© yuriy-chaban / dreamstime.com
Business | December 07, 2011
Controller IC price decline critical for touch module makers
Controller IC price decline critical to touch module’s 4-5% cost decrease in 4Q11.
In the second half of 2011, the tablet market business has been slightly rocky. Aside from the dismal sales reported by most brand vendors in the third quarter, even No.1 leader Apple has lowered its projected sales for the fourth quarter. In light of the weaker-than-expected market sales, touch module makers have been especially keen in controlling costs.
Needless to say, a product’s cost structure has a strong impact on a company’s profitability and pricing strategy. For 4Q11, based on the surveys conducted by WitsView, a research division of TrendForce, the cost structure of the touch module component used in tablet PCs is projected to drop by 4~5%. In particular, the controller IC component is expected to experience the biggest price drop.
According to WitsView research director Eric Chiou, US-based IC controller makers recently released single chip solutions successfully to the market. In addition, the offered price quotes are considered very competitive. Specifically, the prices of these highly integrated chip products have been cut by more than 20%.
This has thus forced other players to drop prices as well in order to maintain competitiveness. Although there is a big range in the controller IC price drop, which essentially depends on the agreed terms of the particular business deal, in general, controller IC prices are forecasted to fall by 8~10% in 4Q11.
In addition to the controller IC, prices for touch sensor and cover glass components also continue to decline in 4Q11. As the bulk of the glass touch sensor orders are concentrated in the hands of TPK and Wintek, even with a lower utilization rate, a minimal monthly output must still be maintained by other makers. Moreover, with more players entering the market, the market is being filled with more excess supply, thus resulting in more intense price competition. In 4Q11, glass touch sensor prices are set to fall by 4~5%.
As for the cover glass component, it too is experiencing sharper price drops in 4Q11. One of the key reasons is that the chemically strengthened glass currently faces two challenges. The first is the inventory adjustments being conducted by clients have driven down market demand. The second is the rising market supply, as NEG and Schott have also joined the competition.
Therefore, despite Corning’s dominant position in this segment, the market changes have still forced it to cut prices to maintain its strategic lead. In addition, as the use of hole-punching and other complicated processing steps are no longer 100% mandatory during the manufacturing of the tablet PC cover glass, the overall yield rate is notably improving. Thus, amid the material price drop and simpler manufacturing processes, WitsView forecasts a 5~6% price drop for the cover glass segment in 4Q11.
Due to the continued yield rate improvements on lamination used in attaching sensor and cover glass, manufacturers are now trying to find cheaper adhesive materials for replacement to further cut costs. For 4Q11, the adhesion process costs will only drop by a mere 2~3%, a relatively smaller decline when compared to other touch module components.
WitsView believes that beginning next year, the focus in the touch module cost structure will shift toward a so-called “one glass” or “sensor-on-glass” solution. Production ramp-up via this approach is expected to begin in the first half of 2012. At the moment, the yield rate in the application of such technology on tablet PCs is still under 70%. The biggest obstacles come from the secondary strengthening and printing process.
Nevertheless, it is believed that the current technological hurdles will gradually be resolved. Through this approach, it should provide a 7~8% quarterly decline to the touch module cost-down in the near future.
ETS-Lindgren expands with new factory in China
ETS-Lindgren announced the opening of a new 37,700 square feet (3,500+ square...
Light & Sony to jointly develop multi-image sensor solutions
Light, a provider of multi-camera imaging, has entered into an agreement with Sony...
Shipco Circuits is changing how PCB embedded components are brought...
Ireland based EMS provider Shipco Circuits Ltd. www.ship.ie has brought a robust method...
Seoul Semi made distributor stop selling Everlight product in Japan
Seoul Semiconductor says that it has concluded a patent infringement lawsuit seeking an...
congatec signs sales partnership with Fortec
congatec has signed a sales partnership with Fortec. The goal is to expand the market...
TSMC details impact of fab 14B photoresist material incident
TSMC is updating its first quarter 2019 guidance following the completion of the assessment...
Altran awarded large, multi-year deal by global semiconductor player
Altran, which provides engineering and R&D services (ER&D), says that the company...
IFT initiates patent litigation against TI, VW, Ford and Cisco
Innovative Foundry Technologies (IFT) says that it has initiated patent litigation in China...
Pulse is now a part of the Yageo Corporation Group
Taiwanese electronic component manufacturing, Yageo Corporation, announced...
Lattice names new corporate VP of worldwide sales
Lattice Semiconductor has appoinded Mark Nelson as the company’s Corporate Vice...
Smith Names Sean Evans as Chief Financial Officer
Electronic components and semiconductor distributor, Smith, has appointed Sean...
Astronics completes sale of semiconductor system level test technology
Astronics Corporation, a provider of technologies for the global aerospace, defense, and...
Osram Licht AG confirms talks with Bain Capital and Carlyle Group
Osram Licht AG is confirming the market rumours that Bain Capital and Carlyle Group are...
CIVINTEC acquires the Cidron RFID reader range from Nexus
CIVINTEC, a supplier of RFID products in the global OEM and ODM segment, is acquiring the...
Fraunhofer Institute goes with Veeco's ion beam sputtering technology
Veeco Instruments has shipped its SPECTOR Ion Beam Sputtering (IBS) system and the...
EIB provides a total of €80 million to Zumtobel Group
The European Investment Bank (EIB) is providing the Austrian lighting company Zumtobel...
Mayflex expands operations operations with new HQ
IT communications equipment company, Mayflex, is expanding its UK operations and relocating...
Sensata breaks ground on new $27 million expansion
Sensor manufacturer, Sensata Technologis, has broken ground on a new production and...
WiTricity acquires Qualcomm Halo
Wireless power technology player, WiTricity, announces the acquisition of certain technology platform and IP assets from Qualcomm Incorporated and Qualcomm Technologies, which will bring over 1'500 patents and patent applications...
Most Read
Load more news