Author: Zihao
The global shortage of automotive-grade chips in 2022, where chips were in extremely short supply, is still fresh in memory, yet within just two years, the industry has stepped into a deep downturn. Entering the second half of 2026, signals of an industrial turning point continue to emerge. Financial reports from leading overseas semiconductor manufacturers have generally recovered, supply chain inventory has fallen back to healthy levels, and orders from Tier 1 component manufacturers are steadily repairing. Coupled with AI (Artificial Intelligence) computing power continuously seizing 8-inch mature process capacity, the accelerated penetration of 800V high-voltage platforms and advanced autonomous driving vehicles, the two-year inventory digestion cycle has reached its end.
Overseas investment banks such as Deutsche Bank and Bernstein have given their latest assessments, indicating that in the second half of 2026, the automotive semiconductor sector will enter a structural upward channel. This round of recovery will not replicate the across-the-board price surge seen in 2022; prosperity differentiation in the supply chain will become the main characteristic. Superimposed with the industrial upgrading of electrification and intelligence, a brand-new industrial upward cycle has already unfolded.
01. Inventory Digestion Nearing Completion, Restocking Cycle Officially Launched
From 2020 to 2022, the tight global wafer capacity coupled with the rapid explosion of NEVs (New Energy Vehicles) plunged the automotive industry into a severe chip shortage. Many OEMs reduced production or even halted operations due to chip supply interruptions. Facing supply chain risks, OEMs and Tier 1 component enterprises such as Bosch and Continental initiated overstocking. The original 3-month chip stocking cycle was extended to over 6 months. Distributors also heavily hoarded general-purpose MCUs (Microcontroller Units), low-voltage MOSFETs, and automotive power management chips. Industry inventory turnover days surged significantly, with peak inventory days for leading manufacturers like NXP, STMicroelectronics, and Infineon exceeding 200 days. A massive amount of forward orders透支 (overdraft) future market demand, laying the groundwork for the industry's downturn over the subsequent two years.
In 2023, an industry turning point appeared. Global NEV subsidies gradually phased out, and terminal vehicle purchase demand returned to rationality. The growth rate of EV sales in Europe and the US slowed down, and the domestic auto market initiated a price war. OEMs actively compressed production schedules, and the accumulated chip inventory entered a continuous digestion phase. Meanwhile, the consumer electronics market remained sluggish, with shrinking demand for consumer MCUs and analog chips. The 8-inch mature process capacity originally supplied to consumer electronics spilled over, making the supply of general-purpose automotive-grade chips abundant and causing product prices to drop significantly. The maximum drop for 8-bit basic body MCUs and low-voltage MOSFETs exceeded 30%. The price of STMicroelectronics' STM32 general-purpose series shrank by 70% compared to its peak. Distributors' willingness to procure declined, and the entire industry entered a passive inventory digestion phase.
Facing the operational pressure brought by inventory backlog, overseas IDM giants lowered wafer utilization rates, compressed 8-inch foundry orders, and suspended production line expansions. Renesas and onsemi shut down some old SiC production lines. The capacity utilization rate of domestic power semiconductor manufacturers declined synchronously, and corporate performance was generally under pressure.
Judging a cycle turn cannot rely solely on the price fluctuations of a single product. Five dimensions—OEM inventory, Tier 1 orders, chip delivery lead times, manufacturer revenue, and original manufacturer price hike signals—have formed a positive closed loop, verifying the certainty of the upward cycle in the second half of 2026.
Supply chain inventory levels have returned to a healthy range, and previously积压 (backlogged) goods have been basically cleared. In the first quarter of 2026, the inventory turnover days of the top five automotive-grade semiconductor leaders, including Infineon and NXP, fell from the peak of over 200 days to 120-140 days. The inventory-to-sales ratio of Tier 1 suppliers dropped to 12.2%, returning to the safety threshold. Domestic distribution channels have only 1-2 months of inventory left for automotive power devices and NOR Flash, meaning buffer inventory is basically exhausted. Chip inventory for mainstream European and American automakers is maintained at around 40 days, close to normal levels, ending the weak situation of stockpiling and clearing goods. Influenced by the market expectation of chip shortages again due to AI computing power seizing mature processes, automakers have begun to replenish strategic inventory.
Orders and corporate revenue have turned upward synchronously, achieving positive growth for two consecutive quarters. Statistics from Bernstein show that in the first quarter of 2026, the global automotive semiconductor industry's revenue increased by 11% year-on-year, and in the second quarter, it increased by another 5% quarter-on-quarter, with the recovery trend steadily rising. At the corporate level, NXP's automotive business revenue in the second quarter was $1.938 billion, a year-on-year increase of 12%, with automotive business revenue stably accounting for 56%. STMicroelectronics' automotive sector revenue growth rate was 26%, and Renesas' automotive business growth rate was 24.8%. Texas Instruments saw a recovery in orders for automotive analog chips, and all overseas leading enterprises' automotive businesses have emerged from negative growth. In the domestic market, StarPower and Silan Microelectronics saw quarter-on-quarter improvements in automotive IGBT orders, and automotive NOR Flash shipments have risen for three consecutive months, with smooth demand transmission across the upstream and downstream.
