Automotive chips: Prices plummet, inventories rise
Entering 2023, automotive chips, which once experienced skyrocketing prices, are no longer in short supply. By the end of 2023, some automotive chips have begun to experience a surplus. Major automotive chip manufacturers such as NXP and ON Semiconductor have also begun to issue inventory warnings. Morgan Stanley also pointed out that demand for power management ICs (PMICs) and MOSFETs continues to be weak, with demand for automotive MOSFETs from global IDM manufacturers plummeting.
The “surplus” of automotive chips is particularly obvious in the spot market. Popular Internet celebrity chips that were once high-priced have now fallen to normal prices, or even upside down. But looking at the entire automotive chip industry, “excess” may only be a relative term. The performance of major automotive chip manufacturers in 2023 is better than that of other original manufacturers. Some of their “downturn warnings” are more compared with the abnormal growth rate during the outbreak period of the previous two years. In the long term, there is a structural shortage of automotive chips, and the risk factors of shortage are still there, but it is difficult to reach the level of comprehensive shortage again.
Infineon: Revenue and profits hit new highs
Infineon’s revenue in fiscal year 2023 (as of September 30, 2023) was 16.309 billion euros (approximately RMB 127.133 billion), a year-on-year increase of 15%; profit reached 4.399 billion euros, a year-on-year increase of 30%; the profit margin was 27 %, Infineon set a new record for revenue and profit in fiscal year 2023.
Infineon said its environment remains challenging. On the one hand, the structural growth momentum of semiconductors in renewable energy, electric vehicles (especially in China) and microcontrollers for the automotive industry remains unabated. On the other hand, demand for consumer goods, communications, computing and IoT applications is in a short period of downturn. Overall, revenue is expected to continue growing in fiscal 2024, but at a slower pace.
Renesas: Full-year revenue expected to decrease year-on-year
The latest financial report released by Renesas Electronics shows that in the third quarter of fiscal year 2023, the company achieved revenue of 379.4 billion yen (approximately RMB 18.307 billion), a year-on-year decrease of 2.1%; operating profit was 98 billion yen, a year-on-year decrease of 16.8%. The same period last year increased by 50% year-on-year. In the first nine months of 2023, Renesas Electronics’ revenue reached 1.11 trillion yen and operating profit was 318.5 billion yen. Overall revenue is expected to reach 1.46 trillion yen in 2023, a decrease from last year’s revenue of 1.50 trillion yen.
Autonomous driving giant Mobileye: Inventory is as high as 6 million to 7 million units
Mobileye, an autonomous driving company owned by Intel, warned that the company’s revenue in the first quarter of 2024 will fall by 50% compared with the same period last year, due to excessive customer chip inventories, resulting in an annual outlook that falls short of market expectations.
Mobileye said that after finalizing estimated orders for 2024 with its first-tier customers, it found that its customers already have excess inventory. Currently, the inventory of EyeQ® system integrated chips (SoC) is as high as 6 million to 7 million units. Mobileye believes that the excess inventory is mainly due to the automotive chip supply chain crisis that occurred from 2021 to 2022, which led first-tier customers to build inventory to avoid parts shortages. At the same time, the output of some car companies in 2023 was lower than expected.
As supply chain issues ease, Mobileye expects its customers to prioritize inventory products in 2024, which will result in Mobileye’s revenue in the first quarter of this year being significantly lower than in 2023.
Qualcomm: Automotive business expansion
Qualcomm CEO Anmon said that by 2026, the sales of its automotive division will reach approximately US$4 billion. By 2030, revenue will increase to $9 billion. Since Anmon took over as CEO in June 2021, diversifying revenue sources has been an important part of his tenure. Qualcomm is selling more chips that handle driving and entertainment functions in vehicles, as well as processors for everything from personal computers to headphones. It hopes to maintain growth as the smartphone market matures.
NXP: Revenue in 2023 is expected to be the same as in 2022
The median revenue guidance for Q4 in 2023 is US$3.4±100 million, with the median guidance rising 3% year-on-year and declining 1% quarter-on-quarter. The full-year revenue in 2023 is expected to be the same as in 2022, and revenue is expected to resume year-on-year growth in 2024. The gross profit margin in 23Q4 is expected to remain unchanged at approximately 58.5% quarter-on-quarter.
Looking at the downstream market, the automotive business in 23Q4 was flat month-on-month, the mobile business increased month-on-month, and the communication infrastructure business will decline year-on-year. Q4 internal factory utilization is expected to be in the low to mid-70% range and will remain at this level until internal inventories normalize. The company’s automotive business is expected to complete inventory reduction in 24H2, and China’s local analog chips may bring more competition.
