Seoul, South Korea – Pricing for capacitive touch controller ICs is expected to fall due to growing competition from Chinese-Taiwanese suppliers, but this should not impact the market’s positive growth trend, according to IHS Technology (NYSE: IHS). The capacitive touch controller IC market is forecast to reach about $2.8 billion in 2017, an increase of nearly 50 percent from $1.9 billion in 2013, according to the market research firm.
“The touch controller IC price is expected to drop as competition gets fierce in the market, but the capacitive touch controller IC market is likely to maintain its positive growth trend for now,” said Seung-kyu Richard Son, senior analyst at IHS Technology, in a statement. “Touch solutions that can stimulate consumers’ emotions should emerge steadily in order for the market to continue to grow.”
As more touch functions are integrated into a variety of products, the controller IC market used in capacitive touch panels is forecast to grow at a compound annual growth rate (CAGR) of 10.6 percent from 2013 to 2017, according to the IHS report. Currently, capacitive touch is the mainstream technology for the touch panel market, and continues to advance in area such as structures, materials and processes, said IHS.
The report finds the key growth drivers for capacitive touch panels have been smartphones and tablet PCs, although touch panels started to expand into other applications including notebook PCs and monitors at the end of 2012.
The key suppliers of capacitive touch controller ICs, up until 2011, were U.S. companies including Atmel, Synaptics, Cypress and Broadcom. As demand grew for smartphones and tablet PCs, Asian companies, including Melfas from South Korea, and FocalTech, Goodix and Mstar from China and Taiwan, entered the market with enhanced skills and price competitiveness, according to the report.
Chinese-Taiwanese touch controller IC companies have been growing rapidly thanks to their low pricing and better relationships with local smartphone and tablet PC makers, according to the report. In addition, the technology gap between Western and Chinese-Taiwanese suppliers is closing as “latecomers continue their investments in mergers and acquisitions and R&D.”
“The growth in Chinese-Taiwanese companies has resulted in a fall in supply prices for touch controller ICs, which is having a positive impact on manufacturers,” Son stated. “However, an excessive drop in prices can lead to lower profits for some companies and, in the end, will curb new investments.”