Nice read
@ToughCoyote：why is there a shortage of automotive chips? Since the beginning of 2021, the global automotive industry$NIO Inc.(NIO)$ $XPeng Inc.(XPEV)$ $Tesla Motors(TSLA)$ $Li Auto(LI)$ $Semiconductor Bull 3X Shares(SOXL)$ has begun to face chip supply shortages, but the situation is now improving. In early 2021, a variety of factors, including extreme weather, epidemics, and factory accidents, had a negative impact on chip inventories. The automotive chip shortage is mainly caused by the following three reasons: 1. Imbalance caused by mismatch of supply and demand: In 2020, due to the epidemic and other reasons, the global supply chain experienced shortages, forming the so-called "bullwhip effect". As uncertainties increase, companies have increased inventory to prepare for future demand fluctuations, which has led to a shortage of chips. Increased market demand for chips has further exacerbated the mismatch between supply and demand. 2. The automotive MCU chip market has high supplier concentration: Automotive control modules require a large number of MCU microcontrollers, and these chips need to be miniaturized and high-frequency, and the process needs to be below 40nm. In terms of advanced processes, chip manufacturers are usually divided into IDM models and foundry models. However, for chips below 28nm, they are mainly manufactured by TSMC and others. Insufficient production of leading suppliers such as TSMC has become a bottleneck. In particular, TSMC's relatively small share of the automotive chip business has caused its supply priority considerations to become a problem. 3. Insufficient coordination among suppliers: In the chip supply chain, insufficient coordination among various enterprises is also one of the problems, and there is a lack of sufficient flexibility. The government and car companies have begun to mediate, but there will still be supply pressure for a period of time. With the efforts of the government and industry, the management of global automotive chips will become more and more transparent, and the shortage problem will be alleviated. This also means that the supply chain management of automotive chips has slowly begun to move away from chip storage and towards reasonable inventory. This is also an inevitable process, and we will see this turning point back to normal in the first half of 2024! Of course, in China, we still face some differentiated problems. - With the increasing intelligence of automotive electronics, domain controllers have become a trend of central integration. The vehicle electronic architecture is iterating rapidly. Centralized controllers and previously distributed controllers have great demand for chips, which makes the chip specifications dramatic change. For example, Mobileye's chip series has been directly replaced by Horizon and other chips in China. - In fact, the replacement relationship between China's fuel vehicles and new energy vehicles is very direct, and some chips used in fuel vehicles are also being replaced. - Extreme cost requirements and unstable production forecasts have also caused great changes in component companies' demand for chips. Of course, from a positive perspective, for China's automotive chip companies, the replacement speed is accelerating and the replacement ratio is increasing. Summary: Changes in the inventory and use of automotive chips are actually forward indicators for the automotive industry. @TigerStars @Daily_Discussion @MillionaireTiger @Tiger_chat
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