The global semiconductor industry has been hit hard by the new coronavirus outbreak: not only factory production, but also local transportation has been hampered by the outbreak, leading to delays in existing production and sales plans by many manufacturers. On the other hand, the tension caused by the outbreak and the reduced frequency of outings have led to a decline in consumer demand.
Originaltitle: Semiconductor industry under the outbreak: production increase and sales plans face delays, both sides of supply and demand hit
Source: Interface News
Journalists . . . Peng Xin
Edited . . . Song Jianan
The semiconductor industry chain is long and the upstream and downstream relationships are complex. Upstream includes equipment, materials and other supply ends, midstream covers the design, manufacturing and sealing links, downstream will be used in automotive, consumer electronics and other fields. In the current epidemic environment, the impact on different levels of the chip industry varies.
Due to the highly automated nature of the wafer foundry, the supply side as a whole is less affected by the outbreak. According to the major fab announcements, such as the domestic wafer foundry leader SMIC during the Spring Festival operation is normal, TSMC plant internal operations have not been interrupted. Huahong Semiconductor, Changjiang Storage and other companies also said that its production and operation is normal, no shutdown phenomenon,
According to industry analysis, the current supply chain is the most affected by the package testing link, may become a bottleneck in the industrial chain. The so-called semiconductor package test refers to the process of processing the wafer stoist to obtain a separate chip according to the product model and functional requirements. Since each chip needs to be 100% tested to meet the use of the final electronics, the importance is self-evident.
During the Spring Festival holiday, the sealing plant usually has a holiday and is in a state of shutdown. After the outbreak, many employees who should have returned to production could not return to work smoothly, and the problem of re-employment was complicated, causing the testing plant to encounter capacity problems.
According to industry media semiconductor industry observation reports, the current domestic sealing plant capacity is only under normal circumstances about 50%. Several inspection plants have begun to experience a shortage of operators. Conservatively expects the impact of the outbreak to be more than a month. However, today, the situation is still optimistic, the main sealing enterpriselong power technology and Tongfu micro has been on time to resume work, in order to reduce wafer inventory, to protect the supply chain.
Wuhan is an important industrial gathering city of the domestic semiconductor industry, and the production situation of Wuhan semiconductor enterprises at the center of the epidemic has been widely concerned.
At present, Wuhan’s major semiconductor manufacturers have Changjiang Storage, Wuhan Hongxin and Wuhan New Core, if the related outbreak expands, may affect the follow-up production of enterprises.
According to the feedback from market analysts, Changjiang Storage is facing the challenge of capacity climbing, with capacity expected to reach 50,000 to 100,000 pieces per month by the end of 2020. Due to the return of Hubei employees and the withdrawal of overseas Chinese in Many Countries, the company’s capacity release may be delayed. At present, the company is actively responding to the outbreak, according to the Changjiang Storage on January 30, the official announcement, the company will ensure safety under the premise of ensuring the continuity of production, to minimize the impact.
China Merchants Bank Research Institute believes that, given the current small share of The Cheung Kong storage’s global memory capacity, the impact on the semiconductor industry is limited. If the production line has been complete fab, or some in the near future need to purchase equipment fab (such as Wuhan Hongxin), the impact will be relatively large, because the relevant technical personnel difficult to go to the site to support, some key operations can not be completed.
Wuhan Xinxin’s fab sits on the ic design company’s Mega-easy innovative NOR flash memory chip. Megainnovation has the 3rd largest market share in the NOR market, accounting for about 18%, and the outbreak may have an impact on The Production of Mega Innovation.
At present, chip design enterprises are the least affected. Due to the chip design company’s light asset attributes and remote working conditions, the outbreak is expected to be limited. Of course, efficiency will be affected.
In 2019, the semiconductor industry is in recession due to the tense global trade environment, the industry entering a cyclical downward trajectory, and the imbalance between the supply and demand of memory chips. Global semiconductor industry revenue was $412.1 billion in 2019, down 12.1 percent from a year earlier, the biggest drop since 2001, according to the Global Semiconductor Association (SIA).
The market had expected the semiconductor industry to return to growth as 5G demand grew and trade conditions eased, but the outbreak added to global semiconductor sales growth in 2020. Global smartphone shipments will be 2 percent lower than expected in 2020 and 5 percent lower than expected in China, with China’s smartphone market expected to fall by more than 30 percent in the first quarter, according to Strategy Analytics.
Chip design companies such as Qualcomm and MediaTek have cut their guidance for the first quarter of 2020. Since both companies are important suppliers of mobile phone chips, the downward revision of the guidance undoubtedly means that the first quarter of the mobile phone market is not optimistic.
“Consumers may be more cautious about being exposed to viruses in public places. Many businesses may turn to online sales, which can pose a challenge to logistics networks. A report released by Koray Kose, senior research director at Gartner, states. However, the market generally believes that the impact of the outbreak is only caused by the delay in demand, this year there are 5G and Tokyo Olympic Games and other demand support.