Shulou(Shulou.com)11/24 Report--

All the crazy stories of "tall buildings rise and collapse" will start with some weird scenes.

A year ago, Wang Jie, who was looking everywhere for the supply of consumer electronic chips, never thought that he would end up in an online auction, and he was bidding desperately with his "peers" who could not see real people online. it's a batch of chips.

The sponsor of the auction is a well-known chip manufacturer in the industry.

This scene is not what you think of underground black market trading, but rather about "rules": manufacturers have developed a special system for this and set up a mechanism to screen bidders. Even, the manufacturer also requires that the bidder must be a cooperative customer with the platform License.

The auction rules clearly state: "for customers who do not have XX product License, if they win the product, they need to pay US $10,000 for the License fee of the product afterwards." otherwise, they can only participate in the "auction of customers' existing License products".

These designs proved that it was not an one-off contingency plan, and such auctions became the norm at the time.

Throughout the semiconductor industry, there have not been several times to solve the problem of supply and demand by competitive bidding, and those led by manufacturers are even more rare. The most famous similar incident is probably the shortage of electronic components from 2017 to 2018, when many manufacturers had to bid for the supply of materials because they could not meet the needs of all their customers.

This time it is because of a serious "supply-demand disorder" between supply and demand of chips between 2020 and 2021.

On the one hand, the supply has been affected by the epidemic, on the other hand, with the sharp increase in sales of new energy vehicles in 2021, the demand for automotive chips has skyrocketed, the upstream production capacity is also tilted like automotive chips, and consumer electronics chips are suddenly in short supply.

The confusion between supply and demand is directly reflected in the price. "for example, for a certain chip, it starts at more than $8, the first time it gets more than $10, the second time it gets more than $12, the third time it is more than $15, and the highest point is nearly $18 a set." Wang Jie said.

What is even more frightening is that these goods can be sold immediately and make a lot of money after they are sold at auction. People like Wang Jie who really need goods soon find that the auction does not really ease their needs, and those colleagues hidden in the dark are not real peers, and it is often the group of people who get the goods.

"who can resist the temptation in the face of more than double the increase?"

Even Huaqiangbei "village team" came out and raised tens of billions of dollars to inject money into the queue of "core speculation". It is said in almost everyone's mouth: the post-95 purchaser resigned and earned millions, and the post-90s core speculation earned tens of millions of dollars in half a year. The myth of the industry.

At that time, no one would have thought that just a few months later, the consumer chip market had undergone earth-shaking changes, with chips that needed to be snapped up in line to be thrown into their hands in the twinkling of an eye, and no one took over the sale.

"everyone is fighting." I have been in this industry for 20 years, and the price of the chip has only gone up twice, the last time was in 2016, when the price of mobile memory went up. And then this time. " Liu Yong, an agent for mobile phone chips, recalled.

The delivery cycle of the chip industry is extremely long, and it often takes three to six months to place an order downstream to receive the goods. If something unusual happens, there will always be some warning signs. For Liu Yong, the abnormal omen is that the chip price reduction notice has not been issued for a long time.

In the semiconductor industry, product price reductions are the norm, and his customers are used to receiving price reduction notices every two months or so. However, at that time, not only Liu Yong's chip channel, but also the chip prices in the entire industry were fluctuating, and the continuous floating led to the pricing notice being unable to be issued.

Liu Yong recalled the offer to the customer at that time, "We told the customer that the price of the chip was going up, and the lowest was to maintain the original price."

However, even the delicate balance of "keeping the original price at a minimum" was quickly broken.

Entering the third quarter of 2020, the new energy vehicle industry ushered in explosive expansion, Skyworth, Evergrande, SAIC, Dongfeng and other companies have also announced to join the bureau, the already poor consumer-grade chip production capacity has been further squeezed.

"We will soon run out of chips, and we will soon run out of rice into the pot. When we go to the supermarket, the queue of people who buy rice is much longer than before. People in line look at me, I look at you. We both think that there may be something really wrong. Everyone ran to the chip manufacturer and asked him to make it clear how much he could give me in 2021." Liu Yong said.

In this context, chip manufacturers began to urgently count the needs of all parties.

The result is to be expected: already struggling to maintain mobile phone chip production capacity, unable to cover the statistical total demand. The response from the demand side is basically "production capacity is not so much, can not sign so large quantity".

The supply side is weak, but the demand is increasing. In the context of the ever-magnifying imbalance between supply and demand, buyers and sellers generally reduce the demand when they sign a contract: if the demand is 10 million, compromise to 6 million; if the original is 6 million, compromise to 4 million.

