Analyst: Oversupply of chips will continue until autumn, but auto chips are still in short supply

A glut of semiconductors that emerged in the second half of 2022 is not expected to ease until at least the fall of 2023, but shortages affecting the auto industry could persist throughout the year, industry analysts said.

The "Nikkei Asian Review" reported that, according to the Nikkei's average estimate of analyst survey results, the oversupply of smartphone chips is not expected to ease until the fourth quarter of this year; It peaked and then eased; the oversupply of data center chips could continue into the first quarter of this year.

In contrast, the automotive industry still faces semiconductor shortages, even with shorter lead times for some products. "If one semiconductor or component is missing, car production cannot continue, so there is no choice but to keep the rest of the components in inventory," said the president of Tokyo, Japan-based semiconductor trading firm CoreStaff.

Not only are automakers ramping up production again, but the increasing number of semiconductors needed for each car is also boosting demand for chips in the auto industry, the report said. But analysts believe the supply of power semiconductors for controlling current flow and analog semiconductors for power management will remain tight through 2023. Some major automakers have also said that parts supply will not return to normal until 2024.

Although the long-term demand for mobile phone chips and automotive chips has investment prospects, with the sharp increase in production capacity, when the growth rate exceeds the recovery of demand, the supply-demand balance of cutting-edge products may be further strained.

The Nikkei is said to list the results of a survey of analysts from 10 sources, including research and trading firms, in which respondents were asked to rate levels of oversupply and undersupply on a five-point scale.