In the past two years, the global supply of power semiconductor devices has been in a state of tension, and even the leading player of global power devices, Infineon, is facing a shortage. According to an analysis by a supply chain person, the shortage of Infineon has both the objective reasons for the global environment and its own reasons. The following is the content of his analysis.
Infineon is one of the world's largest semiconductor solutions companies. Due to the continued strong growth of the power device business in the automotive and industrial industries, Infineon’s revenue has grown at a compound annual growth rate of 9% since its independence from the Siemens Group in 1999, and its market share is increasing year by year. Infineon has four main business divisions: Automotive Electronics (ATV), Industrial Power Control (IPC), Power Management (PMM) and Digital Security Solutions (DSS).
Infineon's industrial IGBT modules are part of its IPC business unit. IPC business accounts for 17% of Infineon's total fiscal year 2018. The other three business units account for a larger proportion. Similarly, silicon wafers used in IGBTs are used more in the ATV and PMM business units. The shortage of IGBTs is essentially a shortage of silicon wafers, and IPC has a relatively low proportion of all businesses, so its priority is lower than that of ATV and PMM business units.
In addition to the internal distribution priorities of the wafer, the production schedule of the order and the global economic cycle also have a direct impact on supply.
At the beginning of the new fiscal year, Infineon generally develops a one-year production plan and raw material procurement plan and adjusts it on a quarterly basis. The standard lead time for Infineon's components is 16 weeks (excluding stock materials). The reason for this long delivery is because the production plans and raw material procurement plans mentioned above are made on an annual basis. In the event of a shortage, the IGBT's delivery time will be extended to 35 weeks or even longer, mainly because Infineon's limited wafer quantity is based on factors such as the time of order placement, the order quantity, the type of customer's industry, and the urgency.
Due to the volatility and instability of the global economic situation, the shortage of Infineon IGBTs has become natural. When an economic cycle reaches its peak, the next trough will follow. For IGBT modules with long production cycles, the economic crisis will lead to oversupply, and the inventory of authorized distributors will become unsalable. In addition, producers may reduce production to cope with oversupply. In severe cases, layoffs may occur. When the economy recovers, producers re-increase production capacity and recruit new employees, while new employees need three to six months of training before they can formally take up the jobs.
In addition, with the rapid development of automotive electronics and new energy vehicles in recent years, Infineon's ATV business unit continues to grow, strengthening its top position in the four business divisions. On June 3, 2019, Infineon announced the acquisition of Cypress, strengthening its advantages in the field of automotive electronics. After the acquisition, Infineon became the leader in automotive electronics. The supply chain people stressed: "The strength of the ATV business unit may continue to limit the supply of IPC."