Industry insiders predict Automotive TDDI chip will drive growth this year

April 28, 2023

Last year, the consumer electronics market was affected by several factors, including economic downturn and international trade frictions, resulting in a slowdown. It caused the display driver IC segment focuses on consumer electronic applications to shift from high demand to low demand.

The market situation has led peer companies to engage in price wars, which is putting pressure on related chip companies.

The market situation has changed in the first quarter of this year. There has been a surge in short lead-time orders for TV, high-end laptops, and monitors, which has driven up prices for some driver ICs. Display driver IC manufacturers, such as Novatek and Himax, have received urgent orders for display driver ICs from their customers.

Market research agency TrendForce said that DDIs (display driver ICs) 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.

Although the agency are optimistic about the market conditions in the second quarter, the demand trend for core applications of driver ICs, such as smartphones, other mobile devices, and consumer electronics, remains uncertain due to the persistent impact of inflation and the absence of a granted reversal in the global economic downturn cycle. Given this situation, there is concern that it may be less able to increase the demand for relevant display driver ICs.

In this situation, industry companies believe that the momentum to maintain steady and robust enterprise growth this year could be driven by two types of chips: AMOLED IC and TDDI (Touch and Display Driver Integration) for automotive displays.

The demand for AMOLED driver ICs primarily arises from the adjustment of industry product structures. Consumer electronics manufacturers constantly update their technologies and introduce new products to appeal to consumers. This shift in product layout focus from LCD to AMOLED has fueled the demand growth for AMOLED ICs.

Furthermore, the proliferation of design concepts like "full-screen" and "flexible screen" will enhance the penetration rate of AMOLED panels in the smartphone market, making AMOLED display driver ICs a promising growth area.

Considering that the consumer electronics market, including smartphones, has not shown a significant improvement, the IC company has shifted its focus to increasing investment in the products out of consumer electronics field such as aotomotive display driver ICs.

When balancing cost and design considerations, TDDI (Touch and Display Driver Integration) chips with higher integration levels are  preferential over DDI. TDDI is an integrated product of touch and display chips, which is one of the mainstream technology development directions currently.

Companies like Novatek , HIMX, and Focaltech have heavily invested in this field. Wang Shouren, CEO of Novatek, expressed his optimism about the growth momentum of products, such as automotive TDDI, this year. Additionally, Chipone  stated at the end of March that it is targeting the market demand for automotive smart cockpits and has completed the layout and project pre-research for automotive TDDI chips.

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