This kind of chip "the most short of Q3 at present" or the closed test link of rising price again has been the first to benefit.

The footsteps of the MCU factory to raise prices again are approaching. The price of microcontroller (MCU) has risen again due to the closure measures in Malaysia, according to the Taiwan Industrial and Commercial Times. Industry insiders pointed out that after the IDM factory took the lead in shouting higher, MCU factories such as Yilong, Songhan, Wangkang and Jiuqi are expected to follow up in the third quarter, with the increase falling at double-digit levels.

IDM, a big maker of Italian semiconductors, has raised its offer across the board on June 1st.

Earlier, supply chain sources pointed out that due to the widening gap between supply and demand of MCU and rising production costs, it was reported that the large group of MCU manufacturers would increase their products by another 10 to 15 per cent from August to reflect the rise in production costs. Xintang, Songhan and other MCU factories also intend to follow up.

Both supply and demand factors promote a new wave of MCU price rise

The shortage of wafer production capacity is the main reason for the new wave of MCU price increases.

MCU adopts 28nm mature process. However, at present, the supply of new equipment for mature process is small, and there is not much new capacity in the market in the past few years, so the supply of mature process capacity becomes tight.

From the point of view of demand, the downstream demand of MCU is diversified, and automobile is the first major application field of MCU in the world. Last year, the Q1-Q2 epidemic affected global car sales, but in the second half of 2020, the recovery of the automobile industry greatly exceeded the expectations of the whole car factory. The emergency stock preparation of the whole vehicle factory led to insufficient response from the upstream MCU manufacturers, and then the shortage of MCU gradually spread from cars to industrial control, consumption and other fields.

A senior executive of a chip design company revealed in May that what is most lacking in semiconductor chips is MCU,. With the deployment and improvement of wafer production capacity, the production of power management chips and driver chips has been alleviated, while the structure of MCU is more complex, and there are fewer wafer factories that can produce, so the shortage is more serious.

According to a report by China Merchants Securities analyst Yan Fan on July 7, the imbalance between supply and demand of MCU will last at least until the end of 2021, and the shortage will be alleviated only with the gradual release of new MCU capacity in 2022.

MCU continues to prosper and the closed test link is the first to benefit.

In addition to the demand for automotive chips, the demand for the Internet of things will also contribute to the continued prosperity of the MCU market. According to GSMA, there will be 25.2 billion connected devices globally by 2025, and the CAGR will be 16% in 18-25 years. MCU is the core component of the Internet of things, and its value accounts for 35% of the terminal module of the Internet of things.

The prosperity of the MCU industry is high, and the closed test link has been the first to benefit. According to the industry chain news, the current MCU packaging capacity is tight, the minimum order quantity from the beginning of the year to the near future, increased fivefold. From the Q3 overall closed test quotation, the MCU package rose the most, by 15%, and the test also rose 15% by Synchronize. By comparison, driving IC encapsulation increases by a single-digit percentage, and memory encapsulation requirements are also highly visible.

China's MCU market is currently about 25-30 billion yuan, with more than 100 local manufacturers, but the combined market share is less than 15%, and most manufacturers are concentrated in the consumer market, industrial control and automobiles have yet to be expanded. Compared with overseas manufacturers, domestic MCU still has a large gap in product quantity and ecological construction, but it has unique advantages in performance-to-price ratio, delivery cycle and customer service.

Yan Fan, an analyst at China Merchants Securities, said that multi-level supplier models such as ST and NXP have led to extended delivery cycles and skyrocketing prices of their MCU products since 20Q3, and domestic customers have switched the MCU platform to domestic manufacturers in order to ensure the security of the supply chain. The increase in the number of customers will help domestic MCU manufacturers to develop more product lines and build a better ecological environment, and accelerate the process of MCU localization.

Among the listed A-share companies, Zhaoyi innovative vehicle gauge-level MCU is expected to be popular in the near future and mass production by the end of the year; Zhongying Electronics has opened the market with customized MCU in the field of home appliances and gradually expanded to various industrial and consumer scenarios. Lexin Technology is the world's leading Wi-FiMCU supplier of the Internet of things, ranking first in the industry for four consecutive years. Xinhai Technology is one of the few domestic enterprises that master ADC+MCU full signal chain technology, and has cooperation with Huawei, vivo, Xiaomi, Meizu, Xiangshan weighing instrument, Le Xin Medical and so on.

Sealing test end, MCU is currently mostly used in wire packaging, closed test leader Riyueguang has abundant wire packaging capacity, Huanxu Electronics is its subsidiary; China porcelain Electronics Automotive Electronics related products can be used in MCU packaging.