Shortage of $1 display driver chips is causing production delays for everything with a...

nanoguy

Posts: 799   +12
Staff member
Why it matters: The global semiconductor industry was worth $439 billion in 2020, and is on track to grow even bigger this year. However, that growth potential is being eroded by a shortage of $1 chips that are essential for every display panel that needs to be manufactured.

A global shortage of chips has wreaked havoc on the supply chains of the tech and auto industries. This has caused many companies to scale back production at a time when demand is soaring for their products. This is the result of a combination of factors, and the current situation will probably not change until the end of next year.

According to a Bloomberg report, there is now a serious shortage of display driver chips that is creating headaches for manufacturers of LCD and OLED panels. This in turn will affect all manner of consumer devices, from the lowly smartwatch to smartphones, tablets, laptops, computer monitors, TVs, smart appliances, and infotainment systems. Every new car or plane comes with one or more display panels, which only adds to the demand.

Interestingly, these are not the most expensive chips you can manufacture, such as the CPUs, GPUs, or the SoCs that go inside gaming consoles or mobile devices, which are complex and can cost between $100 to $1,000 or more for a single unit. Display driver chips, on the other hand, are relatively simple part that translate signals from your device into actual images on your screen, and cost around $1.

That's not to say that display driver ICs are not important, but companies don't need to use their most advanced process nodes to manufacture them. For instance, it's not uncommon for these chips to be made using 16 nm, 28 nm, 40 nm, or 95 nm process nodes. Some foundries such as SMIC even make 160 nm and 300 nm display driver chips for use in applications where power consumption is not a major concern.

Nevertheless, the shortage of these driver chips will likely cause further delays and price hikes for products that are currently in high demand, and the manufacturers of these chips don't see a solution in sight.

The shortfall is already visible in the doubling of prices for large LCD panels over the last year. Himax Technologies CEO Jordan WU told Bloomberg "I have never seen anything like this in the past 20 years since our company's founding."

Must read: Anatomy of a Monitor

Himax, alongside MagnaChip, Samsung, Novatek, FocalTech Systems, Synaptics, Raydium, MediaTek, and Silicon Works are among the key players in the display driver IC market, which was worth $7.1 billion in 2019 and is expected to reach $9.1 billion by 2023.

Wu explained that making more display driver ICs isn't possible as these are all fabless companies depending on foundries like TSMC, which have relatively limited production capacity for older process nodes that are typically used for fabrication.

Furthermore, building additional capacity and more advanced process nodes is too expensive and risky to make economic sense, which is why most of these companies are perfectly happy with mature process nodes where equipment has already depreciated and allows them to supply display driver ICs at a lower cost. As it is, demand for everything with a screen has only increased over the last year, so electronics aren't going to get any cheaper until we buy fewer of them.

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Mr Majestyk

Posts: 773   +653
Hopefully this will be the end of just-in-time manufacturing. Manufacturers need to start stockpiling essential ingredients etc since supply chains are so unreliable. It's literally insane that after a year manufacturers are still being caught out short knowing full well they might not get their next supply run in anywhere on time. This spreads like wildfire through the entire supply chain.

Wake-up, now is not the time for lean manufacturing practices.
 

pcnthuziast

Posts: 1,090   +800
A future bustling with technological marvels and advancements may never come to fruition. The sustainability of current endeavors and ideas of building upon what is already in place, fall apart when what is already in place is hollow and withers.
 

defaultluser

Posts: 184   +141
A future bustling with technological marvels and advancements may never come to fruition. The sustainability of current endeavors and ideas of building upon what is already in place, fall apart when what is already in place is hollow and withers.

While this is true, Covid isn't it.anywhere close to that hardcore End!

Adults in th USA are 3 months away from Herd Immunity, and resolving these component shortages will only take 12 to 18 months after, Expect full production in 2 years from today
 
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texasrattler

Posts: 1,172   +555
While this is true, Covid isn't it.anywhere close to that hardcore End!

