We anticipate resolution of the semiconductor shortage by mid-2023, potentially followed by an excess inventory issue. The semiconductor market is presently in a downturn, with memory markets witnessing a decline in unit prices due to oversupply. Nevertheless, the automotive industry continues to grapple with semiconductor shortages, exemplified by Toyota’s popular Prius model taking 18 months from order to delivery. This analysis delves into the current state of affairs across various product segments.
Global semiconductor markets have experienced negative growth for seven consecutive months, with the memory market bearing the brunt of this decline. Reduced demand for PCs and smartphones, along with the underperformance of major IT vendors contributes to this downturn. Memory manufacturers are faced with the dilemma of holding excess inventory or releasing products at reduced prices.
When the semiconductor shortage initially emerged as a social issue in early 2021, products not requiring cutting-edge processes, such as MCUs, analog, and discrete devices, were most affected. The question now is, what is the status of these products?
The MCU market has seen growth, particularly in the automotive sector. However, the shortage issue appears to be waning, with extended delivery times becoming the norm. The analog market, on the other hand, has experienced a decline, with general-purpose analogs transitioning from shortage to surplus. This shift is likely attributable to increased temporary demand during the COVID-19 pandemic when distribution networks faltered.
In the discrete market, small-signal transistors have declined, while power transistors have seen growth. Power transistors are in high demand due to the electrification of automobiles, with their procurement becoming a bottleneck for car manufacturers.
We project that the semiconductor shortage will conclude in the first half of 2023. The current situation, characterized by a semiconductor market in recession yet still grappling with shortages, is indeed unusual and likely perplexing for industry stakeholders. As the automotive sector undergoes significant transformations with the rise of CASE (Connected, Autonomous, Shared, Electric), the semiconductor industry must adapt accordingly. Companies will need to devise strategies that harness CASE rather than being swayed by it.
