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 stay-at-home economy generated by the COVID-19 pandemic has galvanized a rising demand for IT products this year, with a corresponding increase in DDI demand as well, according to TrendForce’s latest investigations. More specifically, large-sized DDI demand is expected to increase by as much as 7.4% YoY in 2021, although the availability of 8-inch foundry capacity in the upstream supply chain is expected to increase by a mere 2.5% YoY due to other chips with relatively higher margins occupying much of this capacity. Foundries such as NexChip and SMIC are still continuing to install production capacities this year, and the supply of large-sized DDI will undergo a slight increase as a result. However, these newly installed capacities will be unable to fully alleviate the scarcity of large-sized DDI, which may potentially persist until the end of 2021.

While the supply of TCON similarly faces the issue of shortage, high-end TCON models bear the brunt of the impact

In addition to the tight supply of large-sized DDI, the recent shortage of TCON (timing controllers) has also adversely affected the shipment volume of large-sized panels, especially for high-end TCON models. The shortage of TCON can primarily be attributed to the fact that high-end TCON is mainly manufactured in 12-inch fabs, where various chips compete over limited wafer capacities. In addition, backend logic IC packaging and testing capacities are similarly in short supply, thereby adding further risk to the supply of TCON. In particular, manufacturing high-end TCON requires longer wire bonding time compared with mainstream TCON, meaning the current shortage of wire bonding capacity will lead to a widening shortage of high-end TCON. While the expanding capacity of packaging and testing services for logic chips is yet to catch up to the surging demand for various end products, the shortage of high-end TCON will unlikely be alleviated in the short run.

Prices of large-sized DDI will undergo an increase once again in 3Q21 due to persistently tight supply

TrendForce’s investigations indicate that, as 8-inch foundry capacities fall short of market demand, production capacities allocated to large-sized DDI have accordingly been crowded out by other chips. Foundry quotes are also expected to undergo an increase once again in 3Q21. Hence, IC suppliers will accordingly raise their large-sized DDI quotes for clients in the panel manufacturing industry as well. It should be pointed out that the demand for IT products is expected to slow down in response to increased vaccinations in Europe and the US, where governments have been gradually easing lockdown measures and border restrictions. Therefore, demand for panels, which has remained in an upward trajectory since last year, will likely experience a gradual downward correction in 4Q21, thus narrowing the gap between supply and demand of large-sized DDI. However, IC suppliers will not be able to address the tight supply of backend packaging and testing capacity in the short run, so panel suppliers will still need to contend with a shortage of TCON going forward.

On the whole, IC suppliers are unlikely to obtain sufficient 8-inch foundry capacities for manufacturing large-sized DDI, since 8-inch fabs will continue to operate at maximum capacity utilization rates for the next year. IC suppliers must therefore flexibly adjust their large-sized DDI procurement in accordance with cyclical downturns of foundry demand. In other words, the supply and demand situation of large-sized DDI and TCON will remain key to the supply and demand of panels in 2022.

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

Owing to the stay-at-home economy brought about by the onset of the COVID-19 pandemic, demand for IT products has been sky-high since 2Q20. However, monitor panel shipment for 1Q21 declined by 8.6% QoQ to 39.9 million units due to the shortage of components such as ICs in the upstream supply chain, as well as SDC’s (Samsung Display Co.) decision to shutter its monitor panel manufacturing operations, according to TrendForce’s latest investigations.

Regarding the two aforementioned factors constraining the shipment performances of monitor panel suppliers, TrendForce indicates that SDC will exit the monitor LCD panel manufacturing business after it reaches its shipment target of 1.2 million panels in 1H21. This figure represents a staggering 93.8% decline compared to the 19.3 million units of LCD panels that SDC shipped throughout last year. Aside from SDC’s decision, the other detractor of monitor panel shipment in 1Q21 was the tight supply of semiconductor production capacity, which resulted in a shortage of such components as ICs and TCON (timing controllers) in the upstream panel supply chain. Panel suppliers were hence constrained in their ability to manufacture panels, thereby leading to a shortage of monitor panels. In addition, since TV and notebook (laptop) panels have higher profit margins compared to monitor panels, panel suppliers generally allocate less of their production capacities for manufacturing monitor panels relative to the other products.

Monitor panel shipment for 2021 is still likely to experience a YoY growth as material shortage becomes alleviated going forward

Nonetheless, as demand for TV and notebook computers gradually slows, and certain semiconductor foundries are expected to expand their production capacities in 2H21, TrendForce believes that panel suppliers will likely in turn allocate more production capacities to clients in the monitor segment in 4Q21. More specifically, the current shortage of components in the upstream supply chain, which has been exerting significant downward pressure on monitor panel shipment, will be gradually alleviated in 2H21. On the demand side, the persistent stay-at-home economy will continue to generate demand for IT products. Monitor brands will therefore ramp up procurement activities for components such as panels in order to maintain a healthy inventory level. In light of influences on the supply side and demand side, TrendForce expects monitor panel shipment for 2021 to reach 169 million units, a 4.2% YoY growth.

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