Display drivers in high demand, but not as profitable, warns IHS Markit
In 2022, demand for driver ICs will once again grow to 7.7 billion units, but lower prices mean revenue growth will remain in negative territory, reports Vicki Chen, senior research analyst at IHS Markit.
Display module demand is saturated for LCD TVs, desktop monitors, notebook PCs, tablets, smartphones and other major applications, which has decreased demand for driver ICs through 2021. However, as unit shipments of 8K TV panels rises to 10 million units in 2024, driver IC demand will also start to increase. Even so, driver IC revenue will continue to decline, as Chinese companies invest more aggressively in the market, which will drive prices even lower.
TV panels use the most driver ICs of any application. In fact, 30 percent of all driver ICs are used in televisions, that is because displays with higher definition require more driver ICs than displays with lower resolution. Generally speaking one full-high-definition (FHD) TV requires 6 source driver IC chips, while an 8K TV panel requires 24 source driver IC chips.
Half of all TV panels shipped in 2019 will be 4K panels, rising to 60 percent in 2023.
Consequently source driver IC demand will also increase this year. On the other hand, as more panel makers adopt gate-on-array (GOA), dual-rate-driving (DRD), triple-rate-driving (TRD) and other technologies, the number of driver ICs required per panel will fall. GOA will reduce gate driver IC demand, while DRD and TRD will reduce source driver IC demand. Also, total TV panel unit demand will saturate. Total Driver IC demand will decline slightly until 2021. Beginning in 2022, 8K TV panel will have a major impact on TV panel driver IC demand, causing demand to rise.
Smartphone driver IC demand accounts for approximately 70 percent of the small and medium-sized display market. However, the smartphone market is also saturated, which will lead to sluggish growth in the future.
Tight supply for driver ICs
Overall driver IC supply has been tight for almost for three years, due to foundry capacity tightness. Chip-on-film (COF), which is used to bond the driver IC to the display panel, is in short supply, and driver IC supply stability has been an issue in the industry for many years. While driver IC unit prices have been stable for three years, the situation may change as driver-IC wafer capacity is expected to increase.
In the coming years, mainland China will continue to focus on semiconductor development, in order to gradually decrease reliance on imports, which will lead to increased investment in wafer foundries. For example, Nexchip has already begun mass production in the second half of 2018, with an initial capacity of 10,000 sheets of 12-inch wafers per month, which will grow to 40,000 sheets per month in 2019. New fabless driver IC makers in China will also join the market, further increasing competion and leading to even lower prices in the coming years.
IHS markit – www.ihsmarkit.com
If you enjoyed this article, you will like the following ones: don't miss them by subscribing to :
