Displays of all kinds could soon become scarce and expensive. However, this is not due to a lack of high-end components. What is missing is digital dozen goods.
The corona crisis is also a supply crisis: What started with toilet paper quickly spread and has long since reached the high-tech industry. Current game consoles are almost exclusively available at exorbitant prices on eBay, while the auto industry is now even having to shut down entire factories just because certain components are missing. Bottlenecks are also spoken of when it comes to monitors, televisions, and smartphones.
We are talking about display drivers, called Display Driver Integrated Circuits (DDICs), which should not be confused with device drivers that are set up with the installation software. Rather, they are semiconductors that can be found in every device that has a display.
In addition to monitors, this also includes televisions, smartphones, and smartwatches, as well as tablets and all kinds of technical and medical devices. But many cars nowadays can no longer do without a display, which is why the current supply crisis at the DDICs has already reached economically relevant dimensions.
A distinction is made between DDICs, among other things, according to size, end product, and technology. Large DDICs can be found in PC monitors and TVs, for example, and Small & Medium DDICs in small and medium-sized devices such as watches, smartphones, tablets, and notebooks.
In most cases, these are simple LED DDICs, but solutions with Touch and Display Driver Integration (TDDI), with which the input function is included, are increasingly gaining acceptance for products with touch screens. This saves additional components and production steps, and TDDI's response time should be shorter.
In addition to the still predominant LCD screen drivers with LED backlighting, solutions for the advanced AMOLED screens are playing an increasingly important role. These do not require a separate backlight, as the Active Matrix Organic Light-Emitting Diodes generate their own light.
The result is improved image quality, and AMOLED-based displays can also be manufactured using flexible displays. However, this technology is not yet fully developed, which is why the tried and tested inorganic LED technology is often still used.
The Industry of The Nameless
In a few years, even a double-digit billion turnover could be achieved. Even so, hardly anyone is familiar with the names of industry leaders with double-digit market shares such as Novatek, Himax (PDF) (both Taiwan), or LX Semicon (South Korea).
Samsung Display, a subcontractor of Samsung and the number 2 behind Novatek, is an exception, but this group owes its popularity to completely different products. However, the current delivery bottlenecks also have something to do with Samsung, as we will see later.
In addition, there are a good dozen medium-sized suppliers with a single-digit market share, followed by numerous less important manufacturers.
But despite their ubiquity, the manufacturers of display drivers (PDF) posted only modest profits or even made losses until shortly before the corona crisis. At that time, sales stalled due to low demand, so that stocks filled up and a fierce price war broke out.
The margins sometimes fell to less than 20 percent, which is extremely little in the semiconductor industry, where doubling and more is the rule and certainly necessary in order to earn the high development costs. The stock exchange prices of various providers fell accordingly and some even focused on other products.
At the end of 2019, US provider Synaptics even decided to sell its mobile TDDI business in Asia to a Chinese investment company in order to focus on AMOLED and other, more profitable areas. Competitors like Himax sought their salvation in diversification. Investments were made in sensing technology, microdisplays, and AI in order to reduce the one-sided dependency on display drivers.