CHALLENGES FOR ELECTRONICS MANUFACTURERS
According to IPC’s May Global Electronics Supply Chain Sentiment Report, material costs are rising for nine out of 10 electronics manufacturers surveyed, while labor costs are rising for nearly four-fifths. Supporting data from the IPC’s May economic report suggests that three main forces are weighing on the economy and electronics manufacturing: Russia’s invasion of Ukraine, inflation raising costs, and China’s Covid-19 policies exacerbating existing supply chain problems.
“The Russian invasion of Ukraine is a negative supply shock to an already strained supply chain. It will take several months to fully determine its full impact on the electronics industry,” said Sean, chief economist at IPC. There have been more severe negative impacts, but the effects are being felt globally. ”
OTHER FINDINGS
- Inventories remain tight, and supplier inventories have gotten very tight in the last month
- Not enough innovation and capabilities in the semiconductor industry
- Increased risk of recession in 2023
DELAYED DELIVERY
In addition to Apple, TSMC’s customers can defer orders scheduled to be fulfilled in 2023, but even for high-volume orders in 2023, TSMC has no plans to cut prices or offer discounts, the sources said.
TSMC’s other major customers, including AMD, MediaTek, Nvidia and Qualcomm, have started talks with TSMC about revising their 2023 orders or delaying deliveries. ‘ the source said.
In addition, the sources pointed out that despite the reduction in overall orders in 2023, TSMC continues to run its 22/28nm and 5nm production lines at full capacity. TSMC has also received 3nm order commitments from Apple and Intel, and is expected to start mass production in 2023.
INCREASED COSTS
According to industry sources, IC design companies, especially smaller ones, continue to face pressure from rising foundry costs.
Speculation arose in the chip manufacturing industry, with TSMC’s biggest customer Apple rejecting the foundry’s request to raise prices in 2023, with a price adjustment yet to be determined. According to reports, TSMC plans to raise prices for most of its manufacturing processes by about 6% starting next January.
TSMC’s other major customers could follow suit, putting pressure on foundries to revise their pricing strategies for 2023.
For small and medium-sized IC design companies, when negotiating prices with foundries, there are relatively few bargaining chips, and cost pressures will still face challenges in the short term.
Foundries in mainland China and some in Taiwan have “softened” their stance, agreeing that prices can be negotiated if supply eases, according to sources at the fabless chip maker. However, major Taiwanese foundries, including TSMC and UMC, are still waiting to see whether they should stick to their original price hike plans in 2023.
SHIPMENT OF AUTOMOTIVE PANELS WAS ABOUT 85.81 MILLION PIECES
Data show that in the first half of 2022, the global vehicle sales volume was about 37.66 million, a year-on-year decrease of about 10.7%, and the global shipment of front-mounted vehicle display panels was about 85.81 million (front-mounted only), a year-on-year increase of about 5.6%.
It is estimated that in 2022, the global shipment of LTPS LCD vehicle display panels will be about 35.1 million pieces, and the penetration rate will increase to about 19.6%. In 2022, the global demand for front-mounted vehicle display panels will reach 180 million pieces, a year-on-year increase of about 10.0%, and will maintain a compound growth rate of more than 6.0% in the next five years.
With the help of automobile intelligence, as an important hardware facility for human-computer interaction, the trend of large-screen and multi-screen display is accelerating, and the scale and added value of vehicle display products are increasing.
According to their own advantages, major panel manufacturers have adopted active diversification strategies, actively adjusted their own layout, and increased the exploration of the depth of display products in the cockpit. Recently, major panel makers have been deepening exchanges and cooperation with OEMs, and their efforts to increase investment in automotive display-related fields are not only stabilizing and expanding market shares, but also pursuing breakthroughs in high value-added products such as complex modules.
Q2 GLOBAL MOBILE PHONE MARKET OPERATING PROFIT GROWTH
The latest research data shows that in the second quarter of 2022, global mobile phone revenue fell 2% year-on-year and 15% month-on-month to $95.8 billion. Global handset operating profit rose 6% year-on-year to $13.1 billion.
Among them, the top five mobile phone manufacturers contributed about 80% of the total revenue.
OPPO, vivo and Xiaomi all saw double-digit year-over-year revenue declines. Samsung and Apple’s revenue rose 25% and 3% year over year, respectively.
The latest research shows that the global mobile phone market revenue fell for the second consecutive quarter, although the average selling price (ASP) rose by 6% during the same period, due to factors such as China’s urban control policies and continued geopolitical uncertainty, the global mobile phone market The volume of goods fell, which in turn led to a drop in revenue.
Thus, the 6% annual operating profit growth was echoed by rising ASPs rather than declining shipments. Operating profit reached $13.1 billion in the second quarter of 2022.
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