Chinese mainland foundries receive an influx of orders of TDDI chips with more discounts

By Greg Gao

(JW Insights) May 6 -- Chinese mainland’s semiconductor foundries are attracting new Touch and Display Driver Integration (TDDI) orders from driver IC design houses unwilling to pay the high prices charged by major Taiwanese foundries, reported Chinese language media outlets recently. 

Chinese mainland foundries offer significant discounts to those willing to use their services. The shift may accelerate the price war in the display driver IC market.

One IC design industry insider familiar with the matter did not reveal the exact discount rate given by Chinese foundries, only saying that they will accept all orders. At the same time, companies like TSMC and UMC still maintain high prices. Therefore, unless advanced manufacturing processes are required, driver IC companies are increasingly shifting their orders to foundries in the Chinese mainland, especially for manufacturing mobile TDDI, which mature processes will satisfy.

Foundries in the Chinese mainland are actively competing for driver IC orders because the production process for these types of ICs involves many steps, and the lead time can take up to three months, significantly longer than other types of ICs, which can effectively support short-term capacity utilization. Moreover, with the US sanctions on China’s semiconductor industry expanding, it is especially valuable for its manufacturers, whose wafer production is often reduced by 10,000 to 20,000, according to the report from media outlet in Taiwan.

The report also mentioned that major Taiwanese display driver IC manufacturers such as Novatek, FocalTech, and Fitipower Integrated Tech, have begun to manage their inventory levels to adapt to the current situation.