Outlook looks bleak for display driver ICs

El Segundo, Calif. — Although the global display driver IC (DDIC) market is projected to reach $6.5 million in 2010, up 14 percent from the 2009 low of $5.7 billion, the long-term outlook looks bleak in the face of continued technological advances, reported iSuppli, now part of IHS Inc.

After two successive years of decline, DDIC shipments will reach 9.8 billion units by the end of the year, up almost 18 percent from 8.2 billion units last year, according to iSuppli

Despite this year’s comeback, the market is expected to decline over the next several years. iSuppli predicts that DDIC revenue will fall to $4.7 billion by 2014, down nearly one-third from the 2010 level, translating into a five-year compound annual growth rate (CAGR) of negative 3.8 percent.

“As the semiconductors that provide voltage or current drive signaling to a pixel array for liquid-crystal display (LCD), organic light-emitting diode (OLED) or plasma technology, DDICs are used in a wide range of products that feature screens or panels,” said Randy Lawson, manager and principal analyst for display and consumer electronics at iSuppli, in a statement.


iSuppli’s report, “Inventory Impact Implies Implosion: LCD Driver IC Market Expected to Decline,” reveals that the biggest application for DDICs is in large-panel applications like LCD TVs, LCD monitors and notebook PCs. However, they also are used in small-sized and medium-sized panel applications such as smart phones, portable navigation devices, portable media players, eBook readers and media tablets, said Lawson.

Although there is growth in the LCD panel market, DDIC unit demand will be offset by the evolution of more cost-effective and power-efficient technologies in panels, according to iSuppli. These changes include the integration of more complex semiconductor functionality onto the LCD panel substrate, which eliminates the need for some external, discrete gate driver chips, and reduces the number of required column driver ICs per panel, said Lawson.

This trend is coupled with high inventories of LCD-TVs and notebook panels, which will further slow the market, said iSuppli. Economic concerns over 2010 holiday season orders, as well as fewer TV and monitor orders from the European Union early in the third quarter have driven manufacturers to cut production for large-LCD panels.

As a result, iSuppli expects to see driver IC unit shipments decline by as much as 8 percent during the next two quarters, with revenue by year-end sliding by 12 percent compared to the first half.