Zhong Wei Semiconductor: Insufficient Chip Supply Causes E-cigarette Shortage

Business by 2FIRSTS.ai

Dec.22.2023

Zhong Wei Semiconductor: Insufficient Chip Supply Causes E-cigarette Shortage

Chinese semiconductor manufacturer, Zhong Wei Semiconductor (688380), received inquiries from various institutions regarding chip shortages in the e-cigarette industry.

On December 21st, Zhongwei Semiconductor (688380) issued a statement announcing that the company had undergone institutional research on December 20th, 2023. The research was conducted by institutions such as China Securities, Morgan Stanley, Zhongyong Capital, Donghai Securities, Changjiang Securities, Great Wall Fund, Yiheng Investment, Mingda Asset Management, Minsheng Jia Yin, Jianxin Fund, and Xinda Ouya.

An inquiry has been made into the reasons behind and current status of chip shortages in the e-cigarette sector. In response, Zhongwei Semiconductor stated that there are three main causes for the chip shortage in the e-cigarette sector. Firstly, there has been an increase in the prevalence of MCU (microcontroller unit) in e-cigarette solutions, leading to a higher demand for e-cigarette solutions that incorporate MCU. Secondly, this sudden surge in demand has caught the company off-guard, especially considering the high inventory levels. As a result, the company failed to adequately prepare for the increased demand. Thirdly, downstream distributors and customers have limited stock, which has further exacerbated the shortage situation as the demand is directly shifting to the original manufacturer. However, through urgent coordination of production capacity, the company has gradually started to replenish products, leading to a gradual easing of the shortage situation.

References:

[1] 中微半导：12月20日接受机构调研，包括知名机构明达资产的多家机构参与

Also Read:

[1] Colombia Penalizes E-Cigarette Company for Endangering Underage Consumers

[2] BAT Considers Reducing Stake in Indian Company ITC

#E-cigarettes #Asia #Open system e-cigarettes #Market #China #Products #E-cigarette #E-cigarettes and Tobacco

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