Taiwan DDI makers facing demand uncertainty in 2Q22

Jay Liu, Taipei; Willis Ke, DIGITIMES Asia 0


Taiwan-based display driver IC suppliers, most of whom have reported brisk sales results for the first quarter of 2022, are bracing for a challenging second quarter amid demand uncertainty, according to industry sources.

Top DDI vendor Novatek Microelectronics saw its first-quarter revenues grow 38.5% on year to NT$36.51 billion (US$1.253 billion), compared to Raydium Semiconductor's NT$7.7 billion (up 37.8%), Fitipower Integrated Technology's NT$6.0 billion (up 48.9%), Sitronix Technology's NT$5.6 billion (up 38.4%) and FocalTech Systems' NT$3.9 billion (down 10.5%).

Against revenue gains of nearly 40 to 50% by its peers, FocalTech's first-quarter sales fall mainly resulted from its shipments mostly going to the handset segment, where demand momentum has been weak, the sources said. They added the company might have suffered order cuts by handset clients.

DDI demand for TV and Chromebook applications has trended downward since the fourth quarter of 2021, but DDI suppliers have seen their shipments remain stable for commercial notebooks, tablets and wearable devices, the sources continued.

Leading vendor Novatek and some other peers are also actively proceeding with production of OLED DDIs for high-end handsets though smartphone market is still rather lackluster.

Automotive DDI is emerging as a crucial chip segment for Novatek, Himax Technologies, Raydium and Sitronix, and they are all devoted to volume production of car-use DDI and TDDI chips in 2022 to meet robust demand by allocating more foundry capacity for the segment, the sources indicated.

The sources also noted that growing market uncertainties, such as the war impacts, worsening inflation, lockdowns in China and resultant logistics and supply chain disruptions, are further undermining terminal consumer demand, driving clients to reduce shipment pull-in momentum in the second quarter.

Furthermore, DDI makers are under increasing pressure to lower their quotes for both handset DDIs and large-size TV DDIs in the second quarter, due to continuous price falls in display panels apart from sluggish market sentiments, the sources added.