The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce recently issued the latest Unverified List (UVL) which includes ChuZhou HKC Optoelectronics Technology Co., Ltd., according to TrendForce’s investigations. The announcement states that if U.S. suppliers wish to ship products to companies on the UVL, they can still submit documentation to obtain a shipping license. According to TrendForce’s understanding, the primary reason ChuZhou HKC is included on the UVL is that it plans to import panel-related analytical instruments from the United States in the near future, and actions taken by BIS are not indicative of the Chinese panel industry as a whole. Currently, ChuZhou HKC is in the process submitting proposals and negotiating with its U.S. material suppliers, thus TrendForce’s assessment is that there is no impact on the supply and shipment of ChuZhou HKC products for the time being.

It should be noted that according to TrendForce statistics, HKC’s Chuzhou plant will account for only 3.8% of global LCD panel capacity in 2022, which is a fairly insignificant share. However, this plant accounts for 30% of HKC’s own capacity, thereby playing a pivotal role in company production. The Chuzhou factory primarily produces TV panels and monitor panels, among which TV panels account for nearly 80% of the factory’s production. If the current ban cannot be resolved smoothly, it will impact shipments of HKC TV panels.

In addition, the glass substrates used in HKC’s Chuzhou factory are sourced from multiple glass substrate suppliers, with approximately 40% coming from Corning, a U.S. supplier. Since Corning localized it production according to the location of panel makers, it is not expected to be limited by the restrictions on the export of U.S. production to China enumerated on the UVL, but detailed regulations are still awaiting clarification. At present, the supply of materials has not been affected, HKC’s Chuzhou plant maintains normal operation, and its clients have yet to move panel procurement away from the Chuzhou production line.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

Benefiting from expanded introduction of AMOLED mobile phone models by Apple, Samsung and Chinese brands, the market penetration rate of AMOLED panels for mobile phones in 2021 was 42%, according to TrendForce‘s investigations. In 2022, continuous investment undertaken by numerous panel factories to expand AMOLED production lines will drive AMOLED panel penetration rate to an estimated 46%. However, TrendForce further asserts that the continued tight supply of AMOLED DDI and the willingness of mobile phone brands to expand the use of AMOLED panels will be the keys influencing AMOLED market penetration rate next year.

Continued tightness in AMOLED DDI supply for mobile phones

The AMOLED DDI process requires dedicated medium voltage 8V processes at the 40nm and 28nm nodes. However, the supply of dedicated process capacity in 2021 is limited. In addition, Samsung’s Austin, Texas fab was shut down due to a snowstorm in early 2021, resulting in serious shortages of AMOLED DDI. New capacity in 2022 includes UMC at the 28nm node and SMIC at the 40nm node. However, since capacity and expanded capacity still cannot effectively meet the various brand’s demand for AMOLED DDI, Samsung’s fab will continue to reduce OLED DDIC production scale in the future. Stocking issues are expected to plague AMOLED DDI continuing into 2022.

TrendForce states, UMC’s primary expansion plan for 28nm AMOLED DDI will be completed by the end of 2023, so AMOLED DDI supply tightness is expected to be alleviated in 2023. In addition, other foundries have plans to develop dedicated AMOLED DDI processes but, due to a belated development schedule, these plans will not be able to address the AMOLED DDI shortage in 2022. Facing limitations on dedicated AMOLED DDI production capacity, traditional front-line DDI design houses are actively booking the majority of production capacity, while other DDI design houses are also competing for limited production capacity in order to enter the AMOLED panel factory supply chain.

Mobile phone brands expand their willingness to adopt AMOLED panels

Facing the gradual maturity of AMOLED panel technology and the continuous improvement of production yields, AMOLED market penetration rate will increase from 42% in 2021 to 46% in 2022. This will reduce the market share of LTPS panels in the mid-tier market and drive panel makers to transfer LTPS production capacity to medium size applications. However, mobile phone brands face the risk of AMOLED DDI continuing to being out of stock in 2022. In addition to the high price of AMOLED panels and the steady increase in the pricing of other semiconductor components, in order for mobile phone brands to maintain profitability and achieve annual shipment goals, TrendForce expects that a small number of AMOLED products may switch over to LCD panels to pad shipments in the mid-to-low-end mobile phone market, allowing LTPS panel makers to gain a bit of breathing room in the mid-end market.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

Display panels contain certain semiconductor parts, including driver ICs, TCONs, and LCD PMICs; the price trends of these ICs used in different applications depend on their respective supply and demand situations. Not only has demand for driver ICs used for TVs, Chromebooks, and consumer IT displays declined ahead of other applications, but panel suppliers have also accumulated a considerable inventory of driver ICs for these aforementioned products, according to TrendForce’s latest investigations. Hence, these driver ICs may see their prices stagnate in 4Q21. Nevertheless, although driver IC suppliers will not be able to offload the foundry costs for driver IC manufacturing to panel suppliers entirely, panel suppliers are still expected to procure additional driver ICs in order to avoid possible shortages, since demand for commercial IT displays and driver ICs used in these displays still exists. TrendForce therefore expects driver IC prices to experience a minor price hike in 4Q21.

