Analyst: Display driver ICs “maturing” as FPD demand surges

June 2, 2008 – As global flat-panel displays become ubiquitous, sales of display driver ICs are about to decelerate due to pricing pressures and technology advancements, according to a report from iSuppli.

The explosion of LCD and plasma TVs (and replacements for CRT monitors), ranging from 7-in. digital photo frames to mammoth ≥50-in. wall-mounted TV screens, has pulled along the market for display driver ICs, which provide voltage and/or current to the rows and columns of displays. This market grew an estimated ~26% to 6.9B units in 2007, mainly due to LCD TVs and notebook PCs, whose end application units rose “dramatically” in a year, the firm notes. Another factor in driver IC growth was a transition away from passive, STN-type LCD displays to active-matrix TFT-LCD displays, e.g. for mobile handsets and GPS navigation units, which require more of the devices.

But despite the demand for product, sales only rose about 10% in 2007 to $8.8B, as “fierce competition” drove down prices, compounded by similar price reductions in the panels themselves that pressed against all suppliers in the chain, iSuppli explained. And those pressures are “not expected to abate anytime soon, as even more capacity comes on line during the next few years,” noted Randy Lawson, senior analyst for digital TV and display electronics for iSuppli, in a statement.

Moreover, the outlook for driver IC growth is being squeezed by increased use of multichannel drivers in TVs, notebooks, and monitors, which reduces the number of discrete drivers/panel, as well as a growing trend to integrate the drivers directly into the panels themselves, he writes. Unit shipments are seen slowing to 15.1% growth this year, nearly half what they were in 2007, and will average about 11% annually through 2011.

“Coupling the declining driver IC ASP with the increasing usage of multichannel drivers in televisions, notebooks and monitors, one can see that the overall growth rate for display driver ICs is slowing dramatically.”

If there’s a silver lining, it could be in new applications and products like DPFs, multitouch panels, and 3D displays, iSuppli suggests. Also, advancements in organic LED displays “eventually should pave the way for larger, and thus higher volumes of, OLED-TV displays, which could dramatically expand the market for OLED drivers.” In the meantime, display drivers are advancing to new types of interfaces being promoted by IC and panel manufacturers, the firm notes.

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