5G Chip Shortage in Chinese Market

5G Chip Shortage is Bad!If you have experienced a chip stock-out in component procurement,this might be happening not just on you but globally. Since the largest supplier of 5G Wireless chip giants Qualcomm and Skyworks has come to hardly meet the chip demand of global electronics enterprises such as Apple, Samsung and some other Chinese android based 5G smartphone manufacturers, reported by Reuters in March of 2021(S.Nellis,J. Horwitz and H. Jin), chipset stock(Skyworks Solution) in global market amazingly hit the record high of $204 in March and is expected to continues into the next year.

Simultaneously,this shortfall in 5G chip supplement has been affecting technology companies in China over entire industrial chain. A survey regarding current situation of 5G communication industry and possible trend was thus conducted by Zhang Yin(2021) among a group of upstream and downstream enterprises including antenna,PCB,optical module and device,power management, system integration,cloud computing, internet of vehicles and VR/AR communication modules.

Brief Result of chip shortage Investigation

In his survey, It is showcased that 70% of engineers think processor chip has been running out of stock worst-affectedly,caused by a short supply of 5G chips from Qualcomm, MediaTek, Ziguang Zhanrui, and HiSilicon.”There’s an ability for the market to respond more quickly to some of the older nodes than the newer nodes, so depending on the product, you may be in a position to get some improvement” said by Qualcomm Inc CEO Steve Mollenkopf. “smartphone manufacturers are encountering an industrywide chip shockout issue. Considering the construction and investment cycle of supply chain, a short supply for chip will be coming in next two years” Responded by Liu Bo, Vice President of OPPO.

In addition, nearly 50% of project engineers believe that the RF chips shortage is becoming even worst,as the integration of carrier aggregation, high-order modulation,Massive MIMO and other technologies has raised the complexity of 5G RF front end design.In the field of low-end RF module,domestic corporations has made mature products in comparison to those in High-end RF modules while international corporations like Qorvo and Skyworth has more advanced technologies in High Rf global market.

Furthermore,A 35% part of participants declared that memory chips has appeared to be stock-out apparently,although suppliers including DRAM and Nand Flash cannot meet the demand for the coming next half year,reported by media overseas. However,32% of those point out that the shortage of power chips is obvious,affected by upstream 8 inch wafer production capacity.PMIC chips will continue to be out of stock until die set prices are trending differently.

According to the report published by Korea Information Society Development Institute(KISDI) in 2021,the average value of semiconductor contained in a 4G smartphone is around 126.1 dollars and this value is soaring up at 233.9 dollars when it come to 5G smartphone with a growth rate of 85%. The prospect of semiconductor has been increasingly taking up than ever. With an estimated demand of 600,000 5G base station deploying in China, the demand of 5G chip applied in a 5G base station,which includes RF front chip, digital-to-analog/analog-to-digital conversion chips, power management chips, storage and other types of chips,has been pushed unprecedentedly.

Driven by the application of 5G industry,chip shortage is expected to be intensified a step further.Since the third quarter of 2020, semiconductor industry has suffering severe crisis on chip stock-out with a direct response in automobile, smartphone and security industry.It is reasonable to predicted that chip surge is spreading into home appliances in the near future.