Global and China Display IC Industry Report, 2014-2015
The report contains the following aspects:
1. Development trends of LCD driver IC and touch IC
2. Analysis on downstream markets of LCD driver IC and touch IC
3. Analysis on LCD driver IC and touch IC Industries
4. Study on 10 LCD driver IC vendors
5. Study on 13 touch IC vendors and peripheral vendors
In the field of LCD driver IC and touch IC, two major acquisitions occurred in 2014. Synaptic took over the small and medium-sized driver IC business of Renesas; and FocalTech (the world's largest touch IC vendor by shipment) acquired Orise. Besides, the OGS touch giant Wintek went bankruptcy due to debt crisis.
Except 4K TV, LCD driver IC lacks highlights. Although the display resolution of mobile phones gets greatly improved, the ASP of LCD driver IC does not jump. After years of rapid growth, the mobile phone market has been saturated obviously, even the growth rate of smartphones has slowed considerably. Except first-tier brand vendors, second and third-tier brand vendors witness substantial decline in the mobile phone shipment.
In 2014, Chinese mobile phone market saw the first decline in the past 15 years, and the cumulative shipment decreased by 21.9% from 579 million in 2013 to 452 million, in which the shipment of handsets under domestic brands fell 23.3%. China’s smartphone shipment amounted to 389 million in 2014, marking China was still the world's largest smartphone market, but this figure was 8.2% lower than 2013. The tablet PC shipment dropped for three consecutive quarters, and many Chinese small and medium-sized tablet PC vendors collapsed. The only bright spot is 4K TV. After experiencing the first replacement tide that LCD replaced CRT, the TV industry is confronted with the second wave of replacement. Larger screens, lower prices and more high-resolution program sources stimulate the TV market.
Touch IC experienced a painful year in 2014. The yield of In-CELL / On-Cell was improved significantly, while the price slumped. For example, FocalTech’s touch IC ASP was NTD47.28 in 2011, NTD27.98 in 2013 and NTD18.15 in Q3 2014, representing the decline rate of 61.6 %.
It is a clear trend that In-CELL / On-Cell uses the combination of LCD driver IC and touch IC, which needs higher costs but intensifies performance apparently and shortens the supply chain. In 2018, the market share of In-CELL / On-Cell is expected to exceed 65%. In this case, touch IC vendors must conduct restructuring in advance, like Synaptic that took over the small and medium-sized driver IC business of Renesas as well as FocalTech that acquired Orise.
In order to retain customers and quickly open the market when launching new products, touch IC vendors have reduced prices to seize the market amid the sluggish mobile phone market, resulting in the sharp decline in their gross margin. The trend will continue in 2015, and ASP may flop by 20-30%.
Small Out-cell touch IC vendors will feel difficult to survive independently in the future, maybe acquired by LCD driver IC vendors or closed down. Touch IC vendors must avoid mobile phones and tablet PC filed, while industrial control and automotive fields are better options for them.
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