According to supply chain, demand for consumer chips is declining rapidly, but demand for automotive chips remains strong, and producers are trying to secure more available fab capacity for the fourth quarter of 2022.

Supply chain insiders pointed out that suppliers engaged in the automotive industry supply chain are actively negotiating with foundries for available fab capacity in the fourth quarter and for additional capacity during the quarter.

In the fourth quarter of 2022, foundries that do not have more automotive chip orders to fill their fab capacity, especially second-tier foundries, will see their fab capacity utilization drop sharply, sources said.

For first-tier foundries, only 5-10% of fab capacity in the fourth quarter will be affected by weak consumer electronics orders. But industrial chip orders will quickly fill the capacity gap left by foundries for PC and other consumer chip customers.

The sources further revealed that the supply of automotive chips including MCUs and IGBTs is severely tight, and the supply of industrial-grade MCUs and other ICs is also still tight, prompting related chip suppliers to compete for more available capacity in the fourth quarter.