“With higher resolution displays demanding high channel display driver ICs, and the growing trend in smartphone display driver ICs integrated with touch controllers, display driver ICs continue to occupy semiconductor and foundry companies,” said Tadashi Uno, director of materials and components market research.

While the trend toward slimmer bezels for LCD TVs and tablet PCs that use gate-on-array (GOA) technology is reducing the demand for gate drivers, higher resolution screens are causing growth in the source driver IC market.

Demand for smartphone panel source driver ICs is expected to triple between 2012 and 2018, and revenue is expected to grow from $139 million in 2012 to $325 million in 2018. Semiconductor makers are increasingly adding functions previously located in the processor to small and medium panel driver ICs.

In 2014 and into 2015, the market for display driver ICs is tight as TSMC, UMC, and other foundry makers are focused on building high-value semiconductors such as memory and processors for mobile devices. Since driver IC and timing controller (TCON) chips are priced comparatively lower, they are given lower priority than semiconductor chips.

On the other hand, foundry makers have not increased chip foundry prices. “As long as mobile semiconductor demand is still increasing, the driver IC and TCON shortage is expected to continue,” Uno said.

Figure 1 : Display Driver IC Revenues Forecast

With strong design wins among Taiwanese and Chinese panel suppliers, Novatek led the large-area display driver IC market in 1H’14, with a 28% share, followed by Samsung Semiconductor with 19% and Lusem with 15%. Samsung Semiconductor and Lusem are the main driver IC suppliers for Samsung Display and LG Display, respectively.

Renesas SP driver IC s, which are used by many small and medium display makers in Japan, Korea, and Taiwan, led the small/medium display driver IC market in 1H’14 with a 33% share, followed by Novatek with 28%, Samsung Semiconductor with 16%, Orise with 7%, and Himax with 5%.

Withthe trend toward integration between smartphone display driver ICs and touch panel controllers—called touch and display driver integration (TDDI)—touch controller companies have started to acquire driver IC makers to compete in the market more effectively, with Synaptics and FocalTech announcing acquisitions of Renesas SP and Orise, respectively.

The advantages include simplifying signal cables and ICs, and reducing costs for the flexible printed circuit (FPC) and assembly.

“The semiconductor integration process and business model adjustment will be crucial to the success of TDDI,” Uno said.