Renesas plans to increase the production capacity of on-board MCU by more than 50% to help alleviate the shortage of automobile core.

On September 29th, Japanese semiconductor manufacturer Renesa Electronics revealed at the business briefing that it plans to increase vehicle MCU production capacity by more than 50% by 2023 (compared with 2021). At the same time, it will increase the amount of equipment investment, which is expected to exceed 80 billion yen by 2021 and about 60 billion yen by 2022. The company's current equipment investment is about 20 billion yen. This further confirms Renesas's previous plans to expand production, and in early September, the company said it would invest boldly to increase production capacity over the next three years.

Renesas is the world leader in automotive specification-grade semiconductors and holds 20% of the global share in the field of automotive MCU. According to the Market share report of Automotive Semiconductor Manufacturers 2020 released by Strategy Analytics, the global suppliers of Top 5 automotive semiconductors are Infineon, NXP, Renesas, Texas Instruments and Italian Semiconductor.

At present, the problem of lack of automobile core will continue to exist, and the news of automobile production reduction occurs frequently. According to the latest data from Auto Forecast Solutions (AFS), due to the aggravation of global "core shortage", global car production has been reduced by a total of 6.887 million vehicles as of August 29. At the same time, AFS predicts that global car production will be reduced by 8.107 million in 2021.

Specifically, North America is expected to reduce production by 2.465 million vehicles; Europe is expected to reduce production by 2.293 million; China is expected to reduce production by 1.666 million; other Asian countries are expected to reduce production by 1.336 million; South America is expected to reduce production by 285000; and the Middle East and Africa are expected to reduce production by 62000. According to AFS, global production will still be cut by 1.219 million vehicles in the next four months.

Against this background, other major automotive chip manufacturers besides Renesas have also announced production expansion. In September alone, news came from the automotive chip field that the Infineon 12-inch power semiconductor chip factory was officially launched, and the grid core spent 6 billion US dollars to expand production, with the goal of at least doubling the output of automotive chips this year.

In addition to the established car-grade chipmakers, Intel has also regarded automotive chips as a key strategic priority, and the company expects chips to account for 20 per cent of car costs by 2030, and chip factories and car companies depend on each other.

Xie Heng, an analyst at Societe Generale Securities, said in a research report released on September 21 that at this point, the future demand for cars at the specification level will be a sustained and strong momentum for the chip industry, and will continue to be optimistic about the power, simulation and other chip demand increments brought about by the electrification of automobiles. superimposed on the rise of China's local supply chain, core leaders such as Wentai Technology, Shengbang shares, Shrippo and Silanwei have benefited deeply.

Recently, the domestic crackdown on automotive chip dealers to bid up prices is also conducive to the long-term development of the industry. Mao Zheng, an analyst at New Times Securities, said that the investigation of relevant distribution companies by the General Administration of Market Supervision will eliminate the upstream and downstream, making the channels more smooth. It is expected that in the future, under market control, the price of automotive chips is expected to stabilize, the intermediate links will be reduced, the upstream and downstream supply chains will be improved, and the increase in the output of automotive chips in the future will reduce the burden on the long-term development of the industry, which will contribute to the healthy development of the industry