Chip shortage, raw material prices skyrocketed, part of the cable business orders showed a precipito

At the beginning of this year, the global chip shortage started in the automotive field, the long order cycle and the sharp rise of various raw materials such as copper and plastics have affected the basic production capacity of many automotive manufacturers, which is still continuing, and has begun to spread in the fields of smart phones, home appliances, 3C code peripheral, etc, There are chip shortage and raw materials soaring, and orders can not be fulfilled; Although automobile and electronic products are the obvious areas affected by the shortage of chips and the explosion of basic materials, the current global shortage of chips and the explosion of basic materials have not only affected automobile and electronic products. According to the latest report released by Goldman Sachs, the industries affected by the shortage of chips and the surge of basic materials have begun to be affected widely, from steel and concrete production to air conditioning, beer production and even soap production. At present, the cable industry is also affected! Due to the shortage of chips, the prices of raw materials have skyrocketed, and the orders of some cable enterprises have dropped precipitously; Entering June, we have nothing to do!

Key point 1: the lack of chips makes some cable enterprises have nothing to do in June!

At present, the cable industry starts to need application chips from the docking station to the USB4 data line. Through a USB type-C data line, they need to realize efficient data transmission, high-definition video transmission, and powerful power supply capability of the device. They need the ability of the chip to help support multiple high-speed interface protocols, including USB4, DisplayPort 1.4A TX, PCI Express, RJ-45, thunderbolt 4, etc, The IP of USB4 router constructs an effective connection between all supporting protocols through the chip. Take USB4 wire as an example: it needs IC, one is to ensure the quality of high-speed signal transmission, the other is to store the relevant information of the cable, including whether it can support 3a to 5A on-board current, etc. Because the speed of signal transmission is faster now. At present, the fastest single channel transmission can reach 20gbps, and the wire can not be too short. In order to ensure the signal quality, chips with functions such as re timer and re driver are generally added. Re timer is used to recover data, and re driver is used to enhance the attenuation signal, This kind of IC can ensure the accurate and stable transmission of high-speed signals within the specified distance. Generally, there is another kind of IC called E-MARK chip【 The upgraded version supports USB PD protocol communication. By communicating with this chip, you can not only know the ID information of the cable, but also know whether the current supported can exceed 3a. In this way, you can distinguish the high current cable and the cable below 3a. It can not only meet the use of high current, but also protect the cable below 3a. In the future, with the upgrading of the product, Chips will be more and more used in products. Due to the global epidemic, consumers stay at home, resulting in a sharp increase in chip demand in the global consumer electronics field. Chip manufacturers are working hard to produce chips needed in the consumer electronics field. Meanwhile, the demand for 5g applications in the consumer electronics field, especially mobile phone chips, has increased significantly, During the epidemic period, home office also led to the growth of the demand for notebook, tablet and other electronic products, which led to the rise of the demand for related chips by many related factors, but the lack of core in consumer electronic chips is obvious.

It is not difficult to see from the evaluation of the major Fab manufacturers on their performance in the first quarter of this year that the market situation of short supply of wafer production capacity has promoted their performance growth to a certain extent. Which markets have strong demand for wafer foundry? From the financial report information released by TSMC, in this quarter, the revenue brought by smart phones for the company decreased by 11% quarter on quarter, accounting for 45% of the revenue in the first quarter, while HPC increased by 13%, accounting for 35%, the Internet of things increased by 10%, accounting for 9%, and the automobile industry increased by 32%, accounting for 4%. TSMC also said in its conference call that the high growth period supported by the multi-year structural trend of 5g related and HPC applications is coming, which will also bring new growth opportunities for TSMC. The capital is profit-making, and only industries with high profit margins can obtain higher energy release. At present, it is unable to alleviate the overall core shortage dilemma of the cable industry.

Key 2: the material inflation represented by copper makes some cable enterprises have nothing to do in June!

Since May, driven by the strength of Luntong 3M, the inner market has reached a new high this year, and all kinds of related cable raw materials have been rising. For large enterprises (annual copper consumption ≥ 50000 tons), when the copper price was relatively low before the festival, they adopted the strategy of gradually preparing goods on bargain hunting, leaving some raw materials in stock. Facing the copper price that continued to rise after the festival, they chose to receive orders for production, There is still room for rolling. However, some large enterprises said that since May, there has been a strange recession in the market, which is in sharp contrast to the same period of previous years when the production should be in full swing. The pace of production has been forced to slow down again, and the shipment volume has dropped significantly, resulting in the finished product inventory still at a high level. Similarly, in the face of the background of soaring raw materials, small and medium-sized enterprises (annual copper consumption < 50000 tons) have small production capacity and weak brand advantage, Due to their weak capital turnover and pricing power, they are faced with the dilemma that they have no orders to do or dare not take orders. Moreover, enterprises with quotation cycle are forced to extend the quotation cycle due to the continuous wait-and-see of end customers. After the last quotation is approved, the copper price is 'far ahead' and unable to operate.

Home appliances, machinery, electronics, communications and other industries with better terminal consumption also slow down the pace of procurement in the face of the sharp rise in copper prices and plastics and other basic materials. Moreover, terminal enterprises have the situation of price reduction, which has led to a sharp decline in the gross profit of corresponding cable enterprises. In the period of relatively stable copper price, the gross profit of some cable products can reach 20%, but at present, the quotation of cable enterprises is difficult to fluctuate with the fluctuation of copper price, the gross profit drops sharply, and only about 5% of the gross profit is still struggling. In the automotive industry, some companies doing automotive lines said that due to the limited settlement method with the terminal, the copper price continued to rise unilaterally, resulting in losses. Some auto lines and auto parts enterprises will settle accounts with their end customers at the average price of the last month when they issue invoices between the 20th and 25th of the month. It is difficult to sell and purchase in time. Under the drastic fluctuation of copper price, there is a continuous loss phenomenon. Only when individual end customers take the spot price as the base price, can the enterprise settle accounts according to the real-time copper price and purchase conductor materials in time. Meanwhile, the overall consumer market began to weaken significantly in June. Combined with relevant factors, the orders of cable enterprises showed a precipitous decline in June. However, there are many new owners in the cable market, and the low price competition is still very fierce. Therefore, some cable enterprises have been forced to stop production and switch to consumption of finished product inventory, In the case of rising prices and no stable orders, the tide of small and medium-sized enterprises closing down may come in the future!