While global chip giants Texas Instruments (TI) and STMicroelectronics (ST) have expressed pessimism about the prospects of the industrial and automotive chip markets in 2024, the Chinese chip industry has shown a trend of going against the trend. Behind this trend is not only the rapid development of China's new energy vehicle market, but also the gradual implementation of the localization strategy of the supply chain.

According to industry experts, although multinational chip giants such as TI and ST are facing the dilemma of weak market share growth, Chinese chip companies have achieved rapid growth through external expansion and deep exploration of local markets. Especially in the field of new energy vehicles, the "going global" strategy of Chinese automotive companies not only expands market space, but also brings more opportunities for Chinese automotive chip companies.

The trend of localizing the supply chain in China's new energy vehicle industry is particularly evident. Against the backdrop of numerous challenges facing the global semiconductor supply chain, Chinese automotive companies have begun to pay more attention to the construction of local supply chains. This not only benefits the security and stability of the supply chain, but also provides more development opportunities for local automotive chip companies. Taking MCU (Microcontroller) as an example, in recent years, China's automotive standard MCU has started to be shipped in large quantities, meeting the needs of car companies with price advantages and performance, and occupying an important position in the mid to low-end automotive MCU market.

In addition, the overseas construction strategy of Chinese new energy vehicle companies has also brought new market space for Chinese automotive chip companies. With the establishment of automotive companies in Europe, Southeast Asia, South America, Australia and other regions, their supply chain systems have also gone global, seizing the share of international automotive chip manufacturers. This trend has to some extent driven the internationalization process of Chinese automotive chip companies.

From the perspective of supply and demand, the decline in the industrial and automotive chip markets is mainly affected by weakened demand. During the global chip shortage, many suppliers have expanded their production capacity to meet market demand. However, with the gradual increase in production capacity and the failure to keep up with terminal demand, inventory levels continue to rise, leading to an imbalance between supply and demand. Despite this, Chinese chip companies have achieved counter trend growth through flexible supply chain strategies and deep exploration of the local market.

Overall, the Chinese industrial and automotive chip markets are facing new development opportunities. With the accelerated localization of the supply chain and the deepening implementation of overseas strategies by automotive companies, Chinese automotive chip companies will usher in a broader market space. At the same time, this will also promote technological innovation and industrial upgrading in the Chinese chip industry, further enhancing China's influence in the global chip market.

Faust Technology focuses on the field of power devices, providing customers with power devices such as IGBT and IPM modules, as well as MCU and touch chips. It is an electronic component supplier and solution provider with core technology.