The MCU market has been preparing for price increases recently. It was previously reported that due to the strike at STMicroelectronics, there is a gap in market supply and demand. In addition, the current industrial chain, regardless of the wafer foundry, packaging and testing end, production capacity is very tight, and the delivery time has also been significantly lengthened, further pushing up the increase. Industry players admitted that it is now normal for order delivery to be four months.

At the same time, as wafer foundry prices have increased by at least 10%, packaging and testing have also increased by 5-10%, driving up average costs. In addition, orders are expected to be in the first half of next year, and demand far exceeds supply. Taiwan's five largest MCU companies unanimously raised the prices of some products in the fourth quarter.

It is understood that the five major Taiwan MCU manufacturers, including Holtek, Lingtong, Songhan, Hongkang, and Nuvoton, have recently raised their quotations simultaneously, with some products increasing by more than 10%.

Song Han said that the company's product line includes multimedia audio and video control ICs, as well as 8-bit MCUs such as general-purpose, medical and computer peripherals. The demand is strong, especially for one-time programming (OTP) related products. In the fourth quarter, the cost has been gradually reflected to customers, and most customers can accept it. Some products have increased by 10%.

Lingtong pointed out that thanks to the replenishment of inventory by driving recorder customers and the strong demand for external cameras, it has begun to increase the price of 32-bit MCUs in November, and the increase will continue all the way to next year. It does not rule out subsequent increases in the price of 8-bit MCUs, which will be dynamically adjusted according to market conditions.

Holtek said that in order to reflect costs, the company will adjust the selling prices of some products with lower gross margins starting next year. However, due to the current strong market demand and tight supply chain, prices have begun to increase as long as new orders are received.

Prior to this, Shenzhen Hangshun has issued a price increase notice, stating that due to tight production capacity of wafer and packaging plants, rising raw material prices, and a significant increase in customer orders, it has decided to restore the MCU series to the agent system price. All agents who have not given FCST in the first half of 2021 cannot guarantee supply. Only those who give FCST and pay a deposit in advance can guarantee supply; storage EEPROM (24Cxx series), NOR FLASH (25QXX series), LCD driver series increased by 10%-20% across the board.

In addition, like the five major manufacturers in Taiwan, the Japanese company Renesas Electronics has also recently issued a price increase notice, and the delivery period has been extended to more than four months.

According to industry insiders, new orders from Renesas Electronics after October will be placed in early 2021, such as the 9FG104EGILFT ordered in October. In addition, the demand for network communication equipment such as switches and mobile base stations is increasing, such as: 89H12NT12G2ZCHLG, 89HT0832PZCBLG8.

In previous years, MCU prices often only fell but did not rise. However, with the current obvious imbalance between supply and demand, the industrial order has been disrupted. Some bosses bluntly said that this is a rare phenomenon in the past 20 to 30 years in the industry. MCU factories have also experienced a price increase for the first time in history.

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