Chinese panel driver IC vendors are the ones most willing to drop prices furthest offering falls of 10-15%.
Despite sluggish demand in the terminal market and increasing inventory among panel makers and panel driver IC vendors, foundries still adjusted their product mixes accordingly, utilized vacated production capacity in multiple ways, and effectively allocated and maintained utilisation rate.
Driven by a shortage of chips in the past two years, foundry pricing has continued to rise in the last few quarters and has remained at a high level. However, driver IC manufacturers are now facing requests from downstream customers to reduce prices.
Pincered by upstream price hikes, these companies have been forced to temper wafer input planning.
When panel driver IC wafer input is reduced, and the adjustment of other product mixes cannot bridge the production capacity gap, the overall utilisation rate of fabs is likely to see disruption in 2H22.
TrendForce believes that for fabs, panel driver ICs are less profitable than other applications but they are one of the most efficient products used by fabs to round out capacity.
After driver ICs suffer a sharp drop in pricing and wafer input plans are reduced in Q3, the important thing will be whether foundry pricing remains the same as in 2Q22, or be reduced to maintain a high utilisation rate.