Electronic Components Industry Update: Shortening Lead Times for Automotive Chips and Strong Sales Performance for Infineon and SMIC in 2023

1. Automotive chip lead times to shorten in 2023: A DIGITIMES Research survey quoted by Science and Technology Board Daily predicts that automotive chip shortages have eased since Q4 2022. While MCUs remain in short supply, delivery times for PMICs, CIS, embedded multimedia cards, and display driver ICs have improved. With OEMs’ order backlogs clearing, purchasing power for automotive chips is fading, and it’s estimated that lead times for most automotive chips will continue to shorten in 2023. 

2. Infineon’s performance boosted by strong automotive and industrial sales: Infineon raised its performance guidance for Q2 and FY2023, stating that it expects revenue for Q2 to exceed €4 billion and full-year revenue to exceed approximately €15.5 billion, driven by strong sales in automotive and industrial sectors. 

3. SMIC achieves record revenue and production: SMIC’s 2022 annual report shows operating income of approximately ¥49.516 billion, a YoY increase of 39%, and net profit of approximately ¥12.133 billion, up 13% YoY. The company’s total assets increased 21% YoY to US$43.8 billion, with a production of nearly 100 billion chips in the past 22 years. SMIC expects annual revenue to decline YoY in 2023 by a lower double-digit percentage, with a gross profit margin of around 20%. 

4. 300mm fab capacity expansion slows down in 2023: The International Semiconductor Industry Association (SEMI) forecasts that 300mm fab capacity expansion will slow in 2023 due to weak demand for memory and logic components. Chip manufacturers including GlobalFoundries, Hua Hong Semiconductor, Infineon, Intel, Kioxia, Micron, Samsung, SK Hynix, SMIC, STMicroelectronics, Texas Instruments, TSMC, and UMC plan to increase production capacity to meet demand growth between 2023 and 2026, with 82 new factories and production lines expected to operate during this period. 

5. TSMC unlikely to increase prices in the short term: The Taiwan Business Times reports that TSMC may raise prices in H2 2023, but industry insiders suggest that price negotiations for Q3 are already complete, and negotiations for Q4 won’t start until April. The production capacity of TSMC and other foundries has dropped due to weak demand, and most companies won’t raise prices until demand has fully recovered.