How to track the shortage of chip supply chain? [agency Review]

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Main point of view

Since 2021Q3, the impact of insufficient supply-side transport capacity, chip shortage and other problems on the US economy has never been alleviated. In the "short-term" unsolved problem of US port congestion, which may last until the middle of next year-- issue 21 of the overseas biweekly newspaper, "We have combed the tracking system and prospects of US shipping capacity tension. This issue will continue to focus on the second core issue of supply shortage: chip shortage, chip problem itself is more professional." At the macro level, we try to provide traceable supply and demand data of the chip industry chain, so as to provide a basis for observing the progress of global industrial production recovery.

Taken together, the recent shortage of chip supply shows signs of marginal easing, such as the slowdown in chip demand growth, the rebound in automobile production, and the improvement of production bottlenecks caused by the epidemic in the main producing areas. However, given that chip demand and delivery time are still at an all-time peak, the impact of chip shortage on global industrial production will still exist.

1. Demand side: after the epidemic, the demand for chips has increased greatly, or has gradually peaked.

From the perspective of the relationship between the upstream and downstream of the industry chain, the upstream of the chip is semiconductor material, and the chip (integrated circuit) is the product in the middle of the semiconductor industry chain. the chip production process includes three main processes: design (representing enterprises such as Huawei and Qualcomm), manufacturing (representing enterprises such as TSMC and SMIC), and closed testing (representing enterprises such as Sunlight, Changdian Technology, etc.). The downstream application field of the chip can be divided into four parts: automobile, industry, communication and consumption.

After the epidemic, the demand for electronic products and cars surged, which led to a rapid increase in the demand for chips. Global semiconductor sales reached an all-time high of $48.79 billion in October, and the year-on-year growth rate of semiconductor sales since June has also reached the highest level since the financial crisis.

Sales of semiconductor manufacturing equipment can be used as a leading indicator of chip demand, which is still at a high level. The strong demand for chips has also boosted the demand for semiconductor manufacturing equipment. As the upstream product of the chip manufacturing industry, the sales of semiconductor manufacturing equipment can be used as a leading indicator of chip demand.

However, according to TPC's survey of electronics industry experts from more than 8800 regions around the world, chip demand may decline. At present, people in the industry expect a further decline in the growth rate of demand for 22Q1 chips, accounting for 59%.

2. Supply side: shortage of chip production process

On the one hand, there is a bottleneck in the supply of integrated circuits. In terms of delivery time, semiconductor delivery time has increased significantly since October 2020; from the inventory level, as of November this year, the inventory level of most chip products is still lower than normal, reflecting that the current chip supply is still tight.

Second, there is a structural shortage in chip supply. For example, affected by trade disputes, countries have begun to lay out high-end chips that can be controlled independently, squeezing out the input of middle and low-end chips, while at present, what is missing in "core deficiencies" such as automobiles is mainly this kind of chips in the middle and low-end mature process; upstream silicon wafer factories have a relatively long investment and construction cycle, unable to put into production quickly, and it is difficult to match the surge in demand for new capacity.

Third, the closed test of integrated circuits was interrupted by the impact of the epidemic in Southeast Asia, further affecting the supply of chips. The global IC closed test bases are mainly in China, South Korea, Japan, Southeast Asia and other places, of which Southeast Asia accounts for about 27% of the global share, while Malaysia's share can reach 13%. The Q3 outbreak in Southeast Asia has brought industrial production to a standstill in countries such as Malaysia, further hitting chip supplies, but the problem has improved as the epidemic has eased.

3. Downstream application: downstream automobile output may show signs of rising.

Global car production may be picking up since October. In view of the limited availability of chip supply and demand data, it can also be used as an index to observe the chip supply chain by tracking downstream usage. Due to the shortage of chips, global car production continues to decline, and employment in the US motor vehicle industry has not returned to pre-epidemic levels. However, it is optimistic that global car production rose in October, and the announced car production in Germany and Brazil continued to rise in November, and global car production seems to be picking up.

Risk Tip: chip supply chain recovery exceeds expectations