Santa Clara, Calif. – The driver IC market is forecast to reach $6.8 billion in 2017, primarily driven by demand for higher resolution displays in smartphones and other applications, according to IHS Inc. (NYSE: IHS). These include smartphones with full high-definition (FHD) and 4K-resolution displays.
There are a couple of market dynamics occurring in the driver IC market. One trend in particular that buyers need to pay attention to is that most driver IC makers are fabless companies, which has contributed to long lead times of about three months from order to delivery, according to IHS.
Among the different display materials and components, the driver IC supply chain is unique, according to the IHS Display Driver IC Market Tracker. Most driver IC makers are “fabless” companies — like TSMC and UMC — that contract out their production, said IHS. “Due to increased competition in the market, prices and profits for driver ICs dropped dramatically after 2007, which is why foundry makers have de-prioritized driver IC production.”
“The lead time from order to delivery in the driver IC market is around three months,” said Tadashi Uno, senior analyst and researcher for IHS Technology, in a statement. “This timeframe is quite long, compared to other materials and components; however, driver IC order delivery and pricing are not affected by the usual supply-and-demand forces.”
Another trend noted by IHS, which impacts chip vendors and design, is that panel makers are trying to reduce the number of driver ICs in their displays. “To increase revenues panel makers are trying to reduce the number of driver ICs in their displays,” Uno stated. “One way is to use driver ICs with more pins. While in the past the most popular source driver had 720 pins in the past, the latest driver ICs have more than 1000 pins, which drives down the number of driver ICs needed for each display.”
Looking for ways to further increase revenues and profits has been an ongoing trend for panel makers. Earlier this year IHS reported that display makers were focused on finding ways to reduce production costs in order to garner more profits. These strategies included replacing low-temperature polysilicon substrates (LTPS) with oxide semiconductor substrates, or reducing costs through the use of multi-chip LED packages, RAM-less driver integrated circuits (ICs), composite optical sheets and other cost-effective component solutions.