More Fun with Data – Semis in Cars
Shortages in the semiconductor space have hit car manufacturers quite hard, as foundries must allocate processes above 40nm to their highest volume customers. While TSM (TSM) and UMC (UMC) get much coverage in the trade press, the automotive space has a number of companies with their own foundries that are focused on producing automotive ICs and controllers. TSM and UMC do get much of the 40nm and smaller node business, but ~98% of the global automotive micro-controller business, which makes up ~30% of the total automotive semiconductor market, is controlled by just 7 companies, add another 5 companies and that covers almost 80% of the total automotive semiconductor market.
Most interesting however is the difference between semiconductor BOM in fossil fuel vs. ‘new energy’ vehicles. Fuel-based vehicles average ~$350 in semiconductor components, with $118 of that in power related devices, or 33.7%, while non-fuel based vehicles average ~$705 in semiconductor components, with $387 of that related to power management, or 55.0%. So not only do ‘new energy’ vehicles have a higher overall semiconductor component count, but also a much higher semiconductor BOM, roughly double traditional fuel vehicles.
Early last year automotive brands and OEMs reduced their forecasts based on the early stage of the COVID-19 pandemic. Foundries shifted production to higher margin, high volume customers, locking in much foundry capacity for the first half of last year. When automotive buyers began to see a bit of a recovery in demand, foundries were unable (more like unwilling) to shift production back to automotive customers, having a multitude of orders from high volume customers that were willing to pay a premium to avoid extended lead times.
This left automotive foundry customers, particularly MCU (Micro-controllers) customers, to lead times that pushed mid-year orders into late 3Q or early 4Q for large customers and smaller customers vying against telecom (5G) and IT product production (drivers and TCONs) on 8” lines. As competition for limited foundry capacity continued, automotive customers remained behind the manufacturing curve, leading to what is expected to be a 1m car shortfall in 1Q, a result of automotive semiconductor component shortages. Given that demand across the semiconductor space continues to outstrip capacity, such shortfalls are expected to continue in 2Q, and a power outage at TSM’s plant in Nanke, Taiwan yesterday, puts another 30,000 wafers at risk, and while TSM’s loss will be covered by insurance, a portion of those wafers are expected to be scrapped tightening the automotive semiconductor space just a bit more..
Most interesting however is the difference between semiconductor BOM in fossil fuel vs. ‘new energy’ vehicles. Fuel-based vehicles average ~$350 in semiconductor components, with $118 of that in power related devices, or 33.7%, while non-fuel based vehicles average ~$705 in semiconductor components, with $387 of that related to power management, or 55.0%. So not only do ‘new energy’ vehicles have a higher overall semiconductor component count, but also a much higher semiconductor BOM, roughly double traditional fuel vehicles.
Early last year automotive brands and OEMs reduced their forecasts based on the early stage of the COVID-19 pandemic. Foundries shifted production to higher margin, high volume customers, locking in much foundry capacity for the first half of last year. When automotive buyers began to see a bit of a recovery in demand, foundries were unable (more like unwilling) to shift production back to automotive customers, having a multitude of orders from high volume customers that were willing to pay a premium to avoid extended lead times.
This left automotive foundry customers, particularly MCU (Micro-controllers) customers, to lead times that pushed mid-year orders into late 3Q or early 4Q for large customers and smaller customers vying against telecom (5G) and IT product production (drivers and TCONs) on 8” lines. As competition for limited foundry capacity continued, automotive customers remained behind the manufacturing curve, leading to what is expected to be a 1m car shortfall in 1Q, a result of automotive semiconductor component shortages. Given that demand across the semiconductor space continues to outstrip capacity, such shortfalls are expected to continue in 2Q, and a power outage at TSM’s plant in Nanke, Taiwan yesterday, puts another 30,000 wafers at risk, and while TSM’s loss will be covered by insurance, a portion of those wafers are expected to be scrapped tightening the automotive semiconductor space just a bit more..
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