Thanks to the increased adoption of AMOLED panels by major smartphone brands including Apple and Samsung, the penetration rate of AMOLED panels in the smartphone market is expected to reach 39.8% in 2021 and 45% in 2022, according to TrendForce’s latest investigations. As AMOLED panels see increased adoption, the consumption of AMOLED DDI will undergo a corresponding increase as well. However, not only are the process technologies used for AMOLED DDI manufacturing currently in short supply, but some foundries are also yet to finalize their schedules for expanding their AMOLED DDI production capacities. Given the lack of sufficient production capacity, the increase in AMOLED panel shipment may potentially be constrained next year.
Regarding process technologies, the physical dimension of AMOLED DDI chips is generally larger compared to other chips, meaning each wafer yields relatively fewer AMOLED DDI chips, and more wafer inputs are therefore needed for their production. The vast majority of AMOLED DDI is currently manufactured with the 40nm and 28nm medium-voltage (8V) process technologies. In particular, as 40nm capacity across the foundry industry is in tighter supply compared to 28nm capacity, and TSMC, Samsung, UMC, and GlobalFoundries are the only foundries capable of mass producing AMOLED DDI, an increasing number of new wafer starts for AMOLED DDI are being migrated to the 28nm node instead.
Regarding wafer supply, the foundry industry is currently unable to fulfill client demand for 12-inch wafers. Hence, 12-inch capacities allocated to AMOLED DDI production are relatively limited as well. At the moment, only TSMC, Samsung, and UMC are able to allocate relatively adequate wafer capacities, although their capacity expansion efforts are still falling short of growing market demand. In addition, while SMIC, HLMC, and Nexchip are developing their respective AMOLED DDI process technologies, they have yet to confirm any mass production schedules. TrendForce therefore expects that the additional AMOLED DDI capacities to be installed next year will remain scarce, in turn further limiting the potential growth of the AMOLED panel market.
AMOLED DDI suppliers must overcome the issues of limited production capacity and technological difficulties in R&D
Other than the issue of tight production capacities, the difficulty of AMOLED DDI development is further compounded by the fact that each panel manufacturer has its unique specifications of AMOLED panels. For instance, panel manufacturers differ in terms of their display image uniformity (including the calibration of on-screen picture quality via eliminating display clouding, poor color/brightness compensation, and sandy mura). Hence, in order to address the discrepancies among panels manufactured by different companies, IC suppliers must adopt different compensating solutions and account for different parameters. Panel manufacturers therefore are likelier to adopt DDI from IC suppliers whose solutions have already been in mass production.
If prospective IC suppliers were to enter the AMOLED DDI market, they would need to overcome various difficulties in AMOLED DDI development, including long processes of validation and revision, in order to mass produce at scale. As well, each individual panel supplier requires its own different set of IP cores (referring to the various functional modules in an IC) and specifications, making it difficult to manufacture AMOLED DDI that is universally compatible with all AMOLED panels. For instance, ICs that are supplied to Korean panel manufacturers by AMOLED DDI suppliers are incompatible with AMOLED panels from Chinese panel manufacturers, which require new wafer starts with their own requirements.
On the whole, other than certain DDI suppliers which have their own subsidiary foundries or have longstanding foundry partners capable of DDI production, TrendForce believes that fabless AMOLED DDI suppliers must not only secure a stable and sufficient source of foundry capacity, but also possess sufficient technological competency for mass production, in order to successfully expand their presence in the AMOLED DDI market.
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