Hoarded general-purpose MCUs hard to sell with increased productivity and weaker demand in China

Editing by Li Panpan

The market boom of MCU has gradually subsided, and some agents find it hard to sell stockpiled MCU products, industry insiders told JW Insights. MCU for automotive-grade remains in acute shortage.

It’s been two years since news of the MCU shortage broke out. Their skyrocketed price has gradually stabilized, and those of famous domestic and multinational brands, including ST, have been undersold since the second half of 2021.

Insiders noted that the main reason for hoarders continue to undersell is the increased production capacity of international players, and traders are not optimistic about the follow-up market situation. Therefore, prices of general-purpose MCU products kept falling.

On the other hand, the overall market demand in the second half of 2021 is not as strong as in the first half, especially in the consumer electronics sector. A major MCU manufacturer said, judging from the orders received by the company, the current market shortage is gradually easing, and demand in Q3 and Q4 was not as strong as that in Q1 and Q2.

The current order delivery time of international MCU brands is still half a year or even more. Domestic players should be more sensitive to the change when international players have already felt the eased shortage, advised a distributor agent.

The source also gave the example of a Chinese MCU supplier: As early as the end of last October, it bought many wafers from TSMC at high prices. Because it entered the MCU market, not for long, and its customer recognition is low, a large number of goods are stored in the warehouse and cannot be sold at all.

MCU products with fallen prices are mainly general-purpose, primarily 8-bit MCUs and low-end 32-bit MCUs. However, the cost of automotive-grade MCUs is still high with limited market stocks and serious short supply.