Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
© begemot 30 dreamstime.com
Analysis |

Driver IC pricing continues fall with 8~10% drop in 3Q22

With supply and demand imbalanced and inventory high, the driver IC price drop is expected to expand to 8~10% in 3Q22, and prices falling all the way until the end of the year cannot be ruled out.

According to TrendForce research, weak terminal demand debuting at the start of this year has led to a steady uptick in inventory pressure. In order to effectively control inventory, IC stocking momentum has trended conservative. Demand also reversed quickly for peripheral ICs that were in short supply in 2021 such as driver ICs, Tcons, and PMICs for panels, causing panel makers' demands on panel driver IC pricing to drop even more in 3Q22.

TrendForce further stated, in order to consolidate supply-side momentum, Chinese panel driver IC vendors are more willing to meet the requirements of panel manufacturers, with price concessions reaching 10~15%. Since it will be difficult for demand to bounce back in the short-term, a sustained decline in panel driver IC pricing cannot be ruled out and it is very likely that prices will return to the beginning of their run in 2019 faster than expected.

Despite sluggish demand in the terminal market and increasing inventory among panel makers and panel driver ICs, for foundries with their diversified product portfolios, even when demand for panel driver ICs had previously been revised downward in the short-term, foundries still adjusted their product mixes accordingly, utilized vacated production capacity in multiple ways, and effectively allocated and maintained utilization rate.

Driven by a shortage of chips in the past two years, foundry pricing has continued to rise in the last few quarters and has remained at a high level thus far. However, driving IC manufacturers are now facing requests from downstream customers to reduce prices. Pincered by upstream price hikes, these companies have been forced to temper wafer input planning. Even the content of LTA (Long term agreement) supply contracts signed with foundries may need to be renegotiated. When panel driver IC wafer input is greatly reduced and the adjustment of other product mixes cannot bridge the production capacity gap, the overall utilization rate of fabs is likely to see disruption in 2H22.

In summary, TrendForce believes that for fabs, panel driver ICs are less profitable than other applications but they are one of the most efficient products used by fabs to round out capacity. After driver ICs encounter a sharp drop in pricing and wafer input plans are diminished in 3Q22, it is subsequently necessary to observe whether foundry pricing remain the same as in 2Q22, or be moderately reduced to maintain a high utilization rate.


Ad
Ad
Load more news
March 28 2024 10:16 am V22.4.20-1
Ad
Ad