Excessive competition in the MCU market in 2023
Original manufacturers can cut prices without a bottom line, and it has become normal for traders to sell at a loss. ST's MCUs, which once skyrocketed dozens of times during the core shortage period, also began to have prices go upside down last year. Even in the second half of last year, even the high-end H7 series Unable to hold on any longer, he began to hang upside down.
What has ST's MCU experienced last year? Everyone is calling for domestic replacement. How is the Chinese market for ST now? How is it doing?
01
MCU involution
ST high-end series have also begun to hang upside down
2023 can be said to be the year of involution for the MCU.
Domestic chips have become a rage, and original MCUs can be priced as low as 50 cents; traders have to ship products even if they make profits and losses. ST MCUs, which soared dozens of times in the past two years, were also "rolled" into price inversions last year.
From "Best Financial Product of the Year" to price inversion and no one wants it, what happened to ST's MCU?
MCUs were once in the limelight during the core shortage crisis, and ST's MCUs were even more of a pioneer in price increases. At that time, many people complained that "the prices were rising faster than housing prices in Shenzhen." From time to time, the turning point in the MCU market began in June 2022, which coincided with the unblocking of Shanghai. After more than a year of core shortage, the market reached a turning point and began to weaken. Following the general market trend, MCU prices also began to generally dive. ST's typical 32-bit MCU STM32F103C8T6 was still 45 yuan in May 2022, but it was only 13 yuan in July. The replacement GD chip dropped from 12 yuan in May to 9 yuan in July.
By the second half of 2022, although the price of ST general-purpose MCUs continues to decline, the extent is smaller. For example, the prices of the 01 and 03 series are considered stable, and the overall delivery time has not been significantly shortened, while domestic MCUs have already experienced price inversions.
The time has entered 2023. In February, Taiwanese manufacturer Holtek lowered its MCU quotations across the board for traders, which added a chill to the MCU market. Customer price comparisons began to appear for ST general materials. From April to May, price inversions began to occur. At this time, ST's demand mainly comes from industry and automobiles, while personal electronics and consumer goods have begun to weaken.
By the middle of 2023, ST's MCUs will begin to completely clear their inventories. In addition to original manufacturers, agents, and spot dealers, terminal factories will also begin to sell out inventories. When overseas leaders begin to "dump", the MCU market will fall into a price hunt.
02
ST, not only MCU
Total revenue in fiscal year 2023, which has been sluggish, increased by 7.2% year-on-year. Automotive/industrial/personal electronics/communications and computers accounted for 41%, 30%, 19% and 10% of revenue respectively. The increase in revenue was mainly due to automobiles. Strong demand from industries and industries, while low income from personal electronic products has dragged down the growth rate.
Compared with 2022, the revenue share of the MDG division (MCU and digital IC) in 2023 remains unchanged at 32%, while the revenue share of the ADG (automotive and discrete devices) division rises from 37% to 45%. The sector's performance is going from strength to strength.
ST expects that personal electronics will not see quarter-on-quarter revenue growth until the second half of the year; industry is expected to decline sharply in the first half of this year, and will return to single-digit year-on-year growth in the second half; growth in the automotive business will also slow down, and is expected to reach mid-single digits Year-on-year growth in numbers. At present, ST's MCU is still in the inventory adjustment stage. Although the market price has increased slightly, whether it can recover depends on the order booking situation.