Today, with the rapid changes in global technology and market environment, China's automotive chip industry is facing unprecedented challenges and changes. At the beginning of July in Mingyue Lake, Chongqing, Xu Chaobing, assistant to the chairman of Hangzhou Silergy Corp. Semiconductor, discussed in depth the current pressure and development opportunities faced by China's automotive chip industry at the docking meeting with Chang'an, Cialis and other senior executives, and revealed the key nodes of industry transformation for us. Chen Lu, editor-in-chief of China Exportsemi Web, attended the matchmaking meeting and brought reports and thoughts on the industry.
The status quo of the industry: challenges and pressures coexist
In recent years, the global automotive industry has faced unprecedented challenges, especially in 2022, when China's automotive chip industry was deeply affected by multiple adverse factors such as supply chain disruptions, market demand fluctuations, and international trade tensions. According to data from the China Association of Automobile Manufacturers, in the first half of 2022, China's auto production and sales fell by 3.7% and 4.2%, respectively. The decline in automobile production and sales has directly affected the chip supply chain, putting the entire industry under huge supply and demand pressure, which in turn has led to a global semiconductor shortage that has forced many automakers to reduce production or postpone the release of new models, and these factors have exacerbated the imbalance between chip supply and demand.
Specifically, affected by the epidemic and global economic uncertainty, many automakers have adjusted the pace of orders, resulting in sharp fluctuations in chip demand. In addition, the instability of the international situation has further exacerbated trade frictions, putting heavy pressure on the Chinese market, which relies on imported chips. These challenges have forced China's automotive chip industry to accelerate its transformation and seek new growth points.
Figure: Xu Chaobing, assistant to the chairman of Hangzhou Silergy Corp. Semiconductor, delivered a speech
Silergy Corp.'s Contrarian Breakthrough: A Model of Innovation and Resilience
Against this difficult backdrop, Silergy Corp. has demonstrated remarkable resilience and innovation. Although the sales of Silergy Corp.'s listed companies will drop to about 3.5 billion yuan in 2023 from about 5.5 billion yuan in the previous year, the company still overcame many pressures to maintain positive profits. Compared with other companies in the industry, this performance is particularly impressive, and most semiconductor companies in the A-share market will face an accelerated decline in performance in 2023, with large-scale declines in sales and profits, and negative profits abound. Silergy Corp. has demonstrated strong market competitiveness and resilience through excellent technological innovation and strategic market layout.
Silergy Corp.'s success is inseparable from its emphasis on technological innovation. As an industry leader, the company has achieved seamless connection between its own process and wafer fabs and packaging and testing factories through the successful operation of the virtual IDM model, and with the gradual mass production of 12-inch 90nm wafer process, Silergy Corp. has a unique advantage in terms of production capacity that other competitors do not have, and this technical advantage has also laid a solid foundation for its expansion in the global market.
Global layout and strategy: occupy the commanding heights of the market
The global layout of Silergy Corp. is also one of its important strategies to respond to market changes. The company has branches in 31 regions around the world, and has a supply chain layout in Southeast Asia and other countries. This globalization strategy not only enhances the company's market competitiveness, but also enables it to respond more flexibly to the uncertainties caused by international trade frictions.
Through its global layout, Silergy Corp. has become one of the few chip design companies that provides dual-chain supply chips, which reduces logistics costs and effectively faces the entry barriers caused by geopolitics, while also improving the response speed to customers.
Policy support and market demand: double engine to drive the development of the industry
In recent years, the Chinese government has introduced a series of policies to support the development of the semiconductor industry. Tax incentives, financial support, R&D investment and other measures have provided a strong policy guarantee for the innovation of China's automotive chip industry. These policies not only reduce the operational pressure of enterprises, but also encourage more innovative research and development, and promote the technological progress of the entire industry.
In addition, the rapid development of China's automobile market has provided a strong market demand for the chip industry. According to market research institutions, by 2025, the size of China's automotive chip market will reach more than 100 billion yuan. With the popularization of emerging technologies such as intelligent driving and Internet of Vehicles, the demand for chips in automobiles will continue to grow, which provides a broad market space for the development of China's automotive chip industry.
Conclusion: China's automotive chip industry to meet opportunities and challenges
China's automotive chip industry is in a critical period full of challenges and opportunities. As a leader in the industry, Silergy Corp. Semiconductor has demonstrated its strong competitiveness and resilience through technological innovation, global layout and industrial chain integration. In the face of the current challenges, Silergy Corp. has not only bucked the trend, but also set an example for the entire industry.
Driven by the support of national policies and market demand, China's automotive chip industry is expected to overcome the current difficulties and usher in a brighter future. Silergy Corp.'s successful experience not only provides a useful reference for other enterprises, but also lays a solid foundation for the long-term development of China's automotive chip industry. In the future, we have reason to believe that China's automotive chip industry will occupy a more important position in the global market and help China's automotive industry achieve high-quality development.
