China Automobile Association Xu Haidong: Domestic automotive chips should focus on processes above 28nm

China and Africa, June 21. The auto chip shortage that broke out at the end of last year is still spreading. Consulting firm AlixPartners predicts that the global "shortage of cores" will result in a loss of US$110 billion in revenue for automakers this year. Reduced by 3.9 million vehicles, accounting for approximately 4.6% of global automobile production.

The impact of chip shortages on the automotive industry continues. However, Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, pointed out that the impact of chips is short-term. Annual sales will not cause excessive impact.

From the perspective of the domestic market, the domestic auto market’s production and sales declined in May this year compared to the previous month. The China Automobile Association believes that the biggest problem with the decline in sales in May is the chip problem. The impact of the chip shortage on the company’s production may focus on the second quarter. . During the 2021 China Automotive Forum, Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, said in an interview with the media, "At present, the impact of chip shortage should be a short-term impact, and the impact on sales in the first half of the year should be within 10%. It is expected that there will be relief from the third quarter, especially the fourth quarter.”

In a recent interview with the media, Xu Haidong pointed out that the shortage of chips was mainly affected by panic stocking. Everyone's orders were double, two and three times higher than the original, resulting in a serious shortage of foundry capacity. Although there have always been news of automakers stopping production and reducing production, in fact, up to now, no manufacturers have completely stopped production. The output of new energy vehicles is relatively small and the impact is relatively small.

He emphasized that China does have shortcomings in terms of chips, but it may take 2-3 years to make up for it, and it may not be possible to make up for it. Unlike consumer electronics, which use 7 nanometers and 5 nanometers, automotive chips are now 14 nanometers or even more than 28 nanometers. There is no problem in using them in the automotive industry. Therefore, for automotive chips, the country should mainly address the production of chips with processes above 28nm, and it is believed that it can catch up within two or three years.

Nevertheless, the semiconductor industry is a globalized division of labor. If each country or region has to develop its own semiconductor industry, the cost of chips may be much higher than it is now. “We may not be able to achieve the current level of cost, but from the perspective of supply chain security, sometimes the cost is higher and we also need to bear it. It is not even just the semiconductor industry. In the future, for strategic security, the country must still do something. It can control the strategic asset industry.” Xu Haidong said.

According to the statistical analysis of the China Association of Automobile Manufacturers, in May 2021, the production and sales of passenger vehicles were 1.617 million and 1.646 million, down 5.7% and 3.4% month-on-month, and down 2.7% and 1.7% year-on-year, compared with the previous month. , The growth rate changes from positive to negative.

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