2021年10月26日

Car production is limited and chips are running out? How to break the “core” of China’s automobile industry

BEIJING, March 31 (Xinhua) — Car production constraints are not enough chips? — How to break the “core” of China’s automobile industry?

Xinhua News Agency reporter Gao Kang

Recently, Nio announced a five-day suspension of production due to a chip shortage. The shortage of chips and other conditions are gradually becoming obstacles to the development of the global auto industry. What will be the impact of the chip shortage on the development of the automobile industry and automobile consumption? How should China’s auto industry solve the pain of lack of “core”?

The car industry is suffering from a lack of “core”

Figures from the China Association of Automobile Manufacturers show that in February 2021, China’s auto production and sales reached 1.503 million and 1.455 million units, respectively, down 37.1 percent and 41.9 percent from the previous month.

“Car production and sales fell month on month, and the chip shortage was one of the reasons.” “Said Li Shaohua, deputy secretary general of China Association of Automobile Manufacturers.

A person in charge of NextEV said that currently, the shortage of chips has exceeded previous estimates. NextEV is paying close attention to the supply situation of the industry and actively coordinating supply chain resources.

“There is a shortage of chips in the electronics industry, and globally, the impact on the automotive industry is obvious.” China Automobile Industry Association deputy chief engineer Xu Haidong previously said.

Recently, Geely, Toyota, Volkswagen and other car companies are also due to the lack of chips resulting in reduced production capacity.

China, the world’s largest integrated circuit market, relies heavily on imports for the chips needed, and a chip shortage will have a negative impact on domestic electronics companies, experts said.

“Right now, most of the chips that car companies lack are entry-level chips, such as driver-assistance systems, electronic power steering and electronic control units.” Passenger car market information joint conference secretary Cui Dongshu said, high-end chips also exist “jam neck” phenomenon, restricting the development of automobile consumption and industry.

Why aren’t we running out of chips?

“With the continuous improvement of the degree of intelligence in society, the demand for integrated circuits, as the most critical component of intelligent devices, continues to be strong.” Huang Libin, director of the operation monitoring and coordination bureau of the Ministry of Industry and Information Technology (MIIT), said the epidemic has boosted the demand for online communication, and the demand for smart chips has also risen rapidly. Major integrated circuit manufacturing lines around the world are experiencing capacity shortages.

At the same time, with the gradual application of 5G, artificial intelligence, new energy and intelligent network technology in the automotive field, the application of chips in the automotive industry shows a trend of exponential growth.

“The growth in chip capacity has not been fully matched by the growth in demand for cars.” Mr Li said that in the first quarter of last year, the worst-affected period, car production and sales fell sharply, chip demand plummeted and car companies, including parts companies, withdrew a large number of orders for car chips. In the third and fourth quarters of last year, with the rapid recovery of China’s auto market, due to the production cycle of the chip industry, the new orders of auto companies were arranged later, resulting in a tight situation of automotive chips that began to appear in the fourth quarter of last year.

“Due to factors such as low cost of automotive chips and old technology, the pace of capacity expansion is relatively slow, the domestic market demand is large, and the supply side challenges are not small.” Cui Dongshu said that the epidemic in Europe and Southeast Asia, Japan’s earthquake, the United States snowstorm and other overwhelming factors, so that local semiconductor manufacturers have reduced production, production and other conditions, coupled with PC, Pad and other consumer electronic products chip demand growth, multiple factors lead to chip supply shortage problem worse.

Industry analysts believe that at present, the supply gap and recovery cycle of automotive chips is still not clear, the global vehicle, parts and components enterprises are still not optimistic about expectations, thus the emergence of the automotive industry panic hoarding phenomenon, has also become one of the reasons for the shortage of chips.

“The shortage of automotive chips is a problem of imbalance between supply and demand in the market, which cannot be solved by non-market means in a short time.” Li Shaohua predicted that in 2021, China’s auto production and sales will be affected by the shortage of chips, which will show a situation of being tight before and later. In the second half of the year, auto production and sales are expected to improve with the alleviation of the shortage of chips.

Strive for “autonomy and control”

“This time, the chip shortage has exposed the weakness of China’s auto manufacturing sector.” A senior industry personage said that the vast majority of current automotive chips rely on imports, the more difficult the technology is, the more complex the chips, the more dependent on imports.

Experts said that at present, China’s automotive semiconductor industry development challenges are still severe, the lack of standard system and verification means, especially in the car regulation level chip is more obvious; The domestic automobile industry is short of comprehensive original innovation ability, including the key component enterprises that play a link between the vehicle and the chip industry. In the chip industry, domestic chip companies with vertical integration capabilities are still needed to break the gap between the automotive and chip industries.

Li Shaohua believes that in order to achieve autonomous control of China’s car regulatory chip, it is necessary to improve the technical system of standards and regulations and promote the integrated development of the industry. Focusing on key fields such as new energy and intelligent network, we will create a good environment for the coordinated development of the chip industry and the automobile industry, and form a good pattern of breakthroughs and coordinated development for various chips such as storage, computing and control.

Cui Dongshu suggested that the establishment of accurate industry prediction system should be promoted to increase the chip inventory reserves, in order to resist risks; Strengthening standard formulation and increasing the supply of domestic chips will further stabilize the supply chain of China’s automobile industry.

Xin Guobin, vice minister of industry and information technology, said that the recent shortage of automotive chips is not only a global common problem, but also reflects the deep contradictions of China’s lack of independent supply capacity. As an important component related to the core competitiveness of the industry, automotive chips need to be developed and safe in an overall way, adhere to the combination of far and near, and promote systematically, so as to enhance the level of the whole industrial chain and strongly support the high-quality development of the automotive and semiconductor industries.

“To promote the domestic application of car standard chips, a protection mechanism should be established from the perspective of overall development.” Li Shaohua said that the protection of research and development achievements, the development of independent and controllable, should also increase the “introduction” of chips. The shortage of automotive chips and the localization of automotive chips will still be the obvious shortcoming of China’s automotive industry chain in the long term. Accelerating the autonomous and controllable development of China’s automotive industry chain will be the top priority.

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