Analysis by TrendForce on the latest acquisitions in touch and driver IC market
Touch IC expert Synaptics decided to buy the panel driver IC supplier Renesas SP Drivers for $470 million, and FocalTech and Orise Tech agreed to merge. On these recent happenings, market analyst TrendForce has shared this below analysis report on touch IC market:
The idea of (Touch with Display Driver) TDDI has been proposed for quite a while, and under this structure, the reduction of IC used would not only cut costs but help simplify the electric circuit and development. From clients’ perspective, the integrated supply chain would enforce the management efficiency of the procurement system. Currently, as touch IC makers and panel driver IC makers hold business resources categorized into distinct camps of suppliers, and panel makers dominate the driver IC development research and strongly control the orders, the promotion of TDDI faces significant obstacles.
Based on TrendForce’s analysis, the current TDDI development has three advantageous directions. Firstly, as the panel glass, touch module, and related components of white-box smart phones are mostly assembled by the mid-and small-sized panel module suppliers in the Chinese white-box market, they are fully capable to promote the generic-model products under this unique supply chain structure. Meanwhile, TDDI’s advantage to cut costs eases whit-box makers’ primary concern on prices, which would easily catch the eye of module makers.
Secondly, for the product with less frequent updates, such as Apple’s iPhone seeing the new model launched once per year, their longer product life cycle would accumulate volumetric shipment and lower the amortized development cost per unit, which underlines further the cost advantage of TDDI.
Unfortunately, the mainstream smart phones running on Android have the panels and touch modules updated frequently amid the shorter lifecycle, and with the condition, TDDI shows limited advantages compared to the conventional structure of touch IC and driver IC placed independently.
Lastly, in view of the panels integrating touch products strongly promoted by panel makers recently, Taiwan-based Innolux, AUO, and CPT have the development core on On-cell structures, while Korea’s LGD and Japan’s JDI are devoted to the more complex In-cell products. For panel makers, either In-cell or On-cell is the key weapon to share the touch business, and the integration of touch and driver IC is an inevitable trend in the long term. This kind of products are obviously beneficial to the TDDI development, which is likely to be the first segment for TDDI to promote.