The problem also comes with it. First of all, how to solve the eclectic and compressed demand for "4 million or 2 million tablets"? "they just have two choices. The first is to endure it in silence, and the second is to find a way to figure it out."

And then, who are you looking for? Can only find agents-that is, chip manufacturers in addition to terminal brands, chip design companies in the third category of customers.

As a result, far more than the huge demand in the past is gathered at the agents, and the information about insufficient capacity is also gathered at the agents. As soon as the news spread, it soon caused a rush to buy it.

In the early stage of grabbing goods, everyone was more restrained in view of the risk. "the demand for 10,000 units in the past month, and the risk of saving 20,000 is too high, so you can only save 1000 more units, that is, 10% more. Even if something goes wrong, you can still sell."

As a result, the 10% superimposed demand of one, two, and countless customers gathered again to the agent. Considering the increase in demand and the shortage of chips, agents not only expand the sales of chips, but also are encouraged by "positive feedback" and acquiesce to the existence of the so-called huge demand for chips. In order to meet the expected future customer demand, agents in a number of 10% expansion increments, once again expand the number of predetermined chips to chip manufacturers, and finally complete the information closed loop.

In this way, a vicious circle of adding code layer by layer is completed.

"just like a blind man touching an elephant, people are actually misleading each other."

The epidemic once again served as a cause. "they can't get through, and I can't go to customers." the form and frequency of contact with each other have changed, and a lot of information has been missed. The requirement is then magnified step by step until it becomes a pseudo demand.

On the other hand, agents often need a cycle of two to three months from the signing of the contract to the delivery of the chip, which is used to process the chip into a module set to facilitate the follow-up development of customer products. Take Zhan Rui's consumer chip as an example, in addition to the SoC master chip, it also encapsulates a total of 12 slave chips, such as Transceiver, pmic, connectivity and so on.

However, the price of chips is skyrocketing every day. A kit processing cycle is not over, and the whole industry has entered a frenzied rush stage.

"everyone thinks that it is time for the seller's market, when supply exceeds demand. It doesn't matter whether the market side wants so many mobile phones and consumer electronics, just one word, 'snatch'! because if you don't pick up the goods today, it may be another price tomorrow; you may still be able to get 5,000 tablets today, but you may not even get 1,000 tomorrow." Huang Jun, a chip trader, recalls.

The market is in a frenzy, and it repeatedly sends the same message to everyone involved-prices go up, you rob others or you rob others, so no matter how firm your personal judgment is, you can't escape the result of being quickly flooded.

Huang Jun introduced the situation at that time, "I integrated my front end and back end, considering my upstream and my downstream, and came to the conclusion that this situation will continue now." I also asked other bosses and colleagues, and everyone was robbing it. If you don't rob, there will be no stock. At this time, there is no way to think about the future and real needs, because the biggest problem you face now is that as long as you can't get the raw materials, you can't explain it to the customer. "

At the same time, TSMC has raised chip prices twice in a row.

In March 2021, TSMC announced that it would raise the price of 12-inch wafers quarterly by up to 25%, and announced that it would increase its contract manufacturing price for its driver chips from April. Relevant reports at that time also showed that TSMC decided to cancel the discount to customers starting from the order at the end of 2021. This also means that the contract price of TSMC will rise by several percentage points.

Five months later, TSMC said again that it would raise contract manufacturing prices again due to factors such as rising raw material prices and chip capacity shortages, including about 10 per cent for advanced processes and 10-20 per cent for mature processes.

Under the fire cooking oil, the price of chips has reached a new peak. A typical example is that MTK and Ziguang sharpen some chips that hit bottom, even if the price increases by more than 50%, even if they have no other use but to be installed on a functional machine.

They fried the chip into futures. "the whole industry is crazy and doesn't think about who to sell it to." the most I heard at that time was,'I want as much as you have, and I eat as much as you have'. You don't want this batch? the next minute, someone else took it. "

One of Huang Jun's chips was inquired by five customers in one day, and when the latter two came to inquire, it was only five minutes before the transaction was completed, and he was confirming the final process with the customer and didn't even have time to update the chip list.

When the price rises, people begin to speculate on the module set made from the chip as a stock. Of course, in fact, speculation in the mobile phone industry is nothing new.

"as long as there is a change in the relationship between supply and demand, whether it is oversupply or oversupply, it is a business opportunity. the so-called speculation needs to take advantage of this kind of business opportunity, or create this kind of business opportunity, is no different from other industries."

