Intense Competition in DDIC Supply Market Expected in 2024, with Continued Pressure on Prices

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TrendForce’s latest investigations forecast an exciting yet challenging year for the DDIC market in 2024. With prices in 2023 mostly stabilizing or showing a slight decline, the upcoming year is poised for a transformative shift. The market is bracing for a significant upward swing in demand—particularly for large-scale applications like TVs, gaming monitors, and commercial notebooks—which is set to drive a notable increase in panel shipments and consequently, a spike in DDIC demand. Despite this promising outlook, however, DDIC prices are expected to continue their downward trend due to ongoing market pressures.

Reflecting on the 2023 DDIC market, TrendForce observed that even as TV panel prices rebounded, panel makers felt short-lived relief and continued pressure to reduce costs from upstream component suppliers. This situation has compelled DDIC suppliers to strategically enhance their product designs for cost-effectiveness and forge stronger partnerships with more economical foundries.

The current scenario sees Chinese foundries emerging as key players and capitalizing on government-backed domestic policies aimed at aggressively expanding production capabilities. Their competitive pricing strategies have subsequently made them a magnet for DDIC suppliers. Since 2H23, these foundries have been operating at full capacity—thanks to peak season demand—and they continue to ambitiously expand their production capacity. In contrast, Taiwanese 8-inch foundries are facing a tougher market, with their need to sustain profitability leading to less competitive pricing and a consequent drop in utilization rates to 50%.

As 1Q24 ushers in the traditional market lull, major panel makers are expected to stick to their capacity control tactics. This conservative approach aims to temper overproduction and prevent potential panel price declines. The period will also likely see a downturn in the procurement of front-end components. However, the real test will come in the second quarter, as a surge in end-user demand is predicted to prompt panel makers to ramp up procurement, potentially challenging the supply-demand equilibrium in the industry.

A pivotal factor to watch is the increased concentration of panel production in Chinese factories, coupled with China’s accelerated drive toward domestic component production. This shift is putting Taiwanese suppliers, who have long dominated the DDIC market, under significant strain. They now face a multifaceted battle, not just in terms of pricing and technology, but also in terms of their future strategic positioning and market share. In response, Taiwanese suppliers are recognizing the critical importance of doubling down on technological innovation and R&D investments. Their goal? To keep pace with demand for ever-evolving high-end display technology, cement a distinctive brand image, and secure an unshakeable position in the market.