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Share of In-Cell Solutions in Smartphone Display Market to Reach 29.6% in 2017 as TDDI Chips Becomes Increasingly Available, Says TrendForce

29 December 2016 Semiconductors / Display Boyce Fan

The latest research on touch display solutions by WitsView, a division of TrendForce, finds that the share of In-Cell products in the global smartphone display market will expand to 29.6% by the end of 2017. The recent rapid adoption of In-Cell solutions among panel makers is due to the increase in the supply of IC components related to Touch with Display Driver Integration (TDDI).

WitsView also forecasts that On-Cell solutions will benefit from the strong demand for AMOLED next year, and their share in the smartphone display market worldwide will grow to 26%. Conversely, the market share figure of the traditional Out-Cell solutions will shrink to 42.8% in 2017 due to the competition from the other two touch display technologies.

“Panel makers highly favor In-Cell products because having touch sensors integrated inside the cell of the LCD panel significantly increases the panel’s value,” said Boyce Fan, senior research manager of WitsView. “In-Cell products are complete display solutions for device makers and help reduce the complexity of the smartphone supply chain. Moreover, In-Cell with TDDI can save costs by making materials such as flexible printed circuit (FPC) substrates redundant. Getting rid of extra materials also allows for a more compact design.”

Fan added that while prices of TDDI chips are still quite high, the number of suppliers is increasing and they will help make these IC components less expensive. Synaptics and FocalTech were the first to develop TDDI chips, and since then many Taiwanese IC suppliers have also entered this market. With additional suppliers, prices of TDDI chips are expected to fall more rapidly in 2017, thereby narrowing the cost gap between In-Cell and Out-Cell as well as stimulating the general demand for In-Cell solutions. WitsView estimates that the share of In-Cell plus TDDI solutions in the smartphone display market will double from 6% in 2016 to 12% in 2017.

In-Cell appeared to be on its way to become the standard specification for high-end smartphone display after it was featured in Apple’s iPhone 5 series. However, only few of Apple’s competitors in the smartphone market have actually used In-Cell solutions for the displays of their high-end models. Until recently, the penetration of this type of touch display was limited because the development of TDDI chips has been slower than anticipated.

The market visibility of In-Cell solutions has finally risen significantly in 2016 as major IC companies have started mass production of their TDDI chip products. Panel makers this year have also added products featuring In-Cell plus TDDI solution into their portfolios as the market supply of the related IC components increases.

“Some of the demand for In-Cell may disappear when Apple uses AMOLED for its devices in 2017,” Fan noted. “Nonetheless, the penetration rate of In-Cell in the smartphone display market will continue to increase on account of panel makers launching more products based on the technology.”

Looking at other touch display solutions, WitsView expects limited growth for the production capacity of On-Cell TFT-LCD panels in the coming year due to panel makers allocating more resources to the development of In-Cell products. On the other hand, the high AMOLED panel demand next year means that panel makers will increase the share of On-Cell solutions in their product mixes. The penetration rate of On-Cell solutions in the smartphone display market therefore will also keep growing in 2017.

Fan further pointed out that panel makers will increase efforts to promote integrated touch display solutions such as On-Cell and In-Cell as they gradually expand their production capacity for AMOLED and LTPS LCD panels. Conversely, providers of Out-Cell solutions may have to concentrate on developing the mid- and low-end segments of the smartphone display market or adopt a more aggressive pricing strategy in order to survive.

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