Semiconductor market news(Jan. 30 to Feb 5)丨MLCC inventory to return to normal in 2Q23 on mounting replenishment demand

  • Release time:2023-03-15
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01. Market Reports Imply Supply Shortages and Extensive Lead Times Will Persist


Research indicates that while some of the supply chain bottlenecks have improved, supply shortages and long lead times will persist throughout 2023. In particular, automotive shortages will be widespread. Sensor lead times are at an average of 30-plus weeks; supply is available on an allocation basis only and not showing signs of improvement. Nevertheless, there are some positive changes as lead times for MOSFETs are contracting.

 

Prices are slowly stabilizing for discrete components, power modules, and low-voltage MOSFETs. Market pricing for common parts is starting to decline and stabilize. Silicon carbide semiconductors that were previously subject to allocation are becoming more readily available, causing forecasts to predict that demand will ease in Q1 2023. Power module pricing, on the other hand, is still relatively high. 


The growth of the global new energy vehicle enterprise caused a demand uptick for rectifiers (Schottky ESD), and supply is still low. The supply of power management ICs, such as LDO, AC/DC, and DC/DC converters, is improving. Lead times are now between 18–20 weeks, but supply remains tight for automotive-related parts. 


02. Material Prices for Passive Components Continue to Rise and Affect the Market


Lead times for passive electronic components were stable throughout 2022, but the rising cost of raw materials is changing that. The price of copper, nickel and aluminum is greatly increasing manufacturing costs for MLCCs, capacitors and inductors. 


Nickel in particular is the main material used in MLCC production, while steel is also used in capacitor processing. These price fluctuations will result in price hikes for finished products and could send further ripple effects through demand for MLCCs as prices for these components continue their upward trend. 


03. MLCC inventory to return to normal in 2Q23 on mounting replenishment demand


MLCC shipments for consumer applications have shown signs of rebounding since mid-January, and suppliers are expected to see their inventory fall to regular levels in the second quarter of the year from the current status of around three months.


04. Infineon expects improved MCU availability in 2H23, seeing big growth for auto, renewables and power infrastructures


At its latest conference call on Feb 2, Infineon said its Aurix MCU family is "on full ramp mode," adding that having gotten more wafers, it expects availability of automotive MCUs to improve in the second half of 2023. The comment echoes what TSMC has previously stated.


The Germany-based automotive semiconductor supplier reiterated the bifurcation of the semiconductor market where demand for semiconductors for automotive, renewables, and security remains robust while demand for consumer products are seeing cyclical slowdown and sluggish corporate spending on IT infrastructures.


According to Infineon, customers are now more willing to sign capacity reservation agreements or to place longer committed orders to secure semiconductor supply as e-mobility and ADAS keep trending up. OEMs now "have a strong tendency" to source strategic parts directly and strive for higher stock levels.


Catering for such demand, the company is ramping up selling rate to nearly one million pieces per day. For fiscal 2023, capacities for automotive products have been fully booked. The company pointed out that due to weak outlook for consumer market demand, it is able to shift some of the MOSFET capacities to produce for renewable energies and power infrastructures.


05. STMicroelectronics plans to spend $4 billion on expansion


STMicroelectronics recently announced that it plans to invest about $4 billion this year to expand its 12-inch fab and increase its silicon carbide manufacturing capacity.


STMicroelectronics President and CEO Jean-Marc Chery said that throughout 2023, the company will continue to implement its original strategy, focusing on the automotive and industrial sectors.


Jean-Marc pointed out that in 2023, it plans to invest about $4 billion in capital expenditure, mainly for the expansion of 12-inch fabs and the increase of silicon carbide manufacturing capacity, including plans for substrates. Jean-Marc believes that based on strong customer demand and increased manufacturing capacity, the company's full-year net income in 2023 will be between $16.8 billion and $17.8 billion, with a year-on-year growth rate of between 4% and 10%.


06. Western Digital announces $900 million investment


Western Digital recently announced that it will receive a $900 million investment led by Apollo Global Management, and Elliott Investment Management also participated in the investment.


According to industry insiders, this investment is a precursor to the merger between Western Digital and Kioxia. It is expected that Western Digital's hard disk business will remain independent after the merger, but details may change.


According to previous reports, the two parties have finalized a rough transaction structure, Western Digital will spin off the flash memory business and merge with Kioxia to form an American company.


Western Digital CEO David Goeckeler said that Apollo and Elliott will help Western Digital conduct the next phase of its strategic assessment.


07. SK hynix restructures CIS team


According to reports, SK Hynix has reorganized its CMOS image sensor (CIS) team in order to shift the focus from expanding market share to developing high-end products.


Sony is the world's largest producer of CIS components, followed by Samsung. Focusing on high-resolution and multi-function, the two companies jointly control 70% to 80% of the market, of which Sony has about 50% market share. SK Hynix is relatively small in this field and has in the past focused on low-end CIS with a resolution of 20 megapixels or less.


However, the company has already started supplying its CIS to Samsung in 2021, including its 13-megapixel CIS for Samsung's foldable phone and the 50-megapixel sensor for the Galaxy A series last year.


The report pointed out that the SK hynix CIS team has now created a sub-team to focus on the development of specific functions and characteristics of the image sensor.