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Recently, many foreign media reported that Intel announced plans to lay off 15% of its employees, affecting about 15,000 jobs. As a world-renowned supplier of automotive semiconductor products, this decision immediately aroused widespread concern in the industry about the stability of automotive chip supply.

Jack West, vice president and general manager of Intel's automotive business unit, once publicly stated that the company has provided infotainment system chips for more than 50 million vehicles, and that 18 automakers have adopted Intel's technology in their electric vehicles and software systems. The announcement of the layoff plan has undoubtedly brought new uncertainties to automakers.

According to the report of China Economic Research Institute, automotive chips mainly refer to semiconductor products used for automotive electronic control and vehicle systems, including main control chips, MCU functional chips, power chips, storage chips, analog chips and sensor chips, etc. At present, domestic companies have a certain share in the low-end and mid-end markets, while the high-end market is mainly dominated by foreign companies such as NXP and Infineon.

As the automotive market moves towards an advanced stage of intelligence, the demand for intelligent driving chips such as high-performance computing chips and image processing units is growing year by year. In this field, overseas companies such as Qualcomm, NVIDIA and Intel, as well as domestic companies such as Huawei, Black Sesame Intelligence and Horizon Robotics are competing fiercely.

In the first quarter of 2024, the performance of overseas companies' automotive chip businesses varied. Specifically, Qualcomm achieved revenue of US$598 million, a year-on-year increase of 31%, accounting for 6.02% of total revenue; Nvidia's automotive business revenue reached US$329 million, accounting for 12.7% of total revenue; while Intel's automotive business subsidiary Mobileye's revenue in the same period was US$239 million, a year-on-year decrease of 48%. Domestically, although Huawei's smart car business grew by 128.1% year-on-year, it is still in a loss-making state; Black Sesame Intelligence and Horizon Robotics also face similar financial challenges.

In fact, since 2024, many leading manufacturers in the automotive chip market, including Texas Instruments (TI), STMicroelectronics (ST), and Renesas, have generally faced challenges, with the automotive market segment performing poorly and demand recovery falling short of expectations. For example, STMicroelectronics' financial report shows that in the first quarter of 2024, it achieved operating revenue of US$3.47 billion, a year-on-year decline of 18.4%; gross profit margin of 41.7%, a year-on-year decrease of 8 percentage points; net profit of US$513 million, a decrease of 50.9%.

At present, the chip market is facing the problem of increasing structural differentiation of market demand. Tao Yang, an analyst at Qunzhi Consulting, said: "This is mainly due to the structural surplus in the industry. The market is currently in a stage of oversupply." In particular, general-purpose chips such as MCU and PMIC are prone to inventory backlogs when the overall market growth slows down due to their relatively low threshold and low process requirements.

Another view is that the new energy vehicle market is entering a more stable growth phase, rather than the previous explosive growth, and sales have not met expectations, which is also a key factor causing the current market inventory backlog. According to data from iiMedia Research, the global new energy passenger vehicle market will exceed 10 million vehicles in 2022 and is expected to grow to 17.5 million vehicles by 2024.

Although the global new energy vehicle market has slowed down, the Chinese market is still strong. According to the latest data from the China Passenger Car Association, in July 2024, the domestic retail sales of conventional fuel vehicles were about 840,000 units, while the retail sales of new energy vehicles were about 878,000 units. The monthly retail sales of new energy passenger vehicles in China exceeded those of fuel passenger vehicles for the first time.

As intelligent technology becomes a new focus of new energy vehicle development, coupled with the active investment of automobile companies in end-to-end solutions and pure vision intelligent driving technology, the market demand for chips with high performance and high computing power will continue to grow, especially in the fields of high-end automotive chips such as advanced driver assistance systems (ADAS), smart cockpit system-on-chip (SoC), vehicle image sensors (CIS) and lidar sensors.

According to a report by IC Insights, the global semiconductor market is expected to exceed $1 trillion by 2030, with the market share of automotive chips increasing from 10% to 15%. In the Chinese market, Gasgoo Automotive Research Institute predicts that by 2030, the scale of China's automotive-grade chip market will reach about $300 billion, or more than 200 billion yuan.

Daily Economic News