The lengthening of chip delivery lead times is the most intuitive signal of tightening supply and demand. During the downturn cycle, the delivery lead time for automotive-grade IGBTs and MOSFETs was only 8-12 weeks, with sufficient spot supply. As of August 2026, the delivery lead time for mainstream automotive-grade power devices has been extended to over 30 weeks, and SiC main drive modules exceed 40 weeks, with some orders requiring a half-year wait for delivery. Original manufacturers generally implement quota supply and cash locking. Signing long-term advance orders has become the industry norm. The delivery lead time for high-end 32-bit domain control MCUs has reached 28 weeks, and automotive NOR Flash supply is tight. Only the supply of low-end 8-bit MCUs remains loose, showing a clear prosperity gap between categories.
Industry price hikes have landed, with the second round of price adjustments within the year covering most automotive chip categories. In July, Infineon took the lead in initiating the second price adjustment, raising prices for automotive-grade IGBTs, high-voltage MOSFETs, and automotive PMICs (Power Management ICs) by 10%-20%. STMicroelectronics, onsemi, and Texas Instruments followed suit in raising prices for automotive analog and signal chain chips. Domestic companies like StarPower, Yangjie Technology, and Sanan raised prices for automotive-grade power devices by 10%-25%. This round of price hikes is not simply passing on production costs, but an inevitable result of the reversal of supply and demand. Texas Instruments mentioned in its earnings call that automotive customers' inventory has been pressed to low levels, and a slight recovery in terminal demand will trigger large-scale restocking. The momentum for price hikes will continue to be released in the second half of the year.
02. Prosperity Differentiation in Sub-Segments, Three-Tier Pattern Emerges
The biggest characteristic of this round of automotive semiconductor recovery is structural differentiation, which will not repeat the across-the-board price surge seen in 2022. According to the degree of prosperity, it can be divided into three tiers. The differentiation stems from the demand differences in 800V high-voltage platforms, advanced autonomous driving, and basic body electronics, and also reflects the pace of domestic substitution of automotive chips in China.
The first tier includes SiC, high-voltage IGBTs, and automotive power analog chips, maintaining a strong upward trend overall. SiC is the core leading category in this upward cycle, with the core driving force coming from the popularization of 800V high-voltage fast-charging platforms. The per-vehicle value of power semiconductors in traditional 400V NEVs is about $200-$300, which directly increases to $700-$1,000 after upgrading to the 800V platform. Main drive inverters, automotive OBCs, and DC-DC power systems are using SiC devices on a large scale, helping vehicles reduce losses, improve charging speed, and optimize energy consumption performance. In 2026, domestic sales of 800V new cars are expected to exceed 4 million units for the whole year, and the penetration rate of SiC main drives within 800V models will reach 77%. From January to May, the overall installation rate of SiC in domestic NEVs reached 30.9%, and the growth rate of the automotive SiC market for the whole year is expected to exceed 32%. The global 6-inch automotive-grade SiC substrate capacity is already fully loaded, and orders for leading enterprises are scheduled to extend to 2027. Products from Wolfspeed and Infineon continue to be in short supply. Domestic companies like StarPower and BYD Semiconductor have completed batch installation of SiC modules, ushering in a window for capacity release. Coupled with external demand from energy storage and industrial photovoltaics, the SiC supply-demand gap continues to expand, and prices are steadily rising.
High-voltage IGBTs follow SiC in strengthening synchronously. The volume increase of hybrid models further opens up demand space, with pure electric and hybrid vehicles jointly pulling the demand for electronic control IGBTs. In 2026, the domestic automotive IGBT market size is expected to exceed 15.7 billion RMB, a year-on-year increase of 22.3%. Infineon and onsemi control high-end capacity and prioritize supply to overseas automakers. Domestic independent brands are increasing the procurement proportion from local manufacturers, accelerating the domestic substitution of power semiconductors. Automotive high-voltage PMICs and isolated analog chips benefit from the increase in vehicle power consumption and the large-scale popularization of domain controllers. Their delivery lead times continue to lengthen, and the price increase amplitude is among the top in analog chips.
The second tier includes high-end 32-bit automotive-grade MCUs, automotive NOR Flash, and automotive DRAM, which are in a state of moderate recovery overall. The polarization within the MCU track is very prominent. The supply of low-end 8-bit body control MCUs is oversupplied, prices are under pressure, and domestic manufacturers face fierce homogeneous competition. The demand for high-end 32-bit MCUs used in cockpit domains, autonomous driving domains, and powertrain domains is improving. The unit price of high-end MPUs from NXP and STMicroelectronics exceeds $60. Meanwhile, 8-inch capacity is continuously squeezed by AI computing power, supply continues to tighten, and prices are gradually stabilizing and recovering. Local 32-bit automotive-grade MCUs from GigaDevice and SemiDrive have successively passed automaker certifications, entering the整车 (whole vehicle) supply chain to undertake overflow orders from overseas.
