competitive capacity
The market fluctuation caused by the tight demand of Snapdragon 888 is only the tip of the iceberg. Shen Yiren, former vice president of OPPO and president of global marketing, said publicly, "this year, due to various reasons such as the upstream supply chain, not only cars lack chips but also mobile phones lack chips, and prices of various electronic components such as memory panels will also rise accordingly."
More exaggerated appears in the upstream industrial chain "grab goods".
Huang Chongren, founder of Taiwan's Lijing Group, said in an interview with the media not long ago: "I knew there would be a shortage of materials three months ago. I had to take calls from many bosses every day to have production capacity. It was said that thousands of tablets were needed before, and then they turned into hundreds. Last week, they began to turn into dozens of tablets. It can be expected that even dozens of pieces of production capacity have to be robbed, and the shortage of goods is a sign of the shortage."
According to a report released by Gartner, total revenue in the wafer foundry market is expected to grow 13.7% from 2019 to $70.8 billion in 2020. The wafer foundry market is expected to grow at a compound rate of 4.9% in 2018-2023.
In fact, with the saturation of the global smartphone market, overall sales are on a downward trend, "but the wafer foundry market is growing significantly because the consumption of semiconductor parts for 5G mobile phones is significantly higher than that of 4G mobile phones, and the superimposed consumer electronics market is larger." AVIC Securities analyzed in the relevant research report.
"the number of power management chips in 5G mobile phones alone is 2 to 3 times more than that in 4G mobile phones, and the number of power management chips alone has increased several times, filling up 8 inches of production capacity, such as United Power, the world's advanced technology, and so on." When talking about the shortage of production capacity, Huang Chongren said that apart from the insufficient expansion of production, the more important reason is the need to surge. "in the 4G era, there is a maximum of 500 million information flows, while 5G has as many as 60 billion information flows, so there are as many as 60 billion devices, all of which require all kinds of IC, memory, and so on."
"this wave of shortages is much higher than expected." Huang Chongren sighed: "it is already very difficult to meet the needs of 5G and AI, not to mention automotive chips." "Today, every manufacturer is willing to accept price increases, and bidding for capacity has become a phenomenon."
"Last year's epidemic led to a shutdown, a backlog of demand and insufficient supply, which created follow-up pressure." An insider from the chip manufacturer told Science and Technology Innovation Board Daily that many chip manufacturers, such as Renesas NXP, are raising prices one after another. "there is still a little helplessness behind this, because many wafer production lines are full of consumer electronics."
The above-mentioned people said that the tide of core shortage could only be alleviated in the second half of the year.
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