Multiple Problems Of Semiconductor Supply Chain: The Demand For Logistics Is Declining, And Output Value Is Expected To Drop By 7.34% In 2020.

The semiconductor industry, which has been gaining high profits all over the world, has also been affected by the global spread of the new crown epidemic, especially the fluctuation of semiconductor consumption, such as sales of electronic products such as mobile phones and televisions, and the negative effects are being transmitted to the upstream.

Xu Shaofu, an analyst at Ji Bang consulting, told the twenty-first Century economic news reporter: "the epidemic affects the world's three largest economies and important manufacturing areas, which has a great impact on the supply and demand of the market. Consumer electronics is the most serious factor affecting demand market, causing a consensus among some semiconductor operators on their earnings forecasts. The recovery process of future market demand is uncertain, and the difficulty of semiconductor industry to cope with the change of market demand has been increased. From the supply side, the semiconductor industry is faced with problems such as the shortage of manpower and the reduction of material transportation efficiency due to the epidemic. "

At the same time, the core research report also pointed out that the drop in demand side will lead to a drop of 7.34% to 391 billion 300 million US dollars in global semiconductor output in 2020.

Terminal demand slipped

The sudden outbreak of the black swan has shocked the growth of the global economy, and has also affected consumer confidence. At least for the first half of this year, sales of terminal electronics are expected to decline sharply, and demand side weakness is now a serious challenge for the upstream industry.

Taking the mobile phone industry as an example, apple recently announced that it would cancel the spring new product conference held at the end of March, and turn it into the form of online conference. It will close all retail outlets outside the Greater China region by March 27th. At the same time, China Mobile OV and other domestic mobile phone companies have also turned to online conferences. China's mobile phone shipments data released in February 2020 showed that shipments were 6 million 384 thousand, down 56% from the same period last year. According to Strategy Analytics, the overall sales volume of the European market will drop more than 20% year-on-year.

Semiconductor companies, which are closely related to consumer electronics such as mobile phones, are also affected. For example, IC design company, according to the latest statistics of the Research Institute of Tubo consulting, the top three IC designers in the world in 2019 were Broadcom, Qualcomm and invidia. From the data, in the middle of 2019, three leading companies' revenues declined, and in 2020, they also had to face the new impact brought by the epidemic.

Yao Jiayang, an analyst at Ji Bang consulting, told the twenty-first Century economic news reporter: "the epidemic situation in Europe and the United States will be a big blow to its physical consumption, which will directly affect the consumption intensity of consumer electronic products. With the fact that the US Department of Commerce's entity list policy has not been lifted, most of the US designers will continue to be affected. For IC designers, it will be the most important business issue in 2020.

Affected by the new crown pneumonia epidemic, Broadcom recently withdrew its 2020 fiscal year performance forecast, the company expected 2020 fiscal year revenue of $25 billion, an increase of 11% over the same period. It is understood that Hocta (Hock Tan), chief executive of Broadcom, said that the epidemic had not affected any supply chain, but the demand had indeed slowed down, and the epidemic brought high uncertainty.

The report pointed out that although Qualcomm is expected to return to Apple's mobile phone supply chain in 2020, the global epidemic can not be effectively controlled, and it is expected to impact Apple's sales performance. When Qualcomm's chip sales will be affected. NVIDIA also confirmed the impact of the epidemic on the first quarter of 2021. In the first half of 2020, when the performance has been affected, it may not be very optimistic that the whole industry will grow back in 2020.

In addition to the design enterprise, the foundry industry is also affected by the variables of demand side. For example, Apple has reduced the amount of AirPods chips for TSMC in recent days. But TSMC expects strong demand for advanced technology processes such as 7Nm and 5nm, and is confident that this year's operation is better than industrial average.

Xu Shaofu said that consumption market demand is not easy to rebound in the short term, so the impact of semiconductor industry on consumer products revenue is fierce. While in the non consumer demand sector, the development of key industries such as 5G and AI has been slightly slowed down by the poor recovery rate of domestic manufacturing industry, but the infrastructure demand related to medium and long term industrial development has not been damaged, or has become a field for semiconductor operators to avoid industrial adverse wind shocks; on the other hand, the "home" economy and factory automation generated by the epidemic will provide new demands for the semiconductor industry. The increased opportunity may compensate for the loss of consumer demand.

Multiple pressures in supply chain

In addition to the challenge of demand side, the semiconductor supply chain is also affected by many factors, such as the disruption of talent flow caused by the epidemic, the short transportation of goods, and the changes of external environment such as Sino US trade.

From the semiconductor manufacturing process, from chip design, production to sealing test, all affected by the epidemic. Before the outbreak of the epidemic in China, the industry pointed out that the seal test link was the most affected, because the factory needed the most manpower and the most densely packed personnel. Now that the domestic epidemic is improving, companies are accelerating their return to work. However, the epidemic situation in Japan, Korea and Europe has been escalated from manpower to logistics.

Xu Shaofu said that although the supply situation of the sealing industry has been gradually restored, the first quarter revenue decline is inevitable, and is expected to continue to the second quarter. As for the production and design end, because of the high degree of automation, it has little impact on the initial stage. The design industry adopts remote office mode, while the wafer manufacturers allocate resources to maintain wafer production.

However, at present, the major areas of wafer fabrication, including China, Taiwan, South Korea, Europe and the United States, have been affected by the spread of the epidemic. Although the production is stable, some preventive measures will affect the production efficiency and progress, such as the entry and exit restrictions of various countries and the grouping of production line personnel.

An employee of a semiconductor giant Shanghai told the twenty-first Century economic report: "at present, the daily work has not been much affected, but the supply chain has problems, and the follow-up needs to be solved. Because there are Korean suppliers, now there is a risk that raw materials can not arrive on time, and other suppliers can only be considered. In raw materials, wafer, high purity gas and photoresist are mostly controlled by Japan, Korea and Taiwan.

For China's semiconductor industry, on the one hand, imports of semiconductor products and raw materials are hampered; on the other hand, the domestic industry is still in its growth stage, and there is a gap between the semiconductor industry and the world-class manufacturers. The domestic market is mostly concentrated in the low and middle sectors, and is sensitive to profits. Besides, the external pressure from the United States has also aggravated the pressure of domestic enterprises such as HUAWEI.

Yao Jiayang said: "if China's epidemic situation can be completely controlled, China's second half year's consumer market will be of great help to China's semiconductor design industry. In the face of challenges, mobile phone shipments in the first half of the year are affected, and the entity list policy has not yet been lifted. HUAWEI should be affected to a certain extent.

The core report pointed out that China's electronics industry is mainly export, although most of the chips are in China, but the terminals are mainly global. Therefore, the smooth flow of global logistics and transportation is very important to China's semiconductor industry. With the outbreak of the epidemic around the world, all countries have carried out more stringent quarantine inspection on international flights and import and export of goods. The transport of goods was blocked and international trade was greatly affected. At the same time, international exchange of talents is almost frozen, and cross-border talent flow is almost frozen in the first half of this year. From business negotiations, upstream and downstream cooperation, to communication between engineers, efficiency is greatly reduced, which also brings shadows to the industry.

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