Shortage in large-sized display driver IC (LDDI) is expected to continue to the third quarter of 2021, according to TrendForce.
In the upstream semiconductor supply chain, various foundries’ 8-inch wafer capacities have mostly been allocated to other chips with higher profit margins, in turn lowering the glut ratio of LDDI from 3.3% in 2019 to 1.7% in 2020, representing a tightening supply, the research firm said.
Glut ratio is expected to drop further to 1.1% in 2021. The ratio needs to be 5% or higher for a stable supply-demand structure.
Meanwhile, demand for LDDI is expected to increase 2.5% this year. In 2020, LDDI demand increased 2.3% to 5.827 billion units. The increase was propelled by work at home and remote work trends caused by the pandemic.
There has been very limited growth in 8-inch wafer capacities in recent years, whereas demand for CMOS image sensors (CIS) and power management ICs (PMIC) has been consistently soaring in comparison, the research firm said.
Since LDDIs are manufactured with the same process technology as the aforementioned chips but are less profitable, chips such as CIS and PMICs have crowded out LDDI manufacturing in foundries, it said.
According to TrendForce, LDDI prices rose by 20 to 30% quarter-on-quarter throughout the two quarters in second half of 2020 due to developments in both the upstream and downstream semiconductor supply chain: In the upstream, foundries increased quotes for LDDI manufacturing on two separate occasions. Conversely, in the downstream, OSAT capacities have been insufficient, and prices for gold used in IC gold bump connectors have been trending high as well.
