I can’t get it even for 200,000 won worth 20,000 won… Samsung presidents also make an emergency business trip

Semiconductor prices skyrocket due to Chinese’participation pre-sale’ and’buying-in’ in the middle
“I can’t get a 20,000 won chip, even 200,000 won”… Suspension of production and production reduction
Even if you order now, wait for two years… Even large companies look for suppliers

The shortage of semiconductors is affecting all industrial sites beyond automobiles and mobile phones. Some semiconductor chip prices have soared more than 10 times compared to the end of last year, and companies are continuing to postpone the launch of new products because there is no semiconductor. SK hynix semiconductor plant production line in Icheon, Gyeonggi-do. Hankyung DB

Company W, a company specializing in closed circuit TV (CCTV) cameras in the metropolitan area, is in an emergency because it cannot obtain a microcontroller (MCU). In the distribution market due to shortage of semiconductors, MCUs, which used to cost $8 per unit last year, have recently jumped more than six times to $50. The MCU is a chip that acts as the brain of information technology (IT) devices, and small and medium-sized IT companies purchase it through dealerships of overseas semiconductor companies. An official from Company W said, “The stock has bottomed out, so we keep placing orders regardless of price, but we can’t get it.”

According to the IT industry on the 18th, the domestic industrial sites are experiencing’great chaos’ due to the shortage of semiconductors. The chip shortage that started in automobiles is spreading to the entire IT industry, such as TVs, household appliances, PCs, and small electronic devices through smartphones. The price has jumped more than 30 times by product, but it is not easy to secure it even if you add more money.

Small and medium-sized IT companies that are losing their purchasing power are being hit directly. These companies do not have a large number of purchases, so they do business with intermediate agents rather than with the headquarters of semiconductor companies, as they recently set out to’lock things’ in an effort to increase prices. An official from a medical device company said, “These days, MCU distributors are pretending to be’super packs.’ It is said that the number of items has increased up to two years.”

The same goes for large corporations. It is known that even Samsung Electronics and LG Electronics are producing TVs and home appliances more than 10-20% less than the planned quantity, as display driving chips (DDI) and power semiconductors (PMIC) have not been smoothly procured. The US HP is also unable to meet the demand for educational computers due to a lack of semiconductors, and Robam, a Chinese home appliance maker, has delayed the launch of new ovens by four months due to a shortage of chips, and the global IT industry is struggling with measles.

In recent years, the supply and demand system has been completely collapsed, with Chinese IT companies, which are being sanctioned by the United States, going to stockpiling, and the price of certain semiconductors, which had been traded at $1 each, surged to $32 due to demand. A senior official at a mid-sized semiconductor company said, “Even wafers, the raw material of chips, are going into a’shortage’ situation.

In the middle of sweeping the chips for 10 times the price… Samsung presidents also go on “out of stock” emergency business trips
‘Semiconductor Shortage’ spreads in all directions in industrial fields such as TVs and small home appliances

Han Jong-hee, head of the video display business division (President), who oversees Samsung Electronics’ TV business, got on a plane to Taiwan last week. This is an urgent business trip because the supply shortage of DDI (display drive chip), which is a key component of TV, has become serious. It is known that President Han visited Mediatech, a DDI supplier, and asked for a’stable supply’. In the middle of last month, Roh Tae-moon, head of the wireless business division (president), who is in charge of the smartphone business of Samsung Electronics, went on a business trip to the United States. The destination is Qualcomm, the world’s No. 1 semiconductor company for smartphones. President Roh requested an urgent delivery of an AP (application processor) to Qualcomm.

○“Regardless of the price… Securing quantity is the top priority”

According to the industry on the 18th, the scarcity of semiconductors is affecting all industrial sites beyond automobiles and mobile phones. The shortage of semiconductors is so severe that the top management in the finished product (set) division of Samsung Electronics, which has strong purchasing power in the global semiconductor market, goes on an emergency business trip. An official from the purchasing team of a large company said, “It is said that the company that secures semiconductors regardless of price is the’winner’.

In terms of semiconductors, it is a common story among information technology (IT) company officials that’what you call is worth’. The price of microcontrollers (MCUs) used in closed circuit TVs (CCTVs) and medical devices has skyrocketed from 8,000 won per unit last year to 50,000 won in recent years. Although it is a low-cost general-purpose product, the price has changed to a supplier advantage market that has jumped more than six times. It is a common story among IT industry officials that the situation is’cannot buy because there is no’ even if they try to buy at the cost of rising costs.

The situation in the automobile industry, which is regarded as the epicenter of the semiconductor shortage phenomenon, is deteriorating. The purchasing team of global auto parts companies such as Bosch, Continental and Hyundai Mobis is in an emergency. It is known that they are collecting semiconductors at 5-6 times the price by scanning even black markets (stock trading markets) in China and Hong Kong. An industry insider said, “At the headquarters of an MCU manufacturer, a purchasing team of car parts makers is camping out.”

○Competition to secure inventory… Soaring prices

The reason why the semiconductor shortage crisis, which started in earnest at the end of last year, has recently become serious is because the competition for’stocking’ has ignited. Chinese IT companies are known to be sweeping chips for up to 20 times the normal price in the global distribution market. US semiconductor export restrictions on Chinese companies also had an impact.

Mark Liu, CEO of TSMC, a Taiwanese foundry (semiconductor contract manufacturing) company, explained, “Some companies have doubled their orders to secure inventory, which is the main reason behind the recent shortage.” An official from a domestic camera company said, “As soon as the MCU is released to the market, there is a story that Chinese companies are’cleaning out’.” “If the inventory runs out, production itself will be impossible.”

It is also known that semiconductor retailers”locking things up’ is fueling a rise in prices. Large IT companies deal directly with semiconductor producers, but mid-sized and small and medium-sized companies with little purchases deal with agents that act as wholesalers. Industry insiders explained that dealerships deliberately do not release their supplies to the market because they believe that semiconductor prices will rise further.

An official from a mid-sized domestic heating equipment company explained, “There have been rumors that semiconductor dealerships are stocking things in the warehouses of the headquarters.” The New York Times of the US also reported on the 15th that “there was a 10-fold increase in the price of a 20-dollar modem.”

○’Sequential Waves’ Until Production Suspension and Price Increase

Semiconductors with relatively low market demand, such as CCTV and web cameras, have been discontinued in recent years. As the scarcity of automotive semiconductors has emerged as a top priority for each country, NXP and ST Micro are focusing their efforts on producing automotive semiconductors instead of MCUs for home appliances.

There are also small and medium-sized overseas companies that have stopped producing semiconductors because they cannot obtain semiconductors. Wise Labs, an American startup that produces webcams, is unable to sell products due to lack of semiconductor stock. Jason I, the president of the Chinese subsidiary of Whirlpool, the world’s largest consumer electronics company, explained in a recent foreign press interview, “The lack of semiconductor chips is causing a disruption in the amount of shipments to Europe and the US.”

Concerns about rising product prices are also growing. Semiconductor prices for TVs, such as DDI, as well as MCUs, have recently skyrocketed 20~30%, causing product cost to rise. According to foreign media, Sony of Japan and Xiaomi of China have recently raised the prices of some products such as TVs due to the lack of semiconductors. The situation in the domestic home appliance industry is similar. An official at an IT conglomerate explained, “If the price of raw materials such as semiconductors rises, it will have no choice but to affect the customer discount rate or selling price.”

Reporter Hwang Jeong-soo [email protected]


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