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Taiwan LCD driver IC suppliers say orders remain strong

Some Taiwan-based LCD driver IC suppliers have claimed their book-to-bill ratios remain above one with clear order visibility through the end of this year and even 2022, in response to recent reports indicating LCD panel prices have started falling due to a slowdown in TV and other end-market device demand.

Order visibility for the fourth quarter stays brisk, said the chip suppliers, adding that they remain optimistic about sales for the rest of this year.

LCD panel prices have fallen to the levels in early 2021, with suppliers including AUO and Innolux experiencing on-month revenue drops recently. On the contrary, chip suppliers including Novatek Microelectronics, FocalTech Systems and Fitipower Integrated Technology saw their August revenue surge over 70% on year to respective record high levels.

Driver IC backend specialists are guardedly optimistic as they are aware of downstream makers' overstocked inventory of chips, despite the still-robust shipments they have, according to industry sources.

However, the persistently tight foundry capacity has still led to insufficient fab capacities for LCD driver IC suppliers, which may continue to encourage downstream companies to stockpile more available chips, the sources said.

But uncertainty in end-market demand is still prompting LCD driver IC suppliers to freeze their quotes for the fourth quarter, the sources indicated. Despite a continued ramp-up in shipments Taiwan-based LCD driver IC firms are poised to enjoy in the fourth quarter, the companies may see their gross margins slip from the peak levels in the third quarter due to additional manufacturing costs they have to absorb, the sources said.