Looking around at the present, the epidemic dividend dissipated, coupled with the impact of global hyperinflation, consumer electronics as the representative of the multi-terminal market demand shrinkage, resulting in a sharp rise in supply chain inventory difficult to digest, the market weakness is difficult to reverse, the semiconductor market into a downward cycle.

In the face of customers' big moves to amend wafer casting orders, foundries have slowed down their investment/expansion progress, while actively adjusting their product portfolio to find a new round of growth tracks.

Automotive track first among them

Foundries are actively laying out the automotive chip track, for the following reasons.

Automotive market increment is large, production capacity continues to be tight: the overall size of the automotive chip accounts for 10% of the overall IC market up and down. But with the automotive industry towards intelligent, electrification and other trends upgrade transformation, automotive chip demand is exploding growth.

On the other hand, compared to the weak trend of the consumer electronics market, the chips required by the automotive industry are still tight, such as automotive-grade MCU, interface chips, power supply chips, power semiconductors, etc. The supply-demand conflict is still very tight, still facing shortages and premiums.

Industry chain model adjustment: automotive chip is a highly competitive and long dominated by the European and American IDM manufacturers "wolf zone", foundries in the past in the field of automotive chip investment and business expansion will always be insufficient. But with the upgrading of the automotive industry, chip usage is growing, and the main control chip, AI chip, as well as digital cockpit, autonomous driving and other chip processes are evolving in the direction of high computing power and advanced processes, traditional automotive chip suppliers to provide the chip is increasingly difficult to meet the host factory for the product iteration speed, cost and performance requirements, prompting the foundry's business focus also began to tilt to the field.

After the "core shortage wave", the automotive industry chain is reshaped: In the past year or so, many automotive companies have limited their vehicle production capacity due to the "core shortage" problem. Therefore, OEMs who understand the importance of the supply chain began to choose to skip Tier1 and other intermediate manufacturers, directly with chip companies and foundries to reduce the risk of chip supply.

Driven by multiple factors, foundries began to see the automotive chip market, have increased layout efforts.

TSMC, Samsung two master the cutting-edge advanced manufacturing process of the wafer foundry fully benefit.

In May this year, NXP announced the use of TSMC 5nm process to build a new generation of S32 series of automotive processors. At the same time, it announced that it has cooperated with TSMC to develop 5nm ASIL D security grade SoC chips; in addition, Qualcomm, Nvidia and other manufacturers launched digital cockpit and autonomous driving chips are dependent on its advanced process, and some products have been mass-produced and installed in vehicles.

In the MCU field, automotive MCU produced by TSMC has occupied about 70% of the market share, Infineon, ST, NXP, TI, Renesas Electronics and other major suppliers of MCU using TSMC foundry. SMIC and Hua Hong are the main domestic MCU foundries.

Last year, TSMC also launched the N5A process, which it claims is the world's most advanced automotive semiconductor technology and is being certified to the automotive industry's stringent quality, reliability and functional safety standards, including AEC-Q100, ISO 26262 and IATF16949, and is expected to be released in the third quarter of 2022.

Data shows that TSMC's revenue from the automotive segment grew 64% year-over-year in 2021, ranking first in all industries.

At a time of relative weakness in cell phones and consumer electronics, Lin also suggested car manufacturers and automotive chip makers to build buffer stocks and plan capacity well in advance to avoid chip shortage problems.

Talking about the future development of the automotive market, Lin Zhenming is optimistic about the three major development trends of ADAS, automotive communication system upgrades, and domain controllers, and he believes that these three trends will continue to increase the amount of automotive semiconductors in the future.

Samsung: planning a new automotive chip factory

Samsung is also one of the beneficiaries of advanced process automotive chips. Among them, Amba to smart cockpit as the main battlefield of the 5nm CV5 chip, and following the Tesla HW 3.0 processor 7nm HW 4.0 orders are built by Samsung foundry.

In April 2021, in order to alleviate the shortage of chips, Samsung helped Telechips Semiconductor Design in South Korea to successfully test-produce 32nm automotive-grade MCU, which is the first self-developed automotive-grade MCU product in South Korea.

UMC: take the key certification, through the first tier of major manufacturers

For the layout of automotive chips, UMC emphasizes that in the company's operational planning, automotive chips are indeed one of the focus areas and spindles for the layout of special processes.

UMC's official website shows that its automotive process covers 0.5μm to 22nm, including logic, high-voltage process, BCD process, embedded non-volatile storage and MEMS technology for intelligent cockpit, ADAS, body control, infotainment and other applications.

The supply chain pointed out that UMC has obtained Infineon, NXP, Texas Instruments, Microchip Technology and other automotive chip makers large orders, these customers in the global automotive chip market share of more than 30%, UMC shouted "how much capacity are received. UMC has never commented on customers and orders, it stressed that the automotive market demand is still very strong, not only this quarter capacity utilization rate of more than 100%, continued to exceed demand, is expected to the end of this year, supply and demand will also continue to maintain such a strong situation.

Microchip: Expansion of automotive chip production capacity

In 2021, Gracore's automotive chip shipments have more than doubled from 2020, but this is still not enough to meet the market demand. Gecore plans to invest more than $6 billion in global factories to increase production for automotive chips, but it will take time to see results.

Powerchip: Automotive market will be the next mainstream trend

According to the power accumulation electricity chairman Huang Chongren revealed, and TSMC president Wei Zhejia discussed the topic of automotive semiconductor business opportunities, the two believe that automotive chips are less than 14nm advanced process, most or more than 28nm mature process, so we all have opportunities, and bring more business opportunities than cell phones. Huang Chongren, the future of the car in AI, automation applications will be more and more, the automotive market will be the mainstream trend to drive the next wave of chip design and foundry.