Taiwan LCD driver IC designers are aggressively diversifying their product lines to counter the declining presence of domestic TFT LCD panel makers in the global market, and will benefit from the diversification efforts over the medium to long term despite suffering short-term throes in the transformation process, according to industry sources.
The sources said that the LCD driver IC sector is closely associated with both the upstream silicon wafer supply and the geographic proximity of downstream suppliers of TFT LCD panels. As Taiwan LCD panel makers are reluctant to spend heavily in developing next-generation OLED panels, local LCD driver IC designers have seen their competitive advantages significantly crippled amid the growing application trend of OLED panels replacing LCD panels.
This has forced Taiwan LCD driver IC suppliers including Novatek Microelectronics, Himax Technologies, FocalTech Systems, Ilitek, Raydium Semiconductor, Sitronix Technology, Realteck Semiconductor and UltraChip to step up developing new niche products. In the short term, most of them are likely to see their revenue performances and rankings among Taiwan's top-20 IC design houses undermined, the sources indicated.
Novatek sees sharp growth in TDDI shipments
But some of them will see their transformation efforts gradually pay off in 2018. Novatek, for instance, expects its shipments of TDDI (touch with display driver integration) ICs to sustain a significant growth momentum in the first quarter after seeing its shipment volume hit 10 million pieces in the fourth quarter of 2017. The company will even challenge a monthly shipment of over 10 million TDDI chips in 2018, exceeding its monthly shipment of driver ICs for small-size LCD panels.
In addition, Novatek expects to start volume shipments of OLED Full HD driver ICs in the second half of 2018, mainly to OLED panel makers in South Korea and China. Also, the company's share of the TV chipset market has been on the rise.
Himax is expected to see revenues from its three major product lines - large-size and medium-size LCD driver ICs and non-driver ICs - to fall sequentially in the first quarter of 2018 due to seasonality. But the shipments of its latest TDDI chips and WLO (wafer level optics) are expected to rise sharply in the second half of the year. This, coupled with its leading position in the supply of 3D sensor chips, will help the firm regain growth momentum for its revenues and earnings, according to industry sources.
Among other designers, FocalTech is also moving to tap TDDI business opportunities, Sitronix eyes the great development potential of G-sensor chip solutions, and UltraChip focuses on electronic tags and PMOLED chips.
Article translated by Willis Ke
