Core shortage crisis continues to spread: another big car company is affected and these companies are expected to benefit

Affected by the shortage of chips, Great Wall Motor has encountered capacity bottlenecks, and the two major production bases will face shutdown. The agency said that the shortage of automotive chips will promote auto parts manufacturers to pay attention to auto chip-related investment and supporting production capacity, and suggest that they pay attention to the relevant industrial chain to benefit from the target.

A reporter from the Financial Associated Press learned from relevant people close to Great Wall that due to the shortage of chips, Great Wall encountered production bottlenecks. In May and June, the two major production bases in Yongchuan and Xushui in Chongqing were faced with production stoppage, affecting many popular models, including the Harvard H6, Great Wall Gun, Tank 300, and so on.

Affected by the supply of upstream automotive chips, recently, a number of domestic and foreign vehicle manufacturers, including Nissan, Ford, FAW-Volkswagen Audi and so on, have started to stop production to varying degrees.

Hu Guodong, a researcher at China Merchants Bank, said that according to industry information, most vehicles and parts were stopped because of a shortage of MCU. However, the shortage of MCU has something to do with the rising prices caused by the shortage of upstream wafers.

Upstream wafer foundry price increases many MCU manufacturers suspend orders

A number of large manufacturers of MCU (micro-control units) suspend receiving orders. Following the suspension of orders by Taiwan's Yilong Electronics in late February, Shengqun Semiconductor recently issued a notice suspending orders for 2022. Shengqun Semiconductor said that the suspension of orders is due to the wafer and packaging factory informed that there will be another wave of price increases in the near future, a price increase of 15% and 30%.

In addition, (UMC), a major contract manufacturer of chips, is currently negotiating a contract for next year and plans to raise prices by another 40 per cent next year, according to IC design company. It has been reported that the price of Lianhua electronic semiconductors increased by 10% in April.

The superficial reason is that the short-term supply falls short of demand. In fact, the automobile companies attach importance to and lack of understanding of chips.

The superficial reason for the recent shortage of automotive chips is that short-term supply exceeds demand, but the real reason is that automobile companies pay attention to and lack of understanding of chips. Chen Mengjie of Yue Kai Securities pointed out that MCU chips are cheap and car companies mainly adopt outsourcing mode. The lack of understanding of the chip manufacturers, underestimated the order cycle, resulting in the car shortage crisis.

The shortage of automotive chips will promote auto parts manufacturers to pay attention to automotive chip-related investment and supporting production capacity.

In the short term, the shortage of automotive chips continues, the price of the semiconductor industry chain increases, and pay attention to the benefits of the related industry chain.

Chen Mengjie of Yuekai Securities said that automotive chip-related targets (Weier shares, Ziguang Guowei, Shilan Weiwei, Yangjie Technology, etc.) and semiconductor wafer equipment manufacturers (North Huachuang, China Micro, etc.) are expected to benefit.