It should be pointed out that certain TCONs and LCD PMICs are experiencing either shortages or excessive lead times. Furthermore, TSMC will raise the prices of their mature foundry process technologies in 4Q21 by a relatively high margin. Taking these factors into account, TrendForce expects TCON and PMIC prices to remain in an uptrend for the quarter. With regards to smartphone TDDI, the decline in client orders for 4Q21 means that smartphone TDDI will not continue to undergo a price hike in 4Q21. Conversely, smartphone OLED DDIC prices are likely to remain bullish in 4Q21 for the following reasons: First, foundries’ production capacities for smartphone OLED DDIC are currently insufficient. Second, this product category involves a high level of technological barrier to entry in terms of IC design, meaning there are very few IC design companies capable of offering a stable supply of OLED DDIC; smartphone manufacturers are therefore scrambling to book OLED DDIC orders for next year’s handsets.

On the other hand, IC design companies have traditionally sold driver ICs, TCONs, and PMICs as a bundle to panel suppliers during shortages because bundling these components not only increases their sales volumes, but also ensures that panel suppliers receive these components in matching inventory levels. Despite rumors pointing to a possible price hike of driver ICs, TrendForce believes that, given the ongoing shortage of TCONs and PMICs, products sold as a bundle are likely to undergo successful price hikes.

After experiencing component shortages for more than a year, panel suppliers are projected to more carefully address issues of IC procurement and inventory management. On the whole, driver IC prices for 4Q21 will likely remain relatively unchanged from the previous quarter. Looking ahead to 2022, TrendForce expects the demand for display panels to trend downwards during the cyclical downturn of 1H22. This bear market, along with the fact that display manufacturers still need to use up their existing inventory of display panels, means that panel suppliers will almost certainly revise down their driver IC procurement. At the same time, as certain foundries gradually ramp up their driver IC production, the gap between supply and demand of driver ICs will in turn diminish. In other words, potential risks of driver IC shortage will also become slowly mitigated. For driver IC suppliers, their primary challenge for 2022 will be the ability to dynamically adjust their operations between peak demand and low demand periods. Consequently, IC suppliers that possess more robust operations and more diverse product portfolios will also hold the competitive advantage.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

The impact on display panel production in China caused by the ongoing power outage has been manageable, although assembly plants in the downstream supply chain and component makers（for metal and plastic parts, for example）in the upstream supply chain have had to suspend operations as a result. Nevertheless, assuming these work stoppages conclude by the end of September, the aforementioned companies in the downstream/upstream supply chains will likely be able to make up for their lost production capacities by issuing overtime work. Hence, the power outage’s impact on their operations is ultimately expected to be rather limited.

In addition, it appears that the power outage will NOT affect the installation of new production capacities at all. However, given that power outages have continually taken place in cities including Guangzhou and Suzhou, attention needs to be paid to whether such power outages become a regular, cyclical occurrence for various cities in the future, especially without prior warning. Frequent, unannounced power outages may pose a challenge to panel manufacturers’ capacity allocation efforts.

（Image credit: Unsplash）

In this press release, TrendForce details 10 major trends that are expected to take place across various segments in the tech industry, as follows:

Micro/Mini LED display development will revolve around active matrix solutions

A substantial number of technical bottlenecks in Micro LED development will still persist in 2022. While Micro LED manufacturing costs are expected to remain sky-high due to these bottlenecks, companies have not shown decreased willingness to participate in all segments of the Micro LED supply chain. On the contrary, these companies are actively expanding their respective production lines. Regarding the development of self-emitting Micro LED display products, TVs represent one of the major directions of mainstream Micro LED development, primarily because TVs, compared to IT products, have a relatively low technological barrier of entry. In other words, Micro LED TVs are easier to develop than are other Micro LED display products. For instance, after releasing a 110-inch commercial passive matrix Micro LED display, Samsung will likely continue to develop 88-inch (and under) consumer-grade active matrix Micro LED TVs. This extension of Micro LED technology from the large-sized commercial display segment to the household-use segment by Samsung is in turn indicative of the overall expansion of the Micro LED market.

