After ARM launched its MCU IP, it has become quite challenging to establish a strong chip manufacturer. Firstly, one must act quickly to seize market opportunities; secondly, having a loyal customer base for one’s own IP is crucial, as seen with Renesas, Microchip, and TI, who continue to use their own MCU core IP. Thirdly, ARM’s MCU ecosystem is well-developed, easy to learn, and user-friendly, making it popular among engineers and procurement teams in solution companies.Currently, with the severe shortage of MCUs, everyone should cherish this hard-won opportunity and serve customers diligently. The price increases from several foreign MCU manufacturers are not as drastic as 10 or 20 times the original price. Instead, it is the channels and downstream entities that are taking advantage of the situation to inflate prices, leading many manufacturing companies to find themselves unable to buy, transitioning from a shortage to unaffordability.Today, while chatting with an old engineer about the reliable MCUs from back in the day, I suddenly recalled a certain MCU company that was notorious for channel speculation, massive price hikes, and severe shortages, ultimately being abandoned by customers. This channel partner was also fined, and the product manager and sales team were dismissed.This company was Atmel, once a well-known name in the MCU market. After being acquired by Microchip, Atmel’s MCU market presence has never returned to its former glory.In some forums, discussions about Atmel’s past shortages are still vivid, with repeated mentions.“ST’s surge compared to Atmel’s neglect,”“Atmel was the originator of the shortage and price hikes, causing trouble for many,”“**’s tomorrow is Atmel’s today,”“I remember a year when Atmel was out of stock for a long time; it seemed the entire market was out of stock. Eventually, everyone switched to ST and never looked back.”……Old forum friends are still venting on certain platforms.Engineers who experienced Atmel’s price hikes and shortages back then are likely around my age, not very young anymore. Of course, the reason was that their MCU ecosystem was genuinely well-developed, and they did a lot of work in the market to support small and medium solution companies in launching new solutions, which should have flourished everywhere. However, when customer orders surged later, production capacity could not keep up, leading to unresolved shortages. Coupled with excessive price hikes, many solution companies ended up losing money.This year resembles Atmel’s shortages from back then, but it is even more severe, with the entire MCU industry facing extreme shortages. Many domestic MCU manufacturers are employing similar tactics when supporting customers, raising prices to levels that customers cannot accept.During a recent industry survey conducted by the editors of Electronic Enthusiasts, several points of feedback were noted:
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Previously, it was about not being able to buy; now, it is about not being able to afford.
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June, July, and August are the global off-peak seasons for electronic product demand, with significantly fewer orders. Many manufacturers have transitioned from unaffordability to no longer needing the products. In the coming months, some high-priced stockpilers have already started to loosen up and quietly move their goods.
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Original manufacturers are indeed struggling to adjust to shortages. Many still anticipate a year-long shortage cycle. However, the number of manufacturers making this prediction is decreasing. The reason is that after securing large customers and stabilizing demand, they are no longer accepting new orders.
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This year has been particularly harsh for solution companies. There have been no opportunities to develop new products or customers, and upstream cannot support this type of demand. Previously, they were warmly welcomed; this year, they are willing but unable to deliver to new customers.
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Passive components are generally not in short supply, especially MLCCs, which saw significant price increases and capacity expansions last year; this year, prices have not increased and have even decreased. Particularly, mid to low-spec MLCCs are not in short supply at all.
Domestic chip manufacturers need to be clear about their own strengths; while they can replace ST, they cannot truly substitute TI and Microchip. With so many companies trying to replace ST, the market left for you is limited.Alright, feel free to discuss the shortage issue. The author’s WeChat is 147778177.
Disclaimer: This article is originally from Electronic Enthusiasts, please cite the source above. For group discussions, please add WeChat elecfans999, for submission of reports or interview requests, please email [email protected].
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