Editing by Greg Gao
The global display driver IC supply fell short of demand by over 50% in the second quarter of this year. But now the supply reaches 80% customer demands, and the driver IC shortage will be further alleviated next year, JW Insights learned.
Over the past year, due to the tight supply of silicon wafers, various IC products were out of stock, hurting the display driver ICs market.
Since the second half of 2020, the coronavirus pandemic fueled the growth of the stay-at-home economy, which resulted in explosive demand for consumer electronics such as laptops and TVs. Meanwhile, the 5G, servers, data center, and electric vehicle sectors were also booming. As a result, the display driver IC supply became tight, and the industry experienced severe shortages.
The current supply of driver ICs is still insufficient, with the decline in application device market demand, LCD panel prices have also fallen to varying degrees. The price of various display driver ICs fluctuates with supply and demand changes.
Lin Yongjie, Chairman of Fitipower Integrated Technology(天鈺科技), a design company of power management IC and TFT-LCD driver IC, said, “In May and June this year, our company could only meet 50% of customers' orders, but recently we have been able to deliver 80%. We took this opportunity to build a relatively healthy inventory.”
Hu Shubin, CEO of ASUS, a computer and phone hardware company headquartered in Taipei, also pointed out that the PC market is still in short supply, but the shortage of IC chips and display panels has begun to ease. The inventory has gradually returned to a healthy level.
Another IC design company executive told JW Insights,“At present, the demand for large-size display panel driver ICs has indeed declined, but the main reason is that plants cannot operate at full capacity due to the impact of the Covid-19. However, the overall supply of small and medium-sized panel driver ICs is still deficient. Overall, the industry supply may reach nearly 80% of the market demand."
Regarding product price changes, the above executive said, “Eight-inch wafers will continue to be in short supply, and the prices of large-size panel driver chips enjoyed a strong increase in the first half of the year and indicate an upward trend in the near future. It is projected that TDDI(Touch and Display Driver Integration) prices will stabilize.”
"The thriving streaming media platforms such as Netflix, Apple+, and Disney+ are leading to surging demand for TVs, so I think the price of large-size panel driver ICs is unlikely to fall even if the current price is stable. Meanwhile, the small-size panel driver demand is still strong, and the production capacity of fabs is insufficient, so there is no chance that prices will fall," he added.
According to industry research company Sigmaintell Consulting, with the Chinese mainland and Taiwan foundries increasing their new wafer production capacity, the supply-demand ratio of global display driver ICs is expected to turn positive in the first quarter of 2022. The full-year supply-demand ratio is estimated to shift from -4.4% to 2.7% next year.
While supply insufficiency will be eased, there will still be seasonal fluctuations and structural risks. With the increasing stock in the peak season for consumer electronics, the display driver IC supply-demand ratio will stabilize to a tight balance in the second half of 2022, predicted Sigmaintell.
