ADI,TI are experiencing a market downturn
The market prices of analog chips led by TI and ADI have plunged. Compared with last year, customers are snapping up chips at high prices, and prices for ordinary analog chips are rising.
Although the price of analog chip market is falling sharply, many people’s psychological price has not returned to normal, ADI CEO said that “orders are slightly reduced”, which indicates the return of rational trend of analog chip market in the future.
Big analog chips are constantly haggling in real demand, and several Chinese alternative manufacturers are emerging, which brings new opportunities to the spot market dominated by imported chips, and greatly weakens the price rise of big brands.
What does the cooling of the market for analog chips represent? What is the capability and potential of China’s analog chip?
Chip prices have plummeted
Most of the generic analog chip brands experienced a boom last year, including TI, ADI, Guangdong MISUN Technology (later acquired by ADI), and Infineon Technologies. The most significant number of TI analog chips, as the demand market number one explosive market price overall soaring, comparable to ST MCU continues to rise in hot prices.
In the panic of last year, the market price of TI was pushed up step by step. The market was fixated on the price, and the price would be quickly taken down if the price was lower. It became more and more expensive for end customers to buy chips at high prices.
TI many chip shortage, gave birth to write plug-in software to help grab the chip of the gray business, and last September began to gradually appear to help grab advertising, such as “second kill software production”, “real-time monitoring system support 0.05 refresh rate” a large number of brush screen, there are sellers offer 68,000 yuan package year price.
TI official website price and quality is still attractive to many people, at that time to buy a panic software, is to cater to a part of the long-term bulk purchase demand market.
Now analog chip factory TI official website chip market demand is not as big as before, chip snapping software business bleak. TI original factory in the official website to customers to open a green channel.
The performance of the entire analog chip spot market has also experienced a process from shortage to oversupply.
From the end of 2020 to 2021, the shutdown of the epidemic caused the chip delivery period to be extended to half a year, even 50 weeks, 54 weeks, while a year is only 52 weeks.
For example, at the beginning of last year, the delivery period of many enterprises changed significantly, many from 8-10 weeks to 20 weeks, bringing a certain degree of shortage, price and delivery period of the thunder is becoming more and more intense.
The delivery was difficult, so that ADI, TI and other materials prices in the spot market had a 20%-30% increase, some models of products have doubled in price, “the increase is catching up with the housing price”, even the low price of less than $1 materials into the “core” shortage.
What’s more, even if you pay a high price, you can’t buy the goods. The price of coverage model is more and more wide, the market into an unprecedented hot. Coupled with the downward shift in the upstream cost of the industry chain, leading to pressure chip factory price adjustment, to the spot market more than a reason to rise.
Now consumer electronics demand winter coming, the market is down, these high premium analog chips once the return to the normal price, the range will be more obvious.
This kind of phenomenon is everywhere, especially on the market hot, big circulation model. Such as TI LM358, once rose to 1 yuan, now back to 0.2 yuan; TPS51200DRCR, once up to 70, now 3. ADI interface isolation IC (such as ADMx, ADUMx) agent supply to the market, the price has been greatly reduced.
The market share of ADI is second only to TI. In June this year, its market demand has decreased significantly, the price of general chips has fallen sharply, and there are few orders. In the past, it was panic buying, but now it is wait-and-see and price comparison. Downstream buyers want to get the chips they need at a lower price.
Adapt to the cycle, it is all year round small stall owners also know the truth. Last year, the lack of core customers everywhere looking for chips, sellers develop software to grab the chip, this year is not lack, they will change the platform for conventional monitoring chips, or look for other business.
Under the influence of strong risk last year, some sellers in Huaqiangbei, Shenzhen, China, are said to have abandoned their stores when spot market prices have shrunk so wildly.
Digital chip collapse,analog chip consumer demand changes significantly
Amid global inflation and a sluggish economy, ADI’s CEO recently announced its latest earnings with a caveat that the number of canceled orders was up “slightly.” ADI led semiconductor stocks lower on the news, while rival TI shares also closed sharply lower. Still, demand is outstripping supply and revenues are strong in emerging sectors such as cars and communications.
As the world’s leading analog chips, TI and ADI have a combined global market share of more than 32% (TI 19% and ADI 13%), occupying a relatively important position in the Chinese market. In the analog chip spot market of TI and ADI, the price of generic products and the order demand fell sharply, presenting another appearance as a whole.
According to related studies have shown that the recent PMIC (power management IC) with CIS, parts of MCU and SoC and other products more than cut down a single phenomenon emerge, although still is given priority to with consumer applications, but many have been unbearable customer contract sharply cut sheet, capacity utilization started to slip, from two years ago “chip shortage” in an all-round way, to today’s “structural imbalances”.
Now the performance of the spot market largely from the previous lack of core foam composition, Panicky repeat orders and blind stocking, once pushed up the analog chip market price.Automotive, industrial control and other special chips still maintain high economic demand, but general analog chips by consumer demand is low, the price fell, showing a “cold and hot” situation.
Different from the properties of analog chips,CPU, AP processors for mobile phones, SoC chips, and MCU for large and small home appliances all have the same name –digital chip.
Digital chips are used for logic processing and control, digital signal coding and decoding. With the rapid development of communication and picture quality, the replacement is fast. Therefore, once the demand surges or slumps, the impact will soon appear.
The average retail price of analog chips is low and stable
With long certification period and life cycle,the average retail price of analog chips is low and stable. Its products have a wide range of categories, and its downstream applications almost cover every field of life and production. And its performance, life cycle, price and other aspects are relatively stable.
Therefore, the analog chip market is not easy to be affected by the fluctuations of a single industry, especially compared with other types of chips, the price impact is relatively small. That is why the analog chip market is regarded as a barometer of the semiconductor industry.
Drastic changes in market prices do not affect the continuous growth of analog chips. As an indispensable part of electronic products, the market scale of analog chips continues to expand.
According to relevant research, the global analog chip market size reached $74.131 billion in 2021, with a year-on-year growth rate of more than 30%.The analog circuit industry will continue to grow rapidly in 2022, with total global analog IC sales expected to reach $83.2 billion in 2022, up about 12% year on year.
In the global market of analog chips, there is the monopoly of the old international big factory before, and the emerging power that cannot be ignored is rising.