Automotive memory chips have seen a significant recovery and have become a major source of cost pressure for automakers. Advanced autonomous driving requires large-capacity storage and computing power cache to match. NOR Flash is used to store cockpit and autonomous driving programs, while automotive DRAM ensures the stable operation of domain controller computing power. The AI industry is seizing mature flash memory capacity. Samsung and Kioxia are reducing 55nm and above NOR mature process capacity, tilting resources towards HBM and high-end NAND. The contract price of automotive NOR has accumulated an increase of over 100% in the first half of the year, and the upward trend continues in the second half. Relevant personnel from the supply chains of XPeng and Li Auto have publicly warned that the supply satisfaction rate of automotive storage in the second half of the year is less than 50%. Automakers can only lock prices and secure supply through long-term orders. Memory chips have become another scarce component after power devices.
The third tier includes low-voltage MOSFETs, basic body components, and general discrete devices, maintaining steady fluctuations overall. These products have relatively low technical thresholds, and global supply is sufficient. After two years of inventory digestion, channel stockpiling is abundant. Demand fluctuates slightly with vehicle sales, and there will be no large-scale shortages or price hikes. It belongs to the buffer sector for automakers to control hardware procurement costs.
03. Growth Logic Switches, Growth Space Continues to Broaden
This upward cycle is essentially different from the2022 market driven solely by vehicle sales. The growth rate of global NEV sales has slowed down, the pace of penetration rate improvement in Europe has slowed, and the domestic auto market has entered stock competition. However, the semiconductor content per vehicle continues to rise. Software-defined vehicles and the transformation of整车 (whole vehicle) E/E (Electrical/Electronic) architecture are the core growth mainlines of the industry, which can offset the demand disturbances caused by fluctuations in vehicle shipments.
The traditional distributed electronic architecture is iterating towards domain controllers and central computing platforms. The整车 (whole vehicle) electronic system is streamlined from dozens of independent ECUs to three major computing units: powertrain domain, cockpit domain, and autonomous driving domain. The computing power, storage, and interface specifications of a single chip have been significantly improved. The physical number of chips has decreased, but the semiconductor value per vehicle has clearly increased. The landing of advanced autonomous driving drives the installation of supporting chips for LiDAR, millimeter-wave radar, automotive Ethernet, and HD cameras. The chip value per vehicle has increased 3-5 times compared to traditional ICEs (Internal Combustion Engine vehicles).
Diversified application scenarios open the industry ceiling. The electrification of commercial vehicles, unmanned delivery vehicles, and special vehicles in ports and mining areas are gradually landing, driving the expansion of power device and MCU demand. 6G automotive communication and V2X (Vehicle-to-Everything) are entering pre-commercialization. Automotive high-speed optical interconnection is being installed on a small scale. InP (Indium Phosphide) optical chips and automotive Ethernet chips bring entirely new increments. Industry growth no longer relies solely on private passenger vehicles, making the demand structure more robust.
Relying on the domestic整车 (whole vehicle) market, the domestic supply chain ushers in a golden window for the domestic substitution of automotive chips. In the power semiconductor field, StarPower, CRRC Times Electric, and BYD Semiconductor occupy the main shares of domestic automotive IGBTs and SiC. In the MCU track, GigaDevice and Espressif continue to promote automotive-grade product certifications. In the direction of automotive NOR storage, products from GigaDevice and Puya Technologies continue to ship in large volumes. The upstream manufacturing, packaging and testing, equipment, and materials supply chains are collaboratively improving, and the anti-cyclical capability of the local supply chain is continuously strengthening.
At the same time, the industry also faces multiple potential risks that will constrain the pace of the upward trend. First, the recovery of terminal consumption falls short of expectations. If the domestic price war continues and NEV demand in Europe and the US declines, the restocking pace of automakers will be slowed, the upward cycle will be prolonged, and the price increase amplitude of high-end chips will narrow. Second, the concentrated release of SiC capacity poses a risk of long-term oversupply. In 2027, multiple 6-inch and 8-inch SiC substrate production lines at home and abroad will complete capacity ramp-up. Low-end SiC devices may experience oversupply, and prices will decline. Additionally, if AI computing capital expenditure shrinks in stages, 8-inch wafer capacity will partially flow back to the automotive field, and the shortage of automotive-grade chips will marginally ease. Newly built 8-inch high-voltage power production lines from overseas giants are gradually put into production. After two years, supply pressure will be gradually released, breaking the current tight balance pattern.
In the short term, from the second half of 2026 to the first half of 2027, with the complete landing of整车 (whole vehicle) restocking, the tight pattern of 8-inch mature processes will be difficult to alleviate quickly. SiC, high-voltage IGBTs, high-end automotive-grade MCUs, and automotive storage will maintain both volume and price increases. The industry's annual revenue is expected to achieve double-digit growth. In the medium term, as global wafer and SiC new capacities are released, supply and demand will shift from shortage to a stable balance. The growth mainline will switch to the increase in per-vehicle electronic value brought by 800V high-voltage platforms and advanced autonomous driving. Industry cyclical fluctuations weaken, and growth characteristics are further highlighted.