Regarding display products equipped with Mini LED backlights, brands have been raising the number of Mini LED chips used per panel in an attempt to boost the specs of their display products and pursue 1:1,000,000 high contrast ratios that are comparable to OLED displays. As a result, Mini LED backlight panels’ LED chip consumption is more than 10 times higher compared to traditional LED backlight panels, in addition to the fact that Mini LED backplane manufacturing requires SMT equipment with a higher degree of accuracy and production capacity. While Mini LED backlights are primarily based on passive matrix solutions, they will move towards active matrix solutions going forward, with a corresponding surge in Mini LED chip consumption. Hence, the performance and capacity of SMT equipment will also become one of the key criteria in brands’ selection of potential supply chain partners.

More advanced AMOLED technology and under-display cameras will usher in the next stage of smartphone revolution

As the supply of and production capacity for AMOLED panels continue to rise, AMOLED technology has also become increasingly mature. Leading suppliers are still attempting to tack on additional functions and improved specs to their AMOLED panels in order to not only raise said panels’ added values, but also maintain the competitive advantages of the suppliers themselves. The primary value added to AMOLED panels in 2022 will likely continue to be the ever-improving foldable designs, which will feature optimized weight reduction and power efficiency. Apart from mainstream foldable phones that can unfold to reach tablet-like sizes, clamshell-like designs such as flip-up and flip-down smartphone bodies will also emerge as a form factor that more closely resembles the smartphones currently in use. Furthermore, retail prices of foldable phones are expected to generally fall within the price bands of mainstream flagships, thereby generating sales growths for the upcoming foldable models. Other foldable designs, including form factors with even more folds or rollable form factors, are expected to enter production within the near future. TrendForce expects foldable phones to reach a penetration rate of more than 1% in 2022 and 4% in 2024. LTPO panels, on the other hand, are an effective solution to power consumption issues arising from the adoption of 5G technology and high refresh rate displays. Hence, LTPO panels will likely gradually become the mainstream display panel for flagship smartphones. After two years of development and adjustments, under-display camera modules will finally make their appearance in various brands’ flagship models and enable the creation of smartphones with true full-screen displays.

The foundry industry welcomes the arrival of 3nm process technology courtesy of TSMC’s FinFET and Samsung’s GAA technologies

As semiconductor manufacturing processes gradually approach physical limits, chip development must now turn to either “changes in transistor architecture” or “breakthroughs in back-end packaging technology or materials” in order to achieve faster performances, reduced power consumption, and smaller footprints. After incorporating EUV lithography at the 7nm node in 2018, the semiconductor industry will welcome yet another revolutionary process technology in 2022 – the 3nm node. More specifically, TSMC and Samsung are expected to announce their respective 3nm process technologies in 2H22. While the former will continue to adopt the FinFET architecture that it has been using since the 1Xnm node, Samsung will for the first time utilize its own implementation of GAAFET, called MBCFET (multi-bridge channel field-effect transistor) for its 3nm process technology.

In contrast with the FinFET architecture, in which the gate makes contact with the source/drain channel on three sides, the GAAFET architecture consists of a gate that surrounds the nanowire or nanosheet channel on four sides, thus increasing the surface area of contact. The GAAFET design significantly reduces leakage currents by giving the gate a greater degree of control over the channel. Regarding possible applications, the first batch of products mass produced at the 3nm node in 2H22 is expected to primarily be HPC and smartphone chips since these products place a relatively high demand on performance, power consumption, and chip compactness.

While DDR5 products gradually enter mass production, NAND Flash stacking technology will advance past 200 layers

The three dominant DRAM suppliers (Samsung, SK Hynix, and Micron) will not only gradually kick off mass production of next-gen DDR5 products, but also continue to increase the penetration rate of LPDDR5 in the smartphone market in response to demand for 5G smartphones. With memory speed in excess of 4800Mbps, DDR5 DRAM can massively improve computing performances via their fast speed and low power consumption. As Intel releases its new CPUs that support DDR5 memory, with Alder Lake for the PC segment, followed by Eagle Stream for the server segment, DDR5 is expected to account for about 10-15% of DRAM suppliers’ total bit output by the end of 2022. Regarding process technologies, Samsung and SK hynix will kick off mass production of 1 alpha nm products manufactured with EUV lithography. These products’ market shares will likely increase on a quarterly basis next year.