The first premise of speculation is to create panic, telling the industry that it is out of stock, out of stock, or out of capacity. The second step is to gradually hoard goods and act according to your capacity. "after all, there are risks. What if you can't sell them?" . Everyone's financial resources are different. some people may hoard 1 million yuan, others may only hoard tens of thousands of yuan, and then improvise.

At this time, however, chip trading does not seem to need to improvise. Up to the chip manufacturers, down to the customer base, are saying, "chips are really scarce, production capacity is really not enough."

The "core speculators" make a judgment on this and just close their eyes and buy it. Those who have liquidity on hand will collect it as soon as they can, or even join hands with others to collect the chips. "there is a batch of chips with more than 100,000 chips, and if the family can't eat them, and they don't want to let go, they will ask the people around them if they want a piece of it."

"since January last year, the relationship between supply and demand of chips has become more and more tense, and it is possible to enter a state of out of stock." Huang Jun said.

The picture shows the site of a chip manufacturer's stock warehouse.

After the news that the stock may be out of stock spread, the practitioners became more and more crazy: "the mentality of both the buyer and the seller is an earthquake, and they do not want to miss such an opportunity that is rare in decades." I have a friend who got 50,000 from another person yesterday and gave another person 40,000 that day for stability. I really regret hearing the news today! "

The chip has been fried into futures, and those who can join the board want to join the board.

Specific to the hype, it looks multifarious, but in fact it is not out of line.

For example, Huang Jun said: "I will join hands with you to raise the price, or if it is inconvenient for me to come forward, I will let you come forward to find 10 families, and I will find another 4." sweeping, foodie, and even the whole in and out, is no different from other ordinary commodity hype. The method is simple and the income is high. "

However, no matter how high the interests are, the big brands still dare not enter the market in the end: "because this will affect the long-term cooperation with the chip companies, as well as other interests, such as the chip launch and the rebate of the chip manufacturers."

In November last year, the price of chips finally reached the highest. The prices of high-quality chips generally doubled, and those of low quality also increased their prices by 50%. Speculators take the chip in hand, looking forward to making a lot of money in the coming year, turning bicycles into motorcycles, and looking forward to the arrival of a beautiful 2022.

With such a wish, they had a wonderful Spring Festival. However, such a future, after all, only exists in expectation.

"finished" during the handover in 2022, the chip industry copied its prelude to the price take-off a few months ago.

The precursors are all similar. The price of the chip stayed in mid-air, did not continue to rise, but did not fall. Take a chip with an official price of $10 as an example, its price remains high between $17 and $18.

Shortly after the Spring Festival, when the chip industry was still calm, the world ushered in a big surprise: the geopolitical conflict between the two countries broke out. At this time, chip speculators who enjoyed the aftertaste of the holiday also began to talk about the international situation, but they never thought that it was this conversation used to pass the time that accelerated their fate to the corner.

The first wave of impact first occurred in shipping.

"for them, the most important thing at this time is to get rid of the chip, ship it out and send it to the customer. but they soon discovered that there was something wrong with the shipping and the ship couldn't get out. Then there was a problem with air transportation, and the countries closed their airspace to each other." Liu Yong said.

Then there is attention. Geopolitical conflicts have dragged on again and again, and began to exert influence on many areas. Natural gas, food and other topics have become the focus of people in the online world and the real world. Subsequently, dollar interest rate hikes and inflation began to exert an impact on people's real life. People suddenly find that there is no need to change their phones-mobile phone sales are starting to plummet.

"at first, my client told me that he wanted 10,000 a month, and then it went up to 11000. Now I change my tune and say that it may only cost 8,000. Why? He doesn't have so many US dollars to pay for goods, maybe it's because his country has foreign exchange controls, or it may simply be that he doesn't have that much money. We didn't feel it at the beginning, and we felt that it was an individual accident. But soon, with the first one, there will be a second and a third. "

However, even so, speculators still hold a glimmer of hope: small waves, the past is fine. Then, the mobile phone industry shipments plummeted into "the last straw to crush the camel."

Global smartphone shipments were 311.2 million in the first quarter of 2022, down 11% from a year earlier, according to analyst firm Canalys. Domestic brands such as Xiaomi, OPPO and vivo fell 20 per cent, 27 per cent and 30 per cent respectively.

