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War: Semiconductors cartel is doing good
  • Vitaliy_KiselevVitaliy_Kiselev

    The New York Times surveyed several market participants about the changes they had to face since the beginning of the pandemic.

    The shortage of semiconductor components is most acutely felt in the market segment that uses mature lithography and produces fairly simple products.

    Microchip Technology, a microcontroller company, estimates that demand now exceeds supply by about 50%, and there is simply no cost-effective way to quickly close the gap.

    The semiconductor market has become a seller's market. It is suppliers and manufacturers who can now dictate conditions to customers and form a pricing policy that is profitable for themselves.

    Big media now spread total lies as they are required part of cartel agreements. All, 100% shortage had been organized and is caused by manufacturers and later by media - such they forced firms to buy not the normal amount of chips, but big stock "to be sure" at 200-500% of usual price.

    On all markets where shortage is maximum we can see lack of big jumps of production, no more than 2-10%. On many of big markets we actually have 5-20% fall.

    Car industry fake chip shortage had been used to artificially cut production of cars that are consuming oil. Issue is that all 100% of car related chips are made according to long term contracts with big sanctions in case of shipment issues and very tight legal checking. But media suddenly tell us that it is not the case.

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  • Vitaliy_KiselevVitaliy_Kiselev

    Experts talk about the problem of artificially maintaining scarcity, from which industry actors from chip raw material manufacturers to end-product manufacturers can benefit. According to Stepan Fionov, there are manufacturers who order more chips than required for subsequent resale at inflated prices.

    It should be noted speculation on the part of the Asian market, where at the moment components are available and sold at prices that differ from the manufacturer's prices, they are sometimes one or two orders of magnitude higher, - he said.

    TSMC chairman Mark Liu said in October that their factories are producing more chips than it comes to final products. According to him, there are players in the microcircuit market who deliberately accumulate components.

    Customers are expanding their buffer warehouses for components. Thus, a request for an increase in inventory is added to the production requirements. As customers turn to all distributors, they are also increasing their orders in factories to accommodate the expansion of buffer warehouses. Thus, demand multiplies, - said the executive director of the Association of Developers and Manufacturers of Electronics (ARPE) Ivan Pokrovsky.

  • Vitaliy_KiselevVitaliy_Kiselev

    More criminals join the party

    The inevitable rise in price of silicon substrates (wafers) - round silicon wafers for the manufacture of semiconductors - became clear this spring. The price of polycrystalline silicon began to rise rapidly. Long-term contracts with manufacturers are still rescuing from a massive rise in prices for substrates, but this will not continue indefinitely. The new fiscal year will bring new contracts and new higher prices. And you have to come to terms with this.

    Samsung Electronics, DB HiTek, SK Hynix System IC and Key Foundry confirmed to South Korean sources that the purchase price of 200mm silicon wafers increased by 20%. The only supplier of substrates in the Republic of Korea - SK Siltron - has not yet raised the price of its products, which in some cases neutralizes the price increase. But the old prices are valid until the completion of contracts and will be revised upwards from the new year.

    Rising prices for substrates are not the only factor in the expected rise in prices for semiconductor products. Prices will also grow due to an increase in the payback period of industrial equipment (it becomes much more expensive as the technological processes become more complex), the price of a photomask will grow (this year the price has risen by 20%) and the cost of other works and services will increase. As a result, the cost of manufacturing chips has grown by up to 30% since the beginning of the year. These are additional costs that will fall on the shoulders of the product manufacturers and, ultimately, on the shoulders of the buyers.

  • Vitaliy_KiselevVitaliy_Kiselev

    As noted by Reuters, at an investor event, GM President Mark Reuss said that the corporation is now working with seven chip suppliers to create three new families of microcontrollers that can reduce the number of unique chips in future vehicles by almost 95%. Among the partners of the automaker in this context, Qualcomm, STMicroelectronics, TSMC, Renesas, NXP, Infineon and ON Semi are mentioned.

    The main flow of funds associated with this initiative will be directed to the United States and Canada, if we talk about the geographic principle of concentration of investments.

    Now we can see one of the cartel goals. One of it is to reduce number of chips hey make, thus increasing profits by cutting expenses.

  • Vitaliy_KiselevVitaliy_Kiselev

    Sales of passenger cars in Europe in October decreased by 29.3% and amounted to 798693 cars. As noted in the European Association of Automobile Manufacturers (ACEA), this is the worst October result in the history of the European car market. At the same time, negative dynamics is recorded for the fourth month in a row, which is due to continuing interruptions in the supply of new cars due to the lack of semiconductors for their production.

    At the end of ten months of 2021, car sales in Europe amounted to 9 million 960 thousand 706 units (+ 2.7%). Germany became the leader in car sales last month, where 178683 cars were sold (-34.9%). France took the second place among the largest European car markets with 118,519 cars (-30.7%). The third result was shown by the United Kingdom - 106,265 vehicles, which is 24.6% less than last year. As noted by the British Society of Automobile Manufacturers and Dealers (SMMT), this is the worst result in October since 1991. Next comes Italy with 101015 cars sold (-35.7%). Spain still closes the top five of European leaders, whose car market in October decreased by 20.5% and amounted to 59,044 cars. Among automakers, the largest number of cars in the European Union was sold in October by Volkswagen - 74,027 cars (-40.2%). The second place was taken by Peugeot with 52706 vehicles (-30.5%). The third line is occupied by Renault, which sold 50982 vehicles (-36%). This time, the top five are closed by two German premium brands - Mercedes-Benz (48101 units, -36.3%) and BMW (47738 units, -21.2%).

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