Turning to NAND Flash products, their stacking technologies have yet to reach a bottleneck. Hence, after 176L products entered mass production in 2021, suppliers will continue to migrate towards 200L and above in 2022, although these upcoming products’ chip densities will remain at 512Gb/1Tb. Regarding storage interfaces, the market share of PCIe Gen4 SSDs will likely skyrocket in the consumer PC segment next year. In the server segment, as Intel Eagle Stream CPUs, which support PCIe Gen 5, enter mass production, the enterprise SSD market will also see the release of products that support this interface. Compared to the previous generation, PCIe Gen 5 features double the data transfer rate at 32GT/s and an expanded storage capacity for mainstream products at 4/8TB in order to meet the HPC demand of servers and data centers. Additionally, the release of PCIe Gen 5 SSDs is expected to quickly raise the average data storage capacity per server unit.

Regarding the server market, flexible pricing schemes and diverse services offered by CSPs have directly propelled the cloud service demand of enterprises in the past two years. From the perspective of the server supply chain, the predominant business model has gradually transformed from traditional server brands to ODM Direct, meaning that traditional server brands will see fundamental, structural changes, such as providing colocation servers or full-service cloud migration support, in their business models. This shift also means that enterprise clients will come to rely on more flexible pricing schemes and diverse risk mitigation measures in response to an uncertain global environment. In particular, while the pandemic accelerated changes in work and everyday life in 2020, hyperscalers are expected to account for nearly 50% of total demand for servers in 2022. In addition, the growth in ODM Direct server shipment is expected to surpass 10% YoY as well.

Mobile network operators will undertake more trial projects for 5G SA network slicing and low-latency applications

Mobile network operators have been actively release 5G SA (standalone) networks as the core network powering various services around the world, in turn accelerating the build-out of base stations in major cities, diversifying their network services (via network slicing and edge computing), and delivering end-to-end networks with a high degree of quality assurance. Moving to 2022, applications that are at the intersection of 5G, massive IoT, and critical IoT will emerge in response to enterprise demand. These applications, including light switches, sensors, and thermostats used in smart factories, involve the combination of network endpoints and data transmission. In particular, critical IoT applications include smart grid automation, telemedicine, traffic safety, and industrial automation, whereas critical IoT use cases within the context of Industry 4.0 include asset tracking, predictive maintenance, FSM (field service management), and logistics optimization.

Now that the pandemic has forced enterprises to engage in digital transformation and brought changes to the general public’s lifestyles, the importance of 5G deployment has become increasingly apparent. Private 5G networks, openRAN, unlicensed spectrums, and mmWave developments have also generated a diverse ecosystem that ranges from traditional mobile network operators to other emerging service providers, including OTT media service providers, CSPs, social media, and online businesses. In the future, mobile network operators will likely actively expand their enterprise 5G applications. For instance, O2’s 5G-ENCODE project explores new business models in industrial 5G networks, while Vodafone is collaborating with the MFM (Midlands Future Mobility) consortium to test networks for autonomous vehicles.

Satellite operators will compete over the low-earth orbit satellite market, with 3GPP now supporting non-terrestrial networks

3GPP recently announced that Release 17 Protocol Coding Freeze will take place in 2022. Release 17 represents the first time 3GPP has incorporated NTN (non-terrestrial network) communications into its releases and therefore marks a significant milestone for both the mobile communications industry and the satellite communications industry. Prior to this, mobile communications and satellite communications had been two separate, independently developing industries. That is why companies working across the two industries in the upstream, midstream, and downstream supply were generally different as well. After 3GPP includes NTN in its upcoming release, the two industries are likely to generate more opportunities for collaboration and co-create brand new innovations. Regarding the deployment of LEO (low earth orbit) satellites, US-based SpaceX has applied to launch the highest number of satellites among all satellite operators. Other major operators include Amazon, UK-based OneWeb, Canada-based Telesat, etc. Region-wise, US operators account for more than 50% of all satellites launched. Not only do LEO satellites have the advantage of signal coverage that is unaffected by geographical features, such as mountainous regions, oceans, and deserts, but they are also able to synergize with the 5G network. The ability of LEO satellites, as part of the NTN, to enhance 5G communications makes them a crucial component in the 3GPP Release 17. TrendForce therefore forecasts an increase in global satellite revenue in 2022.

