Fun With Data – IC Driver Sales
Driver ICs are an integral part of all displays and are the interface between signals generated by a computer, smartphone or other device and the display as they translate that data into a visual image. Display driver sales typically track closely to display unit volumes, but over the last year, display driver IC prices have increased rapidly as utilization rates at silicon foundries has been running at close to 100%. As these foundries allocate tight capacity to device types a number of segments in the CE space have seen shortages, including driver ICs.
We noticed that the Taiwan trade press had indicated that November, while down for Taiwan’s driver IC companies, wasn’t ‘as bad as expected’, so we dug into the data to see if this was just a headline or a real change. The commentary in the press was that TV set sales had been improving as TV panel prices declined, buffering display driver companies from declining sales, but we were suspect in that it takes time for both lower priced panel inventory to move through the supply chain, and for real TV set prices to see significant declines. IT device drivers, which include those used in monitors, notebooks, and tablets, are the segment that is likely going to be the most volatile, with panel producers having shifted production away from TV panels and toward IT panels, where prices have declined only recently. That said, we compared both TV and IT panel industry sales to a number of driver IC companies in Taiwan, who report sales on a monthly basis.
The chart shows the sales of Novatek (3034.TT), Raydium (3592.TT), Focaltech (3545.TT) and Fitipower (4961.TT) over the last 23 months against panel industry sales broken out into IT and TV segments. We have scaled the monthly results of the driver IC vendors and the panel sales so they can be compared, so there are no y axis amounts, but the disconnect between driver IC sales and panel industry sales is quite easy to see. As driver IC scarcity became an increasing issue late last year, the price of drivers ICs increased, boosting sales, while panel unit volumes remained relatively flat, constrained by component shortages and raising prices. All in, it is hard to look at driver IC sales and not expect at least some ‘normalization’ to closer tracking to panel volumes. As with panel producers, driver IC companies have been shifting capacity toward drivers for the IT segment, which puts more pressure on IT product sales going forward, an area that has seen demand weaken over the last few months. While not perfect pure plays in the IC driver space, Taiwan’s driver companies are a good indicator of the sensitivity the CE supply chain has to relatively small changes in demand and provide monthly rather than quarter sales.
We noticed that the Taiwan trade press had indicated that November, while down for Taiwan’s driver IC companies, wasn’t ‘as bad as expected’, so we dug into the data to see if this was just a headline or a real change. The commentary in the press was that TV set sales had been improving as TV panel prices declined, buffering display driver companies from declining sales, but we were suspect in that it takes time for both lower priced panel inventory to move through the supply chain, and for real TV set prices to see significant declines. IT device drivers, which include those used in monitors, notebooks, and tablets, are the segment that is likely going to be the most volatile, with panel producers having shifted production away from TV panels and toward IT panels, where prices have declined only recently. That said, we compared both TV and IT panel industry sales to a number of driver IC companies in Taiwan, who report sales on a monthly basis.
The chart shows the sales of Novatek (3034.TT), Raydium (3592.TT), Focaltech (3545.TT) and Fitipower (4961.TT) over the last 23 months against panel industry sales broken out into IT and TV segments. We have scaled the monthly results of the driver IC vendors and the panel sales so they can be compared, so there are no y axis amounts, but the disconnect between driver IC sales and panel industry sales is quite easy to see. As driver IC scarcity became an increasing issue late last year, the price of drivers ICs increased, boosting sales, while panel unit volumes remained relatively flat, constrained by component shortages and raising prices. All in, it is hard to look at driver IC sales and not expect at least some ‘normalization’ to closer tracking to panel volumes. As with panel producers, driver IC companies have been shifting capacity toward drivers for the IT segment, which puts more pressure on IT product sales going forward, an area that has seen demand weaken over the last few months. While not perfect pure plays in the IC driver space, Taiwan’s driver companies are a good indicator of the sensitivity the CE supply chain has to relatively small changes in demand and provide monthly rather than quarter sales.
Taiwan Driver IC Producer Sales vs. Panel Industry IT & TV Unit Volume - Source: SCMR LLC, OMDIA, Witsview, Company Data
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