Figure source: according to data released by the China Academy of Information and Communications, Canalys said that the total number of mobile phone shipments in the domestic market in March was 21.5 million, a sharp decrease of 40.5% compared with the same period last year. There was an uproar in the industry.

Liu Yong and Huang Jun finally realized that they were having a too good daydream, and now they wake up-- "run as fast as you can, and throw away the year-round inventory first."

Since April, chip prices have begun to decline steadily. After June, the second-quarter data came out, and the mobile phone market continued to malaise: global mobile market revenue fell for the second consecutive quarter, falling 15% in the second quarter of 2022 from a month earlier to $95.8 billion.

Chip prices then began to fall off the cliff: "since July, the price has really been step by step, miserable." the price fell step by step from the peak to break through the original price. "

In the face of plummeting prices, many people still hold the psychology that prices have bottomed out and rebounded, but are unwilling to clear their positions and stop losses.

"for this type of chip, there is no one to take over at the normal price, and the fracture price can only sell a small part of it." However, in fact, Zhang Tao did not really reduce the chip to a "bone discount". "although the market is already very bad, the price still cannot be reduced too much, which will only accelerate the market collapse and last as long as it can." and, "what if this chip is invigorated again?"

It is true that there are people in the industry who stop in time after earning tens of millions, but more people like Zhang Tao are reduced to the catcher of drumming and passing the "core". In other words, those who have made money have long hidden merit and fame, and those who are trapped in it can only stay warm together.

Under the slump, the hottest joke in the industry community has changed from "rookie starters earn millions a month" to "several people in Huaqiang Square have jumped from buildings." Those who are cornered are people who have borrowed money and hoarded a large number of chips but cannot sell them. They often not only hoard their own goods, but also "make a lot of money" with relatives and friends.

Huaqiang north of the "core people" have been trapped at the same time, a fact is often easy to be ignored, precisely this fact can be regarded as a signal of the coming of the storm.

As early as the end of last year, brands closely connected to the front line were aware of the problem: "OPPO and vivo, including Xiaomi, have been cutting orders since the fourth quarter of last year. This brand cut 10 million and that brand cut 20 million."

Why did they cut the order? The logic is very simple, even if all the links in the industry say that there is a lack of core, once the market terminal reflects that there is no demand and the goods cannot be sold, the so-called demand is pseudo demand.

"Brand manufacturers are deep into the frontline. when they analyze the data, it is easy to find that goods cannot be sold in a certain country, or the flow rate of goods is decreasing. There are many reasons for not selling goods, such as high prices, unpopular product functions, and so on. But after excluding the problem of the product itself, the brand manufacturers still found a problem, that is, the market situation is not as good as expected." Zhang Tao said.

Under the premise of being out of stock, those who sold 10,000 units in the past month, without price increases and major functional adjustments, if consumers do have purchase demand, shipments will generally be maintained at 10,000 units or more. But a month has passed, the volume of shipments has not changed, two months have passed, still unchanged, and sales have even declined slightly, that is, there is something wrong with the whole market.

From this, the brand manufacturers judged that the cold winter had arrived, followed by action: "negotiate with chip manufacturers, as well as suppliers of electronic parts such as screens, cameras, batteries, and so on, to negotiate delayed delivery of goods if they can cut orders directly. But in fact, delaying delivery is a disguised form of order cutting. So, when several major brands cut orders, the whole industry was in uproar.

The action of the brand is the strongest signal in the industry, and when several orders are cut together, a set of more than 100 million films will come down. That's when everyone knows it's over. "

"now that everyone is awake, looking back, the geo-conflict has only accelerated the process. Even if there is no geo-conflict, in the end, everything will be exposed."

After all, "hype without demand is a castle in the air after all."

Since June, chip agent Zhang Tao has set the chip industry-related WeChat group from do not disturb to the top, clicking on it countless times a day. As the months passed, he didn't get the good news he was looking forward to. After a sudden drop in the price of a chip stored in the hands of tens of thousands of chips, it is still slowly falling, losing tens of thousands or hundreds of thousands of dollars every day.

At the end of the conversation, Zhang Tao said that it was difficult to describe his mood at that time. The feeling of "watching him rise the Zhu building, entertain the guests, and see his building collapse" only belonged to the bystander. Those who were in the game were caught in a whirlpool of panic and anxiety. I don't know how to get out, and I don't even have a way to complain. " The cold wind roared past and blew away the clothes to keep out the cold. The style seems to be the initiator, "but the problem is," when the wind blows, it also has its own force. "

This article comes from the official account of Wechat: ID:pinwancool, author: Baining

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