After two years of preparation, BYD Semiconductor has postponed its IPO. Car companies should not make their own chips?

 In the second half of 2022, on the one hand, car companies are constantly pushing new cars, pushing out new cars that have been delayed due to various reasons in the past few years, and on the other hand, they are constantly seeking cooperation. In key areas, more and more car companies have chosen to gnaw hard bones by themselves, including the field of chip semiconductors.

Ideal reported self-developed semiconductor chips, Great Wall sought cooperation to establish a semiconductor company, Geely also carried out chip joint venture production, and BYD, which is at the forefront of self-developed chip semiconductors among car companies, has recently stepped on the brakes. Last week, BYD released Announcement, the company's board of directors and board of supervisors agreed to terminate the promotion of the spin-off and listing of BYD Semiconductor Co., Ltd., and withdrew the relevant listing application documents, and the spin-off and listing of BYD Semiconductor came to an abrupt end.

Is the prosperity of BYD IGBT coming to an end?

This seems to be in sharp contrast with BYD, which is at the forefront of the chip semiconductor field, and it is even incomprehensible. Every move of BYD has been concerned and sought after by the capital market. The process of splitting and listing BYD Semiconductor has been developed for nearly two years. The road has been quite unsatisfactory. This time, BYD Semiconductor terminated its listing. The official explanation is that due to the rapid growth of new energy vehicles, the supply of chips is seriously insufficient, and wafer production capacity has become a bottleneck in the production capacity of automotive-grade power semiconductors. choices made. As for what in-depth content can be seen from it, let's continue to look down.

BYD Semiconductor has been deeply involved in the field of automotive-grade chips for more than ten years, and has achieved localization in the field of IGBT and SiC. Especially in the context of the chip shortage in the past two years, while complying with the national trend of developing chip technology, BYD, which has self-developed a variety of chips, not only allows its own products to have sufficient chips, but also supplies them to other car companies. It has indeed tasted the sweetness.

The technology is mediocre + the big brothers are back, and it is useless to have cost performance?

However, starting from the second half of 2022, the chip shortage began to be alleviated. Here are the specific reasons for the relief of the chip shortage. We have analyzed it many times before, but we did not specifically talk about which type of chip the shortage was.

Chips such as high-end autonomous driving and smart cockpit have never been in short supply. Because the profit margin of a single chip is high, car companies are scrambling to get it, and there is no industry competition. Therefore, manufacturers are very willing to guarantee the production of these chips. Low-level IGBT and other chips have low profits and high substitutability, and the competition in the industry is fierce. When there is no shortage of chips, and everyone is still engaged in price wars, then when faced with some uncertain problems, this part will naturally reduce production. , was temporarily abandoned strategically.

It is also because of the production reduction of Infineon, NXP, Renesas, Texas Instruments and STMicroelectronics that the chip shortage has caused BYD IGBT to rise. Because before the middle of 2021, BYD Semiconductor's Ningbo Semiconductor Four companies including Changsha Semiconductor, Energy Saving Technology, Changsha Semiconductor, and Xi'an Semiconductor, Changsha and Xi'an Semiconductor had no real income. At that time, BYD Semiconductor's business was almost all supported by Ningbo Semiconductor and Energy Saving Technology.

The chip shortage of low-end chips made BYD's production line busy, and then created the reputation of BYD Semiconductor in today's world. Of course, this is related to its early entry, early layout, and the so-called favorable time and place. But other If a company wants to play like BYD, the probability of success is very small, because the times have changed and the chip shortage is almost over.

When Infineon and Texas Instruments resumed their productivity and the low-end IGBT and other chip markets gradually stabilized, BYD's 4.0 products gradually lost their advantages. IGBT chips, whose technology is still monopolized by foreign manufacturers, especially Infineon's seventh-generation products, have higher power density, higher junction temperature and lower temperature rise, and are almost invulnerable in this field. Products, expensive high-end models will naturally give priority to such products.

Moreover, not only BYD Semiconductor, but all domestic chip manufacturers are facing the same problem, that is, the fact that they entered the market relatively late. Advanced technology and low prices are the advantages of manufacturers such as BYD, but car companies are more willing to trust their own. Old friends, due to the relatively high threshold of the automotive semiconductor supply chain, car companies trust their usual supply chain system more, and this supply structure is very difficult to break.

When the chip shortage was at its worst, some German manufacturers did not provide two keys for the new cars they delivered, and even some cars simply stopped production because they lacked the dedicated chip for the ESP module. Where is the chip for the key? It is almost the simplest car-standard chip. There are so many manufacturers of ESP, why wait for a product from one manufacturer? In fact, trust in the supply chain is a very important part. If car companies are not facing major business adjustments or strict cost control, they will generally not look for other suppliers.

For car companies such as BYD, Great Wall, and Geely, which make their own chips, this is the embarrassment. Your products can be used by yourself, and other manufacturers will be particularly cautious. Therefore, in terms of winning the trust of new users, new entrants It is not easy to break the situation, don't be overwhelmed by the short-term "prosperity".

Therefore, through our analysis above, you can see that when the supply chain tends to be normal and the relationship between supply and demand gradually stabilizes, it is not a cost-effective thing for car companies to develop some low-end chips by themselves. There are as many dealers as there are, and they are of high quality and low price. The car company bought a big stall by itself, and tasted the sweetness temporarily, and then it may get deeper and deeper. For BYD Semiconductor, which started early, has a large scale, and The core-making forces of car companies that are becoming more mature have calmed down, and other car companies must be even more calm.

There is still light on the road of high-end chip design

Of course, car companies should also find out where they should make their own efforts. In the second half of the year, it was reported that Ideal, BYD, and Weilai are all developing their own self-driving chips. I think this happens to be what car companies should develop. The point of strength, because it is easy to find substitutes for low-end chips, and even you can make them very well, while high-end chips are often stuck due to conflicts of interests in some big countries, and it may be the kind that makes you slump. The neck is stuck. Before the United States restricted the export of self-driving cloud computing chips such as Nvidia A100, car companies began to live by stockpiling goods, which made everyone see the urgency of this aspect.

It is estimated that we will need a long time to make a breakthrough in the manufacture of high-end chips, but chip design is the focus of our efforts. Designing high-process chips is also an important core technology. As long as you can design it, someone will help you. You mass-produce, after all, even Nvidia does not produce its own chips, and the core technology is in its hands. With the further development of intelligence, it is even more urgent for car companies to self-develop and design high-end chips.

Summarize:

The termination of BYD Semiconductor's IPO can actually be seen as a calm performance of the core-making forces of car companies after the chip shortage has eased, and it also sounded the alarm for other car companies who have plunged into the market. , but your products need to be cost-effective enough, and the most difficult to have trust. As the only profitable car company in the field of self-owned brand new energy, BYD's step on the brake may also have other meanings, so I leave it to everyone to think about it.