The rising price of electronic components is breaking the balance between supply and demand in the industrial chain
[consulting group intelligence chief analyst Chen said in an interview with the financial journalist, outbreak gives many components price reason, but in the long term price volatility is still depends on market demand can be met. "affected by the factors such as 5 g, judging from the fourth quarter of last year we have capacity tight, epidemic increase in the price of just one of the reasons."]
Four years ago, buying and selling DRAM (dynamic random access memory) was called "a more profitable business than flipping houses" because of soaring memory prices. Four years later, the price hike in storage components seems to be making a comeback, and spreading to several areas.
Since the beginning of this year, affected by the imbalance between supply and demand, the global memory chip market began to fluctuate, CMOS image sensor (CIS, complementary metal oxide semiconductor image sensor), passive components and other key electronic components have also appeared varying degrees of shortage.
In addition, as Japan and South Korea carry a large number of upstream electronic core components and materials production, if the epidemic can not be well controlled, industry insiders analysis, will cause a great shortage of supply for the entire electronic industry, thus further expanding the price trend.
Chen Jun, chief analyst at Swarm Intelligence, told China Business News that the epidemic has given rise to price increases for many components, but in the long run price fluctuations still depend on whether market demand can be met. "Affected by 5G and other factors, we have judged that production capacity is tight since the fourth quarter of last year, and the epidemic is only one reason for the price increase."
The epidemic in Japan and The ROK has accelerated the price fluctuation of components
As manufacturing giants after China, the US, Japan and Germany, the development trend of the EPIDEMIC in South Korea and Japan has a direct impact on the stability of the global manufacturing supply chain.
Take storage as an example, the cost of storage in mobile phones usually reaches 25%~35%, which has surpassed the screen and CPU to become the biggest cost of mobile phones. Samsung and SK Hynix, two Korean manufacturers, both occupy an important position in the field of memory.
According to DRAMeXchange, Samsung ranked first in terms of global NAND brand vendor revenue in the fourth quarter of 2019, with a market share of 35.5%. SK Hynix ranked sixth with a 9.6 percent market share. In the global private brand MEMORY revenue ranking of DRAM manufacturers in the fourth quarter of 2019, Samsung ranked first with a market share of 43.5%, while SK Hynix ranked second with a market share of 29.2%.
The market share of the two Korean manufacturers is 45.1 percent in NAND and 72.7 percent in DRAM.
Shengang Securities said in its report that the memory market has stabilized after the western Digital power outage in July last year and Samsung hwaseong plant power outage earlier this year. In particular, as South Korea is a global storage hub, the epidemic situation is not optimistic, which may affect the normal operation of Samsung and SK Hynix factories, thus affecting global storage supply and leading to price increases.
The latest quotes from the industry show that spot prices for memory and SSD drives have started to fluctuate. For example, the spot price of 8Gb DDR4 standard DRAM has increased by more than 10 percent since January, and the spot price of 4Gb DDR4 standard DRAM has increased by nearly 20 percent.
Japanese companies occupy an important position in semiconductor materials.
In the first five months of 2019, Japan produced 52 percent of the world's semiconductor materials. In the same period, Korea imported $110 million worth of photoresist from Japan.
According to a report by the Korea International Trade Association, Korea's semiconductor and display industries rely on Japan for fluoropolyimide 91.9 percent, photolithography 43.9 percent and high-purity hydrogen fluoride 93.7 percent, respectively. In silicon wafers, Japan's Shin-Etsu Chemical and SUMCO alone have 53 per cent of the global market. In last year's trade war with South Korea, Japan sent shockwaves through the semiconductor sector by restricting exports of three materials: fluorinated polyimide, photoresist and high-purity hydrogen fluoride.
Upstream capacity shortfalls could extend into the middle of the year
According to several analysts, how long the price hike of electronic components can last depends on whether the epidemic can be effectively controlled globally and whether the supply of upstream production capacity can meet demand.
Orders for the semiconductor production chain bottomed out as demand for 5G increased in the second half of last year and apple's iPhone11 series sold better than expected.
According to CLSA, demand for 8-inch wafers in Asia is in short supply, not just for TSMC but also for umC and SMIC, with fingerprint reading under ultra-thin screens and 5G phone shipments driving up overall wafer demand. In addition, the growing demand for Bluetooth master chips brought by TWS headsets and CMOS image sensors also pose challenges to the capacity of upstream WAFER manufacturers.
According to Sigmaintell's Global Smartphone Camera Supply and Demand Report, about 4.7 billion smartphone camera sensors were shipped globally in 2019, up about 15 percent year on year. Thanks to the contribution of Huawei, Samsung, Xiaomi and OPPO, the middle and low end of the sales force have been equipped with Four-camera successively. At the same time, camera sensor sales are increasing year over year, as customization and the need for larger pixels increase. From the perspective of sensor shipments, the global smartphone camera sensor supply chain is highly centralized. In terms of regional distribution, mainland China accounts for about 30 percent and South Korea for about 40 percent.
"Cameras will continue to have a good trend in the first half of the year." Chen jun told reporters that in 2019, as the penetration rate of multiple cameras accelerated, the demand for large pixels increased rapidly, leading to structural tension between supply and demand in the camera market, and some pixel sensors were in shortage in the fourth quarter. "The first-quarter figures for some products showed price increases of around 5 percent compared with the fourth quarter of last year."
In addition to cameras, passive components and other products have begun to expand the increase.
Passive components are mainly used in circuits to control signal transmission, gain signal size and other functions, which are indispensable for chip, communication, panel and other high-tech industries.
Due to the surge in demand and the impact of the epidemic, passive components such as MLCC (chip multilayer ceramic capacitor) and chip resistor have been planning to raise their prices for many times since the beginning of this year. The recent price increase is mainly driven by The resistance leader, And the price adjustment is about 30%.