News Article
Regional
Display driver chip market heads to mature stage
Despite the rapid expansion of the global FPD business, the market for display driver ICs used in these screens is expected to undergo a deceleration in revenue growth during the coming years, according to iSuppli Corp.
Flat panel displays have become ubiquitous, found in myriad products from the small control panel on your automotive dashboard display, to the 7 inch Digital Photo Frame (DPF) you received as a birthday present, to the 52 inch Liquid Crystal Display Television (LCD TV) your neighbour has hanging on his game room wall. Thanks to the explosion of LCD and plasma television sales, the display driver Integrated Circuit (IC) market has grown rapidly over the past several years as more consumers and businesses have sought to replace their old CRT based displays with newer flat panel sets.
However, while the panels continue making steady progress in expanding the overall size of the display market and increasing their market share, the display driver IC market story is one of rapid change in the face of pricing pressures and advances in panel technology. Display driver ICs are the semiconductors that provide the voltage and/or current to the rows and columns of flat panel displays, including for LCDs, plasma and Organic Light Emitting Diode (OLED) screens.
iSuppli estimates that the global display driver market grew by 26.2 percent to reach 6.9 billion units in 2007, up from 5.5 billion units in 2006. Such growth was chiefly the result of two market areas: LCD TV and notebook PC displays, both of which grew their end application units dramatically in the past year. Another major factor was the transition away from passive STN type LCD displays and to active matrix TFT LCD displays in many mobile and handheld products, such as mobile handsets and GPS navigation units. Such displays require larger numbers of display drivers.
But while overall unit growth was strong, global revenue was up only 10.2 percent to reach $8.8 billion in 2007, up from $7.99 billion in 2006. Revenue growth was limited by the continued downward Average Selling Prices (ASPs) for the driver ICs caused by fierce competition among display driver companies and by ever decreasing panel prices, factors that exerted pricing pressure on all suppliers to the panel manufacturers.
“A troublesome development as well for display driver IC market is the fact that the panel pricing pressure, and thus driver IC pricing pressure, is not expected to abate anytime soon, as even more capacity comes on line during the next few years,” said Randy Lawson, senior analyst for digital TV and display electronics for iSuppli.
“This use of multichannel devices reduces the number of discrete drivers required per panel, putting a serious crimp on the growth prospects for large panel drivers. Coupling the declining driver IC ASP with the increasing usage of multichannel drivers in televisions, notebooks and monitors, one can see that the overall growth rate for display driver ICs is slowing dramatically.”
Unit shipment growth for display drivers will slow to 15.1 percent in 2008, down from 26.2 percent in 2007. Annual growth will average about 11 percent from 2009 to 2011.
So where is the silver lining for display driver ICs amid this ominous storm cloud of LCD price declines and multichannel adoption by panel manufacturers? New applications and products are continuing to add growth in end markets, with devices like DPFs, multi touch panels and 3D displays, all of which should help continue to expand the display market, iSuppli believes.
Advancements in OLED displays eventually should pave the way for larger, and thus higher volumes of OLED-TV displays, which could dramatically expand the market for OLED drivers.
Flat panel displays have become ubiquitous, found in myriad products from the small control panel on your automotive dashboard display, to the 7 inch Digital Photo Frame (DPF) you received as a birthday present, to the 52 inch Liquid Crystal Display Television (LCD TV) your neighbour has hanging on his game room wall. Thanks to the explosion of LCD and plasma television sales, the display driver Integrated Circuit (IC) market has grown rapidly over the past several years as more consumers and businesses have sought to replace their old CRT based displays with newer flat panel sets.
However, while the panels continue making steady progress in expanding the overall size of the display market and increasing their market share, the display driver IC market story is one of rapid change in the face of pricing pressures and advances in panel technology. Display driver ICs are the semiconductors that provide the voltage and/or current to the rows and columns of flat panel displays, including for LCDs, plasma and Organic Light Emitting Diode (OLED) screens.
iSuppli estimates that the global display driver market grew by 26.2 percent to reach 6.9 billion units in 2007, up from 5.5 billion units in 2006. Such growth was chiefly the result of two market areas: LCD TV and notebook PC displays, both of which grew their end application units dramatically in the past year. Another major factor was the transition away from passive STN type LCD displays and to active matrix TFT LCD displays in many mobile and handheld products, such as mobile handsets and GPS navigation units. Such displays require larger numbers of display drivers.
But while overall unit growth was strong, global revenue was up only 10.2 percent to reach $8.8 billion in 2007, up from $7.99 billion in 2006. Revenue growth was limited by the continued downward Average Selling Prices (ASPs) for the driver ICs caused by fierce competition among display driver companies and by ever decreasing panel prices, factors that exerted pricing pressure on all suppliers to the panel manufacturers.
“A troublesome development as well for display driver IC market is the fact that the panel pricing pressure, and thus driver IC pricing pressure, is not expected to abate anytime soon, as even more capacity comes on line during the next few years,” said Randy Lawson, senior analyst for digital TV and display electronics for iSuppli.
“This use of multichannel devices reduces the number of discrete drivers required per panel, putting a serious crimp on the growth prospects for large panel drivers. Coupling the declining driver IC ASP with the increasing usage of multichannel drivers in televisions, notebooks and monitors, one can see that the overall growth rate for display driver ICs is slowing dramatically.”
Unit shipment growth for display drivers will slow to 15.1 percent in 2008, down from 26.2 percent in 2007. Annual growth will average about 11 percent from 2009 to 2011.
So where is the silver lining for display driver ICs amid this ominous storm cloud of LCD price declines and multichannel adoption by panel manufacturers? New applications and products are continuing to add growth in end markets, with devices like DPFs, multi touch panels and 3D displays, all of which should help continue to expand the display market, iSuppli believes.
Advancements in OLED displays eventually should pave the way for larger, and thus higher volumes of OLED-TV displays, which could dramatically expand the market for OLED drivers.
