US export controls are starting to have a chilling effect on the purchasing of Chinese made display panels and further restrictions could be applied, according to TrendForce.
The market analysis firm has said that US government agencies are taking note of advantages China has in the development of display technologies and how China is building up its panel production capacity.
TrendForce added that electronics OEMs are developing back up plans for alternative supply sources in case the US further broadens the scope of its export controls against Chinese companies. In this regard it is the mere possibility of further sanctions is having a chilling effect.
TrendForce said the US is unlikely to directly impose controls on the Chinese manufacture of display panels in the short term but the upstream supply chain, particularly with regard to the production of driver ICs and GPUs is starting to have an impact.
TrendForce said the display supply chain is dividing between one that totally excludes Chinese content and that is acceptable outside China, and one that is “de-Americanized” and suitable for China. In other words there is a self-organizing decoupling of the display panel supply chain.
“As for foundries and OSAT providers, decoupling has begun in accordance with the decisions of some downstream customers. In the future, there is a distinct possibility that Chinese IC design houses, foundries and OSAT providers could be barred from participating in the supply chains for the product models targeting the US market,” said TrendForce, in a statement.
Chinese foundries make about 25 percent of the world’s large-sized driver ICs while Taiwan foundries make about 40 percent, TrendForce estimate.
If the US government does impose restrictions seeking to prevent Chinese foundries from making driver ICs then the supply chain for display panels will be hit by supply shortages.
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