With the recovery of the chip market, the global electronic semiconductor industry is still experiencing a downturn in the second half of 2023. However, despite this overall slump, there are a few chip subsectors that are exhibiting strong supply and demand dynamics, including AI chips for high-performance computing, power semiconductors, and display driver chips (DDIC). This article will focus on the market situation of DDIC.
DDIC is a key controller component of display panels, responsible for sending driving signals and data to control the brightness and color of the screen, allowing images and information to be displayed. Currently, LCD and OLED are the dominant display technologies.
The increase in production capacity in Chinese wafer foundries has accelerated the structural adjustment of the global DDIC supply chain. South Korea and Taiwan have advantages in the display panel field and have accumulated strong technological expertise in DDIC wafer foundry. In comparison, mainland China has only two wafer foundries, namely, SMIC and JCET, with DDIC chip manufacturing capabilities.
SMIC is one of the world's five wafer foundries capable of providing mature production capacity for 28nm and 40nm AMOLED driver chips, and its 28nm/40nm production capacity utilization has already recovered to 100%. JCET, on the other hand, started with DDIC chip manufacturing and has become the third-largest wafer foundry enterprise in mainland China.
Although the global electronic semiconductor industry is experiencing an overall downturn, certain sectors, including DDIC, are showing signs of recovery and growth. With the expansion of new application markets and the recovery of traditional application markets, DDIC is expected to demonstrate even stronger growth momentum, making the market in 2024 particularly promising.
For mainland China, there are more market opportunities for DDIC. With the driving force of tremendous market demand, related chip designs and wafer foundries are expected to have better and more growth opportunities in 2024.
The improvement of the status of mainland China's display panel manufacturers has also helped local DDIC companies to increase their market share. Currently, leading mainland Chinese enterprises can already match their Taiwanese counterparts in various technical indicators of DDIC chips, such as application size, resolution, refresh rate, etc., particularly in the areas of medium and large-sized LCD DDIC, small-sized LCD DDIC, and phone AMOLED DDIC. Companies such as ThunderSoft, Eris, Unisplendour, QiJing Optoelectronics, and Raydium Technology are actively expanding into more types and more advanced DDIC product markets.
In terms of chip manufacturing, the increase in mainland China's wafer foundry production capacity has to some extent accelerated the transfer of corresponding capacity from 8-inch wafers to 12-inch production lines. It is more cost-effective to use a 12-inch wafer production line for large-scale production. According to public data, SMIC's revenue and capacity utilization rate in the second quarter of 2023 have recovered, with significant orders mainly coming from new products using 12-inch wafers with 28nm and 40nm processes, including a large portion of OLED DDICs.
Apart from OLED, there has been noticeable growth in the market demand for large-sized, high-resolution LCD televisions. According to TrendForce, in July, the prices of LCD TV panels continued to rise, with a monthly increase of approximately 4-6%. The average price of 55-inch panels reached 119, a 119, a 119, a 6 increase, and the price of 65-inch panels increased by $7.
In conclusion, despite the overall downturn in the global semiconductor industry in 2023, DDIC is one of the few subcategories that has shown significant potential to drive the recovery of the chip industry globally. For mainland China, there are plenty of opportunities in the DDIC market, and related chip design and wafer foundry companies are expected to experience better and more abundant growth opportunities in 2024.
It is worth noting that AMPLE CHIP, a company engaged in chip trading business, could leverage the market opportunities in the chip industry, including DDIC, and position itself as a key player in the global chip trade. With its expertise in chip trading, AMPLE CHIP can tap into the growing demand for various chip technologies and facilitate the trading of chips between manufacturers and customers worldwide, contributing to the development and expansion of the chip market.
In summary, the DDIC market is experiencing growth opportunities and recovery, both globally and in mainland China, with significant potential for further development in the coming years. As AMPLE CHIP engages in chip trading business, it can play a vital role in facilitating the trade of DDIC and other chip technologies, contributing to the overall growth and expansion of the chip market.