While smart factories are among the first to leverage digital twins, IoT technologies are expected to become the backbone of the metaverse

The new normal that emerged in the wake of the COVID-19 pandemic continues to propel demand for contactless devices and digital transformations. As part of this evolution, IoT development in 2022 will likely focus on CPS (cyber-physical systems), which combines 5G, edge computing, and AI technologies to extract and analyze valuable information from vast data streams for the purpose of smart automation and prediction. A current example of CPS applications is the digital twin, used for such verticals as smart manufacturing and smart cities; while CPS integration for the former facilitates design, testing, and manufacturing simulations, the latter make use of CPS to monitor significant assets and assist in policymaking. Now that industrial realities have become more complex, and the interplay between usage cases and equipment have increasingly demanded attention, digital twins will subsequently be deployed to a wider range of applications. Paired with 3D sensing, VR, and AR capabilities, IoT-based metaverse will likely emerge as a smart, complete, real-time, and safe mirror to the physical world, and the first application of IoT-based metaverse is expected to be smart factories. Ultimately, technological innovations in data collection (including visual, auditory, and environmental data via sensors), data analysis (via AI platform integration), and data integrity (via blockchains) will also emerge as a result of IoT development.

AR/VR equipment manufacturers aim to deliver fully immersive experiences via integration of additional sensors and AI processing

The COVID-19 pandemic has fundamentally changed the way people live and work. For enterprises, the pandemic not only accelerated their pace of digital transformation, but also increased their willingness to integrate emerging technologies into their existing operations. For instance, AR/VR adoption for applications such as virtual meetings, AR remote support, and virtual design has been on the rise recently. On the other hand, companies will likely focus on various remote interaction functionalities in virtual communities and online games as an important AR/VR market segment. TrendForce therefore believes that the AR/VR market will expand by a considerable margin in 2022 due to the falling retail prices of AR/VR hardware as well as the growing adoption of such hardware for various use cases. Furthermore, the market will also continue to pursue more realistic AR/VR effects, such as applications that feature more realistic images constructed by software tools or the creation of virtual responses from real-world data assisted by either AI processing or the integration of various sensors. For instance, eye-tracking functionalities will become an optional feature of consumer products released by Oculus and Sony. Apart from these examples, AR/VR solutions may even evolve to the point where they are able to provide partial haptic feedback to the user through controllers or other wearable devices in order to deepen user immersion.

A natural extension of autonomous driving technology, automated valet parking is set to resolve drivers’ pain points

As part of autonomous driving technology’s implementation aimed at improving everyday life, AVP (automated valet parking), an SAE level 4 driverless parking service, is expected to become an important optional function of high-end vehicles beginning in 2022. Relevant international standards are currently being drafted and are expected to facilitate the adoption of AVP going forward. However, since AVP systems differ according to vehicle specifications, they are subject to various restrictions related to driving conditions, including fixed/unfixed routes and private/public parking spaces, while parking lot conditions such as wireless network connectivity and the comprehensiveness of traffic markings can also affect the viability of AVP. The distance between people and the vehicle during AVP use, on the other hand, is governed by domestic laws. In view of automakers’ diverse technological roadmaps, AVP parking routes are generated by either local computing on the vehicle end or cloud computing, the latter of which requires sufficient network connectivity in order to function. The former is therefore expected to see usage in a wider variety of use cases. Alternatively, some vehicles may be equipped with both computing solutions. With other such factors as V2X and high-definition maps affecting the range of AVP applications, TrendForce expects an increasing number of different AVP solutions to be under development at the moment.

The third-generation semiconductor industry will move towards 8-inch wafers and new packaging technologies while expanding in production capacity

The gradual phasing out of ICE vehicles by various governments across the 2025-2050 period is set to both accelerate the pace of EV sales and increase the penetration rate of SiC and GaN devices/modules. Energy transition activities worldwide as well as the rapid growth of telecom applications such as 5G technology have also led to a persistent bull market for third-generation semiconductors, resulting in strong sales of SiC and Si substrates. However, as current efforts in substrate production and development are relatively limited, suppliers are able to ensure a steady yield of SiC and GaN substrates only by manufacturing them with 6-inch wafers. Such a limitation has, in turn, led to a long-term shortage in foundries’ and IDMs’ production capacities.

In response to this quandary, substrate suppliers, including Cree, II-VI, and Qromis, are now planning to not only expand their production capacities in 2022, but also migrate their SiC and GaN production to 8-inch wafers, in hopes that these plans will gradually alleviate the prevailing shortage in the third-generation semiconductor market. On the other hand, foundries such as TSMC and VIS are attempting to shift to 8-inch wafer fabrication for GaN on Si technology, while major IDM Infineon is releasing products based on the latest CoolSiC MOSFET, delivering trench designs that enable significant power efficiency for semiconductor devices. Finally, telecommunication component provider Qorvo has also released a new GaN MMIC copper flip chip packaging architecture for military applications.