The market demand is increasing, but the problem of chip production capacity has not been alleviated for a long time, and the price of chips has continued to rise again. Recently, various factories have raised their quotations again by up to 15%. At the same time, downstream packaging and testing plants ASE Investment Control, KYEC and other companies have also increased their demand for packaging and testing due to the massive output of chips, and their production capacity has also been tight. They have also conveyed their intention to increase prices.

Manufacturers have no choice but to increase prices

Under the condition that the supply of semiconductor is tight and the related products are out of stock, the imbalance of supply and demand in semiconductor market is especially obvious, which gradually leads to "domino effect ". From wafer price to material price, to PCB( printed circuit board) price, sealed price, and finally to chip price. Industry chain upstream materials, wafers, sealing and other links caused by chip price rise tide is gradually spreading throughout the industry.

Starting from the fourth quarter of 2020, price increases in the semiconductor field have continued, and news about the tight production capacity of chip foundries in 8-inch wafer fabs is endless. At the end of 2020, the shortage of production capacity has extended to 12-inch wafers. Due to the tight wafer production capacity and strong market demand, many manufacturers have increased the quotations of chip foundry products, and chip price have also become a forced move by major manufacturers.

At the beginning of 2021, not only did the chip price surge show no signs of fading, but it has become more and more intense. According to incomplete statistics, since 2021, up to now, there have been more than 40 semiconductor manufacturers that have raised or are about to raise prices.

Beginning in January 2021, many chip companies have increased the ex-factory prices of their products, with a general increase in the range of 10% to 15%. Some research institutions predict that in 2021, the average price increase of all chip products will exceed 20%, and the prices of some products will even directly double.

Reasons for price increase

Some people think that this round of chip price increase is different from before. In the past, the supply of some chip products was insufficient in the short-term due to the “roasted seeds” and “hoarding” of several categories, which led to price increases, but they were soon able to recover. The price increase this time seems to be even more violent. Not only are several categories out of stock, but the entire line of products such as MCU, GPU, display driver, TWS headset SoC, power IC, etc. are out of stock, which ultimately leads to the entire industry chain. The phenomenon of price increases.

According to BIZBEE analysis, at this stage, the "hardest-hit area" for chip price increases involves multiple fields, among which data centers, network communications, mobile phones, personal computers, and automobiles are all facing the pressure of chip price increases.

As far as terminal chips are concerned, industry experts generally believe that in the early stage of the COVID-19 epidemic, the industry's internal judgments about the future market trend are relatively conservative, and terminal manufacturers are cautious about stocking. However, due to factors such as epidemic prevention and control and home isolation policies, the digitalization process has accelerated significantly. The "home economy" spawned by the COVID-19 epidemic has gradually made home office, distance education, and home entertainment a trend. Therefore, chip products related to these fields Prices have risen accordingly, especially chip products in the fields of mobile phones and personal computers.

In addition to huge market demand, the price increase of terminal chip products has a certain relationship with chip production capacity and market atmosphere. As the epidemic is raging abroad, the production capacity of foreign FAB will naturally be affected. In addition, there has been a panic stocking situation in the industry. Everyone is desperately hoarding stocks, which has aggravated the tension between supply and demand, and finally led to the price increase of chip products.

Price trend forecast

So far, the current round of chip price hikes is still ongoing, which may have some conduction effects in the industry. BIZBEE found that the conduction effect of chip price increases has already appeared. Specifically, the chip price increase has mainly increased the production cost of terminal electronics, and that the chip price increase has begun, and it is expected that there will be no price decline before the third quarter of this year.

But BIZBEE predicts that in the fourth quarter of 2021, market demand for chips will fall. This is because since the second quarter of 2020, manufacturers in the industry are over-stocking, and market demand is not enough to support such a large stocking share and continuous stocking behavior, so market demand will gradually fall from high points, and then help the market. The supply-demand relationship of the chip has reached a balance, thereby promoting the normalization of chip product prices.

In the future, in the development process of mobile phone parts products, BIZBEE recommends that while actively facing the global development situation, you should also keep up with the pace of BIZBEE and make corresponding stocking plans in advance, so as to stock up more rationally to avoid losses.