Display driver IC (DDI) designers have begun to feel a pinch on supplies as increasing demand for 5G-enabled devices squeezes greater wafer capacity from foundries and sets the scene for a renewal of capacity constraints, TrendForce Corp (集邦科技) said yesterday.
The supply of TV DDIs could become tight again in the first half of next year, when demand from panel makers recovers from flush inventories and panel prices bounce back, TrendForce research director Boyce Fan (范博毓) said in a report.
Later this quarter, foundries might fully utilize their 8-inch and 12-inch fabs due to rapidly growing demand for fingerprint ICs, power management ICs and low-end CMOS image sensors used in phone cameras, Fan said.
As foundries usually allocate more capacity to produce higher-margin chips, the supply of DDIs might fall, Fan said.
United Microelectronics Corp (聯電) forecast that fab utilization would climb to about 90 percent at 8-inch fabs — higher than at 12-inch fabs — because of the launch of new products used in 5G smartphones, such as RF ICs and OLED driver ICs.
Last year, designers of touch display driver ICs (TDDIs), which are mostly used in smartphones, coped with the meager supply by opting for the more advanced 55-nanometer technology, rather than concentrating on 80-nanometer technology, TrendForce said.
Such a shift in capacity might happen again this year, causing a faster migration to 55-nanometer technology, it added.
Next year, smartphones with high-resolution OLED displays would use TDDIs made using 40-nanometer and 28-nanometer technologies, TrendForce said.
Last year’s shortage of wafer capacity dealt a blow to local DDI and TDDI designers, such as FocalTech Systems Co (敦泰電子).
FocalTech blamed last year’s poor financial performance and a slump in market share — as low as 18 percent from 50 percent at its peak — on the wafer supply shortage.
The capacity issue has been resolved and would not become a headache this quarter or next year, the company told investors last month.
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