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March 28 news, according to the Economic Daily News reported that the Chinese mainland car manufacturers cut prices to grab the market impact on the automotive chip industry, including BMW, Geely and other indicators of car manufacturers recently for the power management IC, MOSFET, microcontroller (MCU) and other originally hot chips cut orders and asked suppliers to reduce prices, involving Silicon Power Jie, Hon Hai to invest in Fudin, Huaxin Lihua Group's Xin Tang and other manufacturers to accept orders.

In addition, Geely even drastically cut the head-up display (HUD) orders, the fear of making Pucheng, Elysium and other related supply chain shipments kinetic energy hindered.

It is understood that at this stage, there are more than 40 domestic car brands and about 100 models to start price reduction promotions, the price war fever, the supply chain cut orders and kill the price situation more white-hot.

However, according to the latest statistics released by the Passenger Association on March 15, the price cuts have attracted consumers to inquire in shops, but at the same time consumers are also in a wait-and-see mood. From March 1-12 this year, the domestic passenger car market retailed 414,000 units, down 17 per cent year-on-year and 11 per cent compared to the same period last month, with weekly retail sales of passenger cars falling year-on-year and year-on-year. Cumulative retail sales so far this year are 3.094 million units, down 19% year-on-year.

The Association pointed out that although the car market gradually rebounded after the Spring Festival, confidence in the car purchase service market, which relies strongly on offline contacts, was boosted significantly through regional stimulus policies. However, judging from the first two weeks of March, the conversion rate of terminal traffic was not high and consumers were in a wait-and-see mood.

A series of chain reactions gradually emerged, triggering industry discussions on the sustainable and healthy development of the automotive industry.

The latest survey by Morgan Stanley (Morgan Stanley) even revealed that major automotive brands have started to cut orders, causing automotive semiconductor suppliers to come under price pressure. On the other hand, automotive semiconductors, automotive components, batteries, aluminium parts and other related areas have also started to face price cuts.

Suppliers have also recently pointed out that ON Semiconductor, a major automotive chipmaker, is reviewing its inventory for repeat orders from customers.

According to the survey, car manufacturers have recently started to cut orders and put price pressure on automotive semiconductor suppliers, which will also expose the automotive semiconductor supply chain to a crisis that has not occurred in the past two to three years.

The survey warned that, overall, the "Tech Deflation" trend in recent years has helped to push up demand, but for the automotive semiconductor industry, gross margins may be compressed as a result. At present, automotive power management IC manufacturers have begun to face pressure to reduce prices, and an overview of various types of automotive electronic components, only IGBT (Insulated Gate Bipolar Transistor) currently maintain the boom.

Two years ago, the global chip shortage, automotive MOSFETs in the past 18 months all the way to demand, when almost all the world's major suppliers will be directed to the production line of automotive products, crowding out non-automotive MOSFET output, resulting in prices soaring, Fudin, large and medium MOSFETs factory followed the fragrant drink pull. Now that automotive MOSFETs are no longer in tight supply, prices are under pressure, and related Taiwanese factories are afraid to escape the impact.

At the same time, the automotive power management IC market also swung away from the supply shortage, the high boom in prices soaring, unfavorable to Silicon Power Jie and other suppliers after the market. According to client conditions, inventory adjustments are expected to be completed in the first half of the year, and the second half of the year will see a gradual resumption of stock pulling.

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