Semiconductor manufacturers are working at full capacity: prices are rising and delivery times are getting longer.
(Photo: Sven Döring for Bosch)
Munich Customers in the chip industry still need strong nerves. Demand is increasing faster than production capacities. The prices for 85 percent of the components are therefore likely to rise in the next twelve months, according to current figures from the supply chain specialist Supplyframe. With 83 percent of the components, buyers would also have to wait longer for delivery than before, says supply frame expert Sascha Bütterling.
The fact that the situation is getting worse and worse two years after the start of the chip crisis is partly due to China. There, Supplyframe recorded 48 percent more design drafts for electronic devices in April than in the previous year. This means that new products are being developed on a large scale, which are to be launched on the market in the next few months. And for that, manufacturers need components.
According to Supplyframe, the number of new designs in April increased by only five percent compared to the previous year in Europe. But the Europeans will soon need even more semiconductors.
Things are not looking good across the entire product range of the chip industry – from analog power supplies and standard logic components to application-specific chips, the so-called ASICs, and sensors. If you want to come onto the market with innovative offers and have not yet ordered the chips, you have to be prepared for long waiting times. “For some assemblies we’re talking about two years,” says Bütterling.
Top jobs of the day
Find the best jobs now and
be notified by email.
Supplyframe has a deep insight into the business: the company, which was taken over by Siemens last year, operates its own marketplaces for electronic components and also analyzes the development activities of companies worldwide.
According to Supplyframe, customers of the largest German chip manufacturer, Infineon, have to wait between 52 and 80 weeks for power semiconductors, the so-called Mosfets. The coveted components for the power supply are actually allocated to the customers, the industry speaks of allocation. In addition, buyers have to dig deeper into their pockets: “We are benefiting from a positive price environment,” says Sven Schneider, CFO of Infineon.
The chip manufacturers are currently investing massively. According to the industry association Semi, the producers want to invest 446 billion dollars in the construction of new plants and additional production lines. The industry association refers to the volume of projects that start in the years 2021 to 2023. However, it may be several years before the new production lines start mass production.
STMicroelectronics has no more capacity for 2023
“We’re almost sold out for 2023,” says Jean-Marc Chery, head of STMicroelectronics. “Demand exceeds supply by 30 to 40 percent,” said the CEO of Europe’s largest semiconductor producer. “There are no signs of weakness in our core business,” adds Helmut Gassel, Chief Sales Officer at Infineon. The Dax group earns most of its money with the automotive industry and with industrial customers.
According to Supplyframe, the chip manufacturers have recently raised prices by up to 25 percent. They also require their customers to place binding orders and pay in advance. The corona lockdowns in China also ensure that chips remain scarce. STMicroelectronics, for example, suffered a two-week loss of production in Shenzhen in the first quarter.
Relaxation can only be expected in a few selected areas. Supplyframe predicts that order deadlines for LEDs will be shorter in the first quarter of 2023. Currently, customers have to order many optoelectronic products a year in advance. The situation for sensors should also improve slightly at the beginning of next year. The delivery time for more than half of all sensor types is currently over a year.
>>Read here: Silicon carbide: Chip companies are investing billions in the material of the future
In contrast to Supplyframe, chip customers expect that they will soon be better served with semiconductors. VW, for example, assumes that the semiconductor shortage will ease in the second half of the year and contribute to an increase in production that will offset the months of cuts. However, the auto industry is not expecting a breakthrough. In principle, semiconductors will remain scarce in the coming year, said BMW boss Oliver Zipse recently.
Supply frame manager Bütterling meanwhile gives the companies little hope: “War, inflation and the ongoing pandemic are further aggravating the situation,” he said. The chip supply could exceed demand again in mid-2024 at the earliest.
More: The chip industry is growing rapidly – but the managers are getting nervous