Panel makers have aggressively driven down the prices of display driver ICs (DDIs) over the past few quarters in response to slumping panel prices. Meanwhile, foundries have not made any significant price adjustments recently. Even when Nexchip lowered prices in 2022 to increase their capacity utilization rate, wafer prices remained relatively stable. TrendForce’s research has revealed that instead, many foundries have offered deals such as discounts or free wafers to effectively lower DDI prices without officially changing them, since demand is expected to recover in 2H23. As of 1Q23, the prices of large-sized DDIs have been resistant to falling as it’s too difficult for wafer prices to return to their pre-pandemic levels. The ASP of DDIs is expected to remain level throughout 2Q23 or dip slightly by 1–3%.
TrendForce further iterates that DDIs have faced a long period of strict control over ICs in order to manage inventory levels, which appear to be at a healthy level moving into 2Q23. It was rare to see DDI inventory peak for more half a year in 2022 since most products usually fall to a healthy level in about 8–10 weeks. As prices of large-sized DDIs fell significantly by the end of 2022, it’s predicted that panel demand in 2023 will increase QoQ — especially in the third quarter, which has traditionally been the peak season. An increase in demand for panels will in turn help drive up demand for DDIs.
Taking a look at DDI applications, it’s expected to see demand for panels increase QoQ. TV panel prices have rebounded since falling significantly and brands are raring to stock up just in time for China’s 618 Shopping Day and Amazon Prime Day. Notebook brands have been gradually replenishing panel inventory for their high-end laptops; gaming LCD monitor panel makers have also adjusted output to keep up with increased demand from Internet cafes reopening in China. TrendForce observed that DDI wafer input has increased. However, when compared to before the pandemic, all parties within the supply chain have grown more fearful of stockpiling ICs.
With that being said, it’s predicted that demand for DDIs will continue to rise QoQ while prices stay relatively the same. Demand is expected to peak as we move into the third quarter and since suppliers have become hesitant to stockpile, it may take 2–3 months to prep enough inventory. Therefore, TrendForce notes that the question of whether enough stock will be ready in time for the demand peak is still up in the air. If there is insufficient supply to meet the demand, or production capacity is not enough to fulfill that excess demand, then DDIs will once again have to cope with being in tight supply in the short term. TrendForce does not rule out the possibility that the effects of this could trickle through the entire panel supply chain.
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