IC packaging materials suppliers and distributors anticipate an increase in demand for HPC substrates in the second half of 2023, while demand for display driver ICs (DDI) will stabilize in the second quarter of the year, according to industry sources.
While it is still too early to predict when the displays industry will recover, sources from the backend packaging and testing sector have noted that DDI inventory -- one of the leading indicators of the displays industry -- has already shown improvements.
Demand for packaging materials such as tape COF will hit bottom in the first quarter of 2023, and the worst will gradually be over and become more stable in the second quarter, the sources said.
Sources from packaging materials suppliers said materials demand from wire bonding and DDI packaging segments will still be weak in the first half of 2023, but substrate demand will pick up in the second half of the year, thanks mainly to HPC and automotive chips.
Sources from distribution channels said many packaging and testing firms have been digesting inventory with their sales dropping and their orders for materials also slowing down.
But the sources said there have been some rush orders. Though the rush orders' contribution to sales at the packaging materials sector may not be significant, at least they are signs that there is still some momentum.
Tape COF maker JMC, which is a subsidiary of CWE, said the panel industry has already cleared some inventory after major corrections. Due to fewer working days, sales are expected to hit bottom in the first quarter but will begin to stabilize in the second quarter.
Sources from the testing supply chain said chip demand from consumer electronics, such as handsets and PCs will be weak in 2023, with memory ICs to see the worst fall. But server and HPC chip demand will not see major declines although there will be some corrections, the sources said.
Article translated by Rodney Chan