Adults in th USA are 3 months away from Herd Immunity, and resolving these component shortages will only take 12 to 18 months after, Expect full production in 2 years from today
What good is herd immunity when you have no immunity against a variant virus. Covid isn't going anywhere nor will it ever be eradicated. Also, long covid is believed to be something permanent. It may be treatable but you'll never be the same.
 

mattferg

Posts: 171   +170
What good is herd immunity when you have no immunity against a variant virus. Covid isn't going anywhere nor will it ever be eradicated. Also, long covid is believed to be something permanent. It may be treatable but you'll never be the same.

Variants are created when someone is infected with an existing strain and is sick long enough for it to mutate.

If there’s herd immunity people don’t get sick and it makes it impossible for variants to be created. Get vaccinated.
 

gabelogan1324

Posts: 24   +20
I can't even get Corsair PCIe cables to finish my rig, because they've been out of stock everywhere for a couple months now.

2021 can eff off already.
sorry to hear that - lol about the 2021 comment. what a way to start a decade - scarce components for pc parts and some lackluster game releases (looking at you Cyberpunk lol)
 

kiwigraeme

Posts: 371   +302
I can't even get Corsair PCIe cables to finish my rig, because they've been out of stock everywhere for a couple months now.

2021 can eff off already.
Buy a second PSU - checked here in NZ - shop down the road has the basic set of corsair cables for about $90 .
You can use other companies cables ( but YOU MUST know what you are doing as you can destroy good hardware ) you need to find out what each cable does - and rejig the ends to match your corsair PSU . You can sometimes can not use the cables from another PSU from the SAME brand without checking the specs &/or with a voltmeter etc
 

zamroni111

Posts: 190   +130
I miss when the biggest issue was people hording toilet paper. how fast thing change
It's because nvidia ampere, ps5 and xsx were launched at almost the same time. Their gpu chips needs so many transistors compared to even zen3.
Full 5800x only needs 6 billions transistors which is only ~30% of rtx 3070 gpu chip and xsx/ps5 APU.
I think Nvidia could have postponed ampere without affecting their revenue as turing was still better than rdna.
If there was no ampere launch, amd won't release rdna2 as gpu's profit per transistor are much lower than cpu.
 

gamerk2

Posts: 541   +439
You must be referring to the Chinese.

Yeah, no. Trumps trade war was always stupid since there was no mechanism for the US to win. In order to win a trade war, you need to have the ability to insource production of whatever you are putting tariffs on. The US doesn't have that capability, since most local production has *long* been shut down and outsourced [tech especially]. All that happened is companies increased prices to account for the tariff since there's no threat of local competition.

Trumps entire ideology is that if he makes things hard for people they'll come crawling back in order to make a better deal. This works in the corporate world that is obsessed with short-term bottom lines, but no so much for nations which have many, many other things to worry about.

None of this was unpredictable, and things went about as badly as most of us expected it to.
 

UdyrL

Posts: 19   +27
Well this is a nice way to price gouge the consumer to double the price of TV's.

I'm not sure how having a shortage of $1 chips leads to a doubling of pricing. A shortage of TV's? Definitely. Double the price? Heck no!
Offer and demand. More people looking for TVs but there are few available.
 

Neatfeatguy

Posts: 361   +552
Offer and demand. More people looking for TVs but there are few available.

Wouldn't folks be more concerned about the cost of cell phones and small computer devices (such as a tablet or notebook or their stupid 007 wannabe watches) over a TV?

I know people today that don't own a TV. Sure, they may have a desktop computer at home with a monitor, but they don't use it much. They are generally on their tablet or cell phone when they watch something.

If we didn't have a TV downstairs the wife probably wouldn't even notice, she watches all of her shows on her iPad or sometimes on my computer, she rarely uses the TV. The kids might be a bit irritated since we limit their electronic device time, so they use the TV more often than anyone else does.