- Even with the impact of COVID-19, the 8-inch wafer supply is still tight because of the increasing demand of power management integrated circuits (PMICs), contact image sensors (CIS), and other sensors as well as the continued strong demand of IT displays.
- TV panel demand is starting to rebound and the 8-inch wafer supply for large-sized display drivers could worsen in the third quarter of 2020 (3Q20).
- The tight supply of 8-inch wafers could become the norm in the long term because there is little possibility of investing new capacity in 8-inch foundries.
The 8-inch wafer supply remains tight during COVID-19
The large-sized display driver ICs are produced using the 8-inch 0.11–0.16 micrometer (µm) process, and mainly include TV, monitor, and notebook display driver ICs. Although TV display demand has declined somewhat because of COVID-19 in the second quarter of 2020 (2Q20), the demand of IT displays has remained very strong, which means that the demand of large-sized display driver ICs has not shrunk.
Moreover, many other applications are usurping 8-inch wafer capacity, such as PMICs and complementary-metal-oxide-semiconductor (CMOS) image sensors, among others. Following the development of 5G and the Internet of Things (IoT), both PMIC and CIS are growing with increasing demand. For example, PMICs are consumed 2.5–3 times more for 5G smartphones than for 4G ones. Additionally, the demand of under-display fingerprint sensors is accelerating with the increase in AMOLED display demand for smartphone displays. Therefore, the 8-inch wafer supply is still tight during COVID-19.
PMICs are mainly produced in 8-inch wafers with the 0.11–0.18µm, CIS are mainly produced in 8-inch wafers with the 90nm and high-end CIS (>10 megapixels) are produced in 12-inch wafers with the 65nm or less, and under-display fingerprint sensors are typically produced in 8-inch wafers with the 0.18µm.
The 8-inch wafer supply for large-sized display drivers could worsen in 3Q20
Recently, the demand of TV panels has started to rebound, and the demand of large-sized display driver ICs has been increasing; however, there has been minimal capacity increases for 8-inch wafers worldwide. In contrast, PMICs can bring higher revenue and profit, around twice as much as the display driver ICs in 8-inch wafers. Thus, foundry makers are willing to allocate more and more of their 8-inch wafer capacity to PMICs and others that offer better profits. The capacity for display drivers will shrink and the 8-inch wafer supply for large-sized display drivers will likely worsen in 3Q20.
The tight supply of 8-inch wafers could become the norm in the long term
Like the display panel investments, the semiconductor industry is also focusing on the construction of larger wafer fabs; there are many new investments going toward 12-inch wafers with a finer process. However, there is little possibility of investing new capacity in 8-inch foundries, and therefore, the tight supply of 8-inch wafers could become the norm in the long term. Some display driver design houses intend to transfer some large-sized display driver ICs to 12-inch wafers, such as Novatek and Himax, which produced large-sized display driver ICs in Nexchip’s 12-inch wafer with the 0.15µm process.