Major automotive chip IDMs including Renesas and Onsemi reportedly have moved to reduce orders placed with testing houses, sparking concerns about whether demand for automotive chips, which has been strong despite market headwinds, is about to undergo a correction. Nevertheless, industry sources said there is still quite a distance to an oversupply of such chips.
The sources said the IDMs are adjusting orders probably only for some mature-process automotive chips or power components whose supply has become sufficient, aiming to adjust their inventory to healthier levels.
Actually, they continued, there are still no clear signs of a downturn in demand for automotive chips, given that carmakers have yet to slow down their shipment pull-ins of the chips, which they think are still in short supply.
Automotive clients are showing different pull-in momentum for different ICs and components. Usually, they will not rush to take shipments of components already well stockpiled, but will increase order placements for those still in shortage, the sources noted.
According to IC designers, lower-end MCUs and power semiconductors are relatively in sufficient supply, but chips supporting new functions, as well as high-end MCUs, ADAS, AI and sensor chipsets continue to see shortages.
Automotive chips come in a wide diversity, and their supply and demand can hardly be gauged in the same manner, the sources said, adding that new automotive technology and solutions continue to emerge with constant upgrades in specific functional modules, resulting in persistently strong demand for automotive chips.
For example, the sources said, many display driver IC (DDI) vendors are actively engaged in the automotive applications to cash in on the growing demand for automotive DDIs, TDDIs and even OLED DDIs driven by upgrades of automotive panels and dashboards, enabling them to offset their decreases in shipments for consumer applications amid sluggish terminal market sentiments.
The sources said the automotive semiconductor market is likely to slow down or decline due to impacts of unfavorable macro environments. But compared to other applications, automotive electronics have yet to see a correction in demand and instead witness the development of new technologies and applications, they said, stressing that for most semiconductor players, automotive applications will remain a segment promising relatively stable growth potential and shipment momentum.
Article translated by Willis Ke
