Rising Foundry and OSAT Costs Prompt DDIC Suppliers to Consider Price Increases, Says TrendForce

Rising semiconductor foundry and outsourced semiconductor assembly and test (OSAT) costs since 2025, along with continued increases in precious metal prices, are placing growing cost pressure on display driver IC (DDIC) suppliers, according to the latest research from TrendForce. In response, some vendors have recently begun discussions with panel makers to evaluate the possibility of adjusting DDIC pricing.

Breaking down cost structures reveals that foundry services account for roughly 60–70% of total DDIC costs, while backend packaging and testing typically represent around 20%. 

Recent rises in raw materials, energy, and labor costs have led to higher prices in the foundry industry. Specifically, 8-inch wafer capacity continues to be limited due to insufficient long-term expansion and competition from power-related devices like PMICs and power discretes, which have reduced supply. Consequently, the costs for high-voltage process nodes used in DDIC manufacturing have also increased.

Capacity dynamics for 12-inch wafers are also shifting. As several Taiwanese foundries reduce high-voltage process capacity, more customers are shifting orders to Nexchip, which is already a major foundry partner for DDIC production. This has supported Nexchip’s high-capacity utilization and contributed to an upward pricing trend for related mature-node processes. 

TrendForce notes that tight capacity in 8-inch fabs and certain DDIC-related mature 12-inch nodes is driving wafer costs higher across the board, making it increasingly difficult for DDIC suppliers to absorb the increases internally and raising the likelihood that cost pressures will be passed downstream.

Product type, application market, and customer mix to determine price adjustments

DDIC products must undergo several steps during backend processing, including bumping, packaging, and testing. Recently, tight packaging capacity, higher material costs, and rising labor expenses have pushed OSAT providers to increase service pricing, particularly for Chip-on-Film (COF) and Chip-on-Glass (COG) packaging technologies.

The cost of materials for gold bumping has continued to rise as global gold prices have trended upward since 2024. While some suppliers have gradually introduced alternative solutions to reduce reliance on gold, these measures are unlikely to fully offset the impact of rising gold prices in the near term.

TrendForce indicates that some DDIC suppliers are currently assessing potential price adjustments to reflect rising upstream costs. If foundry and OSAT costs rise, the probability of DDIC price hikes will increase, though the magnitude of adjustments will vary by product type, application segment, and customer structure.

DDICs are widely used in TVs, monitors, notebooks, and smartphones, meaning cost increases could gradually pass through to panel makers and downstream brands. In the future, pricing trends for DDIC will largely depend on upstream cost dynamics, supply-demand conditions in manufacturing capacity, and demand in end markets—all of which remain key indicators to watch.