How many volumes is the MCU market? “We plan not to make a profit for two years, but also to ensure sales performance and market share.” This is the slogan shouted by a domestic listed MCU enterprise earlier. However, the MCU market has not moved much recently and has begun to build a bottom and stabilize.
Study for two years
The past few years have been a roller-coaster ride for MCU vendors. In 2020, chip production capacity is limited, resulting in a global chip shortage, and MCU prices have also risen. Local MCU domestic substitution process has also made great strides into a lot.
However, starting from the second half of 2021, weak demand for panels, mobile phones, laptops, etc., led to the spot price of various chips began to fall, and MCU prices began to decline. In 2022, the MCU market is seriously differentiated, and general consumer chips are close to normal prices. In June 2022, MCU prices on the market began to avalanche.
The price competition in the chip market is becoming increasingly fierce, and the price war in the MCU market is becoming increasingly fierce. In order to compete for market share, domestic manufacturers even dump at a loss, resulting in a sharp decline in market prices. Cutting prices has become a common phenomenon, and making profits has become the way for manufacturers to roll out new lows.
After a long period of price clearing inventory, the MCU market has begun to show signs of bottoming out, and supply chain news said that the MCU factory is no longer selling at a lower price than the cost, and even slightly increased the price to return to a more reasonable range.
Taiwan media: Good omen, see the dawn
According to Taiwan media Economic Daily reported that the semiconductor inventory adjustment has a good omen, the earliest to bear the pressure of falling prices in the microcontroller (MCU) market, the leading bargaining mainland enterprises have recently stopped the strategy of clearing inventory, and some items have even begun to increase in price. MCU is widely used, covering consumer electronics, automobiles, industrial control and other key areas, and now the price is rising, and the first fall (price) stops falling, revealing that the terminal demand is warm, and the semiconductor market is not far from the road to recovery.
Global MCU index factory including Renesas, NXP, microchip, etc., have an important position in the global semiconductor industry; The Taiwan factory is represented by Shengqun, New Tang, Yilong, Songhan, etc. With the easing of the bleeding competition of mainland enterprises, relevant manufacturers will also benefit.
Industry insiders pointed out that the MCU is very widely used, its dynamic is the market used to judge the semiconductor boom vane, micro core released financial results and outlook, more likened to the “canary in the mine”, highlights the MCU and the development of the market is very close, and now the price rebound signal is a good sign after semiconductor inventory adjustment.
In order to solve the huge inventory pressure, the MCU industry faced the worst dark period in history from the fourth quarter of last year to the first half of this year, mainland MCU manufacturers did not mind the cost of bargaining to clear inventory, and even well-known integrated component factories (IDM) also joined the price battlefield. Fortunately, the recent market price clearance inventory is gradually coming to an end.
The unnamed Taiwan MCU factory revealed that with the easing of the price attitude of mainland enterprises, the price difference of cross-strait products has gradually narrowed, and a small number of urgent orders have begun to come in, which is conducive to more rapid inventory removal, and the dawn should not be far away.
Performance is a drag. I can’t roll it
MCU as a subdivision circuit, there are more than 100 domestic MCU companies, the market segments are facing a lot of inventory pressure, the subdivision circuit is also a bunch of MCU companies in the competition, in order to more quickly to inventory, and maintain customer relations, some MCU manufacturers can only bear to sacrifice gross profit, make concessions on the price, in exchange for customer orders.
With the support of the depressed market demand environment, the price war will continue to drag down the performance, so that the operation will eventually kill negative gross profit and complete the shuffle.
In the first half of this year, more than half of the 23 domestic listed MCU companies lost money, MCU is becoming more and more difficult to sell, and several manufacturers have completed mergers and acquisitions.
According to statistics, in the first half of this year, only 11 of the 23 domestic MCU listed companies achieved year-on-year revenue growth, and the performance declined significantly, generally more than 30%, and the most declining core Sea technology was as high as 53.28%. Revenue growth results are not very good, growth of more than 10% only one, the remaining 10 are below 10%. Net profit margin, there are 23 out of 13 losses, only Le Xin technology’s net profit is positive, but also only an increase of 2.05%.
In terms of gross profit margin, SMIC’s gross profit margin dropped directly to below 20% from 46.62% last year; Guoxin Technology fell to 25.55 percent from 53.4 percent last year; National skills dropped from 44.31 percent to 13.04 percent; Core Sea Technology dropped from 43.22 percent to 29.43 percent.
Obviously, after the manufacturers fell into price competition, the entire industry went into a “vicious circle”. The domestic MCU manufacturers who are not strong have entered the cycle of low-price competition, and the internal volume lets them have no way to do higher-quality high-end products and compete with international giants, giving foreign investors who have ecological, cost and even capacity advantages the opportunity to take advantage.
Now the market has signs of recovery, enterprises want to stand out from the competition, it is necessary to upgrade in technology, products, in the larger market recognition, it is possible to highlight the encircling, to avoid the fate of elimination.
Post time: Oct-30-2023