Faced with price pressure, DDI Company in Taiwan, China, China considers foundry in Chinese Mainland

Source: Jiweiwang

    After the demand recovery in 2023, Taiwan, China display driver chip (DDI) suppliers are facing price competition from their counterparts in Chinese Mainland. The industry is cautious about the year 2024, and ongoing market research and panel supply chain analysis show that the decline in product prices is gradually slowing down, but overall pressure still exists. Therefore, Taiwan, China‘s DDI suppliers may choose Chinese Mainland‘s wafer foundries under cost pressure.

    Thanks to the driving force of consumer electronics products such as smartphones, the prices of small-sized panels are currently relatively healthy, while the prices of large and medium-sized panels show no signs of rebounding. Television and other products saw a rebound in demand in the first half of 2023, but are still at a low point in demand and prices, leading to significant price reduction pressure on customers.

    In the automotive industry, as the industry enters the traditional off-season, the demand for small and medium-sized panels has once again declined. Although most DDI suppliers believe that the price reduction pressure on automotive panels is relatively small, it is still uncertain what strategy customers will adopt in 2024.

    The industry expects a significant rebound in demand for large and medium-sized panels in the television, IT products, and automotive sectors in 2024. However, despite the opportunities brought by the Olympics, artificial intelligence (AI), and the popularization of electric vehicles, the growth in demand is not expected to alleviate price pressures in 2024.

    For DDI chip manufacturers in Taiwan, China, on the one hand, despite increased demand, panel prices may not rebound. On the other hand, panel manufacturers in Chinese Mainland are stepping up to cultivate local suppliers, bringing more challenges to DDI manufacturers in Taiwan, China. In order to mitigate the impact of price cuts, Taiwan, China suppliers hope to strengthen their product portfolio through high-end products. At present, compared with their counterparts in Chinese Mainland, they still maintain a leading edge for about three years, which enables them to maintain a high market share in high specification products that are not too sensitive to price fluctuations.

    The industry has different views on seeking foundry outsourcing in Chinese Mainland. Some people believe that it is essential to improve cost competitiveness, while others say that technology and yield are essential and should be comprehensively evaluated from the perspective of overall strategy.