In the trend of industrial shift and upgrade, the global market demands for the display panel keep growing fast due to the emerging markets in the IoT era, which are driving the rapid growth in production and technology revolution of upstream display driver IC. China will play a more important role in the supply of displays and purchase of the DDIC.
History of display panels
Display panel is an indispensable component of mobile phones, TV, tablet computer, PC, security monitor, vehicle displays, and other equipment.
- In the 1920s, as the first generation display technology, CRT（Cathode Ray Tube）technology was officially commercialized. The representative products are monochrome and color CRT TV.
- In the 1990s, PDP (Plasma Technology) and LCD (Liquid Crystal Display) technology were parallel. After 2000, plasma technology gradually withdrew from the market, and LCD gradually became the most mainstream display technology in the world.
- In the 2010s, the commercialization process of OLED (Organic Light Emitting Diode) made substantial progress. After that, AM-OLED has gradually become a strong competitor to LCD in small and medium-sized flat panel displays. However, due to the lifespan problem, it cannot replace LCD in the large screen market, nor LED in the even larger screen market.
- In the future, Mini/MicroLED is expected to become the next generation of technology.
Global display panel market: With LCD as the mainstay, OLED in rapidly growing tacks
LCD: Mature technology, obvious advantages in large screen
LCD has a significant market demand and share due to the maturity of its technology, and wide application in the field of large-screen displays such as TVs and laptops.
In 2020, global LCD panel shipments reach 233 million square meters, accounting for 96% of the global display panel market share.
LCD panels have a high penetration rate and will continue the high shipment level in the future, expected to reach 279 million square meters in 2025.
OLED: Popular in smartphones and wearables for its flexibility
Because of its unique flexibility, OLED can meet the needs of curved and folding screens and is widely used in small-screen products such as mobile phones, and some emerging electronic products such as smart wearables and VR devices.
In 2020, global OLED panel shipments are only 9.7 million square meters but are expected to grow at a compound annual growth rate (CAGR) of 16.34% from 2021 onward, reaching 25.1 million square meters in 2025.
According to the data from Omdia, the downstream application market continue to expand and the demand is growing steadily. TV and mobile devices as the largest application category maintain steady growth; new display application scenarios in commercial and automotive terminals are growing rapidly.
Display panel supply from China
LCD has taken the lead, and OLED investment has increased
Compared with South Korea and Taiwan area, display panel development in mainland China starts late.
With the rise of domestic panel manufacturers such as BOE, display panel supply in mainland China is rapidly catching up with a CAGR of 20.23%, with the market size growing from 43.6 million in 2016 to 91.1 million in 2020, and expected to reach 121.2 million in 2025.
In the field of LCD panels, the supply from mainland China will account for 45.28% of the global market by 2025.
In the field of OLED, mainly due to the high technical barriers in the industry and the slow development in the early stage, the market share is much behind. However, with the increasing investment in recent years, the overall OLED production capacity has grown rapidly.
In 2020, OLED panel production in mainland China accounted for 12.37% of global, exceeding 10% for the first time, and is expected to rise to 24.3% in 2025.
The global market of display driver IC
DDIC (Display Driver IC) is the key control component of the display panel.
The role of DDIC in a display panel
In LCD, the driver chip is used to provide a stable voltage or current drive signal for the lamp beads of the backlight, to control the light intensity and color of the lamp beads.
It can also change the color combination on the screen, thus ensuring the uniformity and stability of the display.
In OLED, the driver chip mainly sends commands to the thin-film transistor to realize the switching control of each light-emitting unit.
The market growth of the DDIC is slightly higher than that of the display panel
Benefiting from the growth of global display panels, the display driver chip market has also achieved rapid growth.
According to Frost & Sullivan statistics, the global display driver chip shipments have raised from 12.391 billion in 2016 to 16.540 billion in 2020, a compound annual growth rate of 7.49%.
It is expected, with the display technology upgrade and the expansion of application markets, the market of display driver IC will reach a further high, with shipments increasing to 23.320 billion units by 2025.
LCD still the main downstream of DDIC
Corresponding to the current display panel market, the main downstream market force of DDIC is still LCD, which is expected to remain at a high level of shipments in the future years.
With the rapid growth of OLED screens, the share of OLED driver IC has gradually increased.
At present, the LCD driver chip has achieved a stable supply, and TFT-LCD has turned to TDDI (Touch and Display Driver Integration) technology, so the market has entered a mature or even overly competitive stage.
With the growing demand for display panels in smartphones, TVs, and other electronic devices, the driver IC market is expected to achieve rapid growth globally.
Its main growth engines are the demand for high resolution, integrated features, and lower average selling prices.
Driven by strong demand in emerging applications, the growth rate may reach a cyclical peak in 2021
In 2021, the global market size of display driver chips is expected to increase to $13.8 billion, with a growth rate of 56.8% the highest in recent years, and one of the largest growth segments in the global IC market.
At present, the capacity shortage of wafer fabrication and encapsulation, and testing has raised the short-term price of the supply.
Between 2020 and 2021, although the market demand increased significantly, the global wafer capacity investment in 8-inch is limited, especially in the 90 ~ 150nm technology node, the capacity shortage is more obvious.
In short, price increases are the main driving force behind the growth of the global DDIC (it is estimated that, in 2021, about 53% of revenue growth will be driven by price, while about 2% by the volume increment).
With the display panel supply chain keep shifting to mainland China, China is foreseen to become the biggest buying market for global display driver IC.
In 2021, the market size of display driver IC in China will grow significantly by 68% year-on-year to US$5.7 billion and will arrive at US$8 billion by 2025, with a CAGR of 9%.
TDDI (Touch and Display Driver Integration ): New technologies boost new market demands
Facing the pursuit of a higher screen-to-body ratio in the smartphone industry, the integrated solution of display and touch driver IC can effectively decrease the periphery of the screen.
Therefore, TDDI has become the main development direction in DDIC.
And the market penetration rate of TDDI drivers has rapidly increased and opened up a new battlefield in the display drivers.
In the future, other electronic devices, represented by automotive electronics, will also widely use TDDI and drive the market to a new high.
According to statistics by Frost & Sullivan, since the first introduction in 2015, the shipments of TDDI chips have rapidly increased from 40 million units to 520 million units in 2019.
From 2020 to 2024, global shipments are expected to reach 1.15 billion units in 2024, with a CAGR of 18.3%.
Currently, TDDI is the mainstream driver solution for the displays of smartphones. In addition to Apple, most brand phones use TDDI. And to data from Omdia, the shipment of TDDI for smartphones reached 781 million units in 2020.
In the post-pandemic era, due to the expansion of distance education and the surge in demand for tablet PCs, the penetration rate of TDDI in tablet displays has grown rapidly.
With the increase in size and resolution, a screen needs two chips, which is currently becoming a mainstream solution trend. Data from Omdia, the shipment of TDDI for tablets reached 84 million units in 2020.
In the automotive industry, the TDDI market becomes mature.
IC manufacturers started the mass production of TDDI in 2020. At the same time, the panel manufacturers are actively developing in-cell touch solutions.
In the trend of smart concepts in the car industry, the demand for touch panels is expected to usher in a larger outbreak in 2022, driving the first purchasing heat of TDDI in automotive.
According to DIGITIMES, the giant display driver manufacturers, including Synaptics, Novatek, Himax, and FocalTech have all deployed heavily in this field and will start the mass output in 2022. According to Omdia, the shipments of TDDI for vehicle displays have reached 5 million units in 2020.