TWS headset core configuration NOR Flash is seriously out of stock due to Japan earthquake

Foreword:

The recent earthquake in Japan and heavy snowfall in Texas in the United States have worsened the shortage of chip production capacity, which had already been severely supplied, and suffered the most. The out-of-stock situation may become more serious.

Among the many affected chips, NOR Flash does not seem to be prominent, but due to the explosive growth of new applications in the past two years, the demand for NOR Flash has greatly increased, and the degree of influence has risen accordingly.

Author | Fang Wen

NOR Flash has become the core configuration of TWS Bluetooth headset

In the past two years, the most popular consumer electronics product is the TWS Bluetooth headset. In the next few years, this market demand will further expand. By 2022, the global TWS headset market is expected to exceed 200 billion yuan.

TWS earphones must be equipped with NOR Flash, because it has more functions. In order to store more firmware and code programs, a serial NOR Flash needs to be expanded.

Based on the market size of Air Pods, the market size of NOR Flash for TWS headsets will exceed $200 million in 2021.

At present, the application of AMOLED in smart phones is becoming more and more common, which drives the growth of mid-range NOR Flash demand, and its compound growth rate has reached 24%.

Because NOR Flash has cost advantages, better reliability and stable supply, high-capacity NOR Flash is widely used in automotive electronics.

Due to its small capacity and high cost, NOR Flash was marginalized by major manufacturers. However, with the rapid development of emerging markets such as 5G, AMOLED, and autonomous vehicles, NOR has renewed the attention of manufacturers.

NOR Flash out of stock will continue

Currently, 90% of the global NOR Flash market is occupied by five major manufacturers, Macronix, Winbond, Micron, Cypress and Zhaoyi Innovations.

Since the fourth quarter of 2020, the global NOR Flash supply has been in a tight state, and the shortage of demand continues to intensify.

Major NOR Flash manufacturers, such as Winbond’s NOR Flash production capacity in the first half of this year, have been full, and prices have continued to rise. The increase in the first quarter reached 7%-10%. Probability continues to be full.

Under the influence of the snow disaster in Texas, Cypress's NOR Flash production capacity was also suspended.

The NOR Flash capacity of Infineon's Austin 8-inch wafer fab, which accounts for about 5% of the global market, will have an impact on market prices if it is forced to stop production.

Since the fourth quarter of 2020, the global NOR Flash supply has been in a tight state, and the shortage of demand continues to intensify.

There is no expectation for the order recovery, growth, or even boom in the second half of the year. The epidemic has disrupted production and stocking plans.

Semiconductor manufacturing is difficult to resume production after natural disasters

Semiconductor manufacturing has very strict requirements for the production environment, and irresistible accidents, power outages, machine shifts, and chemical leakage in equipment pipelines will make it difficult to resume production for a while.

The production lines of semiconductor manufacturing plants usually rotate 24 hours a day. This involves cost issues, because some large equipment requires more than ten hours to turn on.

Moreover, many equipments are more sophisticated. Every time you start it, you need to check the damage, and adjust the temperature and humidity of the workshop to standard values. Therefore, in the event of a power outage or accident, it may take several days to resume production.

Exacerbate the tight situation of industrial chain capacity

At 23:07 on February 13, local time, a magnitude 7.3 earthquake occurred in the eastern seas of Fukushima, Japan. Fukushima and Miyagi prefectures in Japan were the most affected.

Many Japanese semiconductor companies are located in these two counties. The earthquake may affect the production of chip companies. Chip maker Renesas Electronics has suspended operations of its Ibaraki plant to inspect its clean room.

The share of Japanese companies in the global semiconductor materials market is about 52%; in the global semiconductor equipment manufacturing field, the United States and Japan control more than 80% of the global semiconductor manufacturing equipment market.

In the context of global semiconductor capacity shortages, the disturbance to the industrial chain caused by the Japanese earthquake may further aggravate the tightness of capacity, especially for automotive chips.

It is predicted that due to the shortage of automotive chips, the first quarter of 2021, automotive production will be about 672,000 less than initially expected. By the end of this year, total automobile production will be cut by 964 thousand vehicles.

  • Many upstream suppliers of major chemical materials factories in Japan have reported that production was temporarily suspended due to power outages, and the earthquake affected transportation and logistics, which did affect the smoothness of the supply of materials for the front-end semiconductor process, especially Shin-Etsu Chemical's temporary suspension of work in some factories, causing supply to appear Short-term gap.

  • Semiconductor materials such as quartz furnace tubes have also seen unprecedented price increases due to the surge in demand and tight supply.

  • The rising material cost and tight supply of wafer foundries may aggravate the situation of tight production capacity, and in terms of foundry prices, there is also a chance to respond appropriately.

  • Mitsui Chemicals also suspended operations at a factory in Chiba Prefecture due to the power outage caused by the earthquake. According to the company’s spokesperson, it will take 10-14 days to fully resume production. In addition to the production of chemicals required for semiconductors, the plant mainly produces reagents for the manufacture of auto parts.

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    The electronics industry chain affects the whole body, and natural disasters are prone to large out of stock and price increases. The products of the affected companies cover multiple fields such as storage, passive components, semiconductor materials, silicon wafers, automotive chips, PCBs, and complete vehicles.