Volkswagen will stop production today! 'Lack of core' will affect the production capacity of one million!

The tight global supply of semiconductor chips has finally spread to the automotive industry.

Yuguan Auto Market confirmed: Since the beginning of December, some auto companies have started to stop production one after another, and the shutdown trend is spreading. In the last month of 2020, most of the domestic mid-to-high-end and above auto manufacturers are facing the risk of production suspension.

The turmoil of the suspension of production started from the North and South Volkswagen. 'I can hold on to it today. From tomorrow (December 4), production can only be discontinued,' said Xiang Yuguan, the head of production at SAIC Volkswagen. The Yuguan Auto Market has learned that FAW-Volkswagen will also enter a state of suspension from early December.

The combined output of the two Volkswagens in December alone exceeded 200,000 vehicles. As for when production will resume, it is not yet known.

Yuguan Auto Market has learned that the main reason for the suspension of production of North and South Volkswagen is the insufficient supply of chips and high-end semiconductor chips. That is to say, the most obvious impact is the positioning of mid-to-high-end and above models. According to incomplete statistics from Yuguan Auto Market, the production capacity affected in December alone exceeded one million vehicles.

Under the influence of the epidemic, global chip suppliers ushered in a wave of shortages. “Initially, chips were nervous. In addition, the Southeast Asian chip assembly plant has stopped production due to the epidemic, which directly affected the supply of semiconductor chips.” According to people familiar with the matter, especially in the high-end field of chips, in addition to the automotive industry, Huawei was also on the market before. Large-scale procurement, therefore, has led to no procurement at all, and the world is rushing for resources.

The shortage of chips has made it impossible to produce ESP (Electronic Stability Program System) and ECU (Electronic Control Unit), the two major modules of on-board computers. The main domestic suppliers are Continental and Bosch, two component suppliers. Affected by the cut-off of chip supply, the two component giants are also facing the risk of suspension of the business.

Yuguan Auto Market learned that the current inventory of Continental's ESP (Electronic Stability Program System) is only about 10,000 sets, which can no longer meet the needs of the market. Yuguan Auto Market learned from the above two parts giants that, according to the current situation, nearly 15% of China's auto production capacity is affected. In 2019, China's automobile production capacity was 2.683 million units. According to this calculation, if the supply cannot be resumed, the annual production capacity of 4 million vehicles will be affected.

'It should be said that high-end products, as long as the products equipped with ESP and ECO will encounter capacity problems, because Volkswagen's own products are equipped, so the impact is the greatest.' An insider of Volkswagen revealed.

An insider of the Geely Group revealed: 'Everyone is fighting for chip resources for their own, to minimize the impact. Now it's up to who can get more resources.'

In contrast to the shortage of chips, chip supplier prices have begun to rise. On November 30, Japanese semiconductor manufacturer Renesas Electronics (Renesas Electronics) sent a product price increase notice to customers, the effective date of the price increase is January 1, 2021. Renesas Electronics is one of the top ten semiconductor chip suppliers in the world and the preferred supplier of advanced semiconductor solutions.

The notice stated that Renesas Electronics intends to increase the price of some analog and power products due to the increase in the cost of raw materials and packaging (substrate). Renesas Electronics also explained that in the near future, the company is facing increased inventory, cost, and product transportation risks, which have forced the company to raise prices to ensure that these products can continue to be put into production.

In addition, the notice also stated that customer orders shipped before January 1, 2021 will be received at the current price. After January 1 next year, all existing orders and new orders will be processed at the new price.

Q4 is the traditional peak season for chip supply, and every time it faces tight supply. People familiar with the matter believe that, to a certain extent, it is also a trick used by chip suppliers to ensure the stability and even continued high rise of chip prices in the coming year.

However, it is clear that this year's impact will be the greatest. People familiar with the matter disclosed that it was only a tight supply before, and it has not yet stopped production. Even when the tsunami occurred in Japan, production was not stopped, and this year is the most special year.

The chief analyst of Semiconductor Research, Semiconductor Research, called on his circle of friends: As the wave of car companies' suspension of production is about to erupt, it has also exposed the problem of the upstream layout of the chip. Now the semiconductor manufacturing, packaging and testing industry chains are all tight, and chip prices are rising. Production capacity has been tight for a few years, and the industry has been calling for it for a few years. Why is this still the case? The production capacity of the semiconductor supply chain is tight and hopes to attract great attention.

As for whether the large-scale suspension of production by auto companies will cause fluctuations in car prices in the end market, Yuguan Auto Market believes that it is not absolute. For example, companies with a lot of inventory in the past took advantage of this opportunity to digest inventory, and the suspension of production would not have a big impact on the terminal; but some auto companies would face the situation of being unable to deliver vehicles if they did not have much inventory. Yuguan Auto Market has learned that some companies go to the market to purchase and stock goods at high prices in order not to affect production. Under the circumstance that auto market prices cannot be adjusted in the short term, the cost pressure on auto companies will increase as a result.