While DDI revenue rose steadily during the first two quarters of 2010, the reverse will be true for the last two quarters of the year, as well as for the first quarter of 2011.
Starting from $1.63 billion in the second quarter, DDI revenue will dip to $1.59 billion in the third quarter, slide further to $1.51 in the fourth quarter, and then take a dive to $1.36 billion in the first quarter of 2011. By then, DDI revenue will have fallen a hefty 16.2 percent compared to the second quarter of 2010.
The figure shows iSuppli’s DDI semiconductor revenue forecast from the first quarter of 2009 to the first quarter of 2011.
Source: iSuppli, USA.DDIs are semiconductors that provide the voltage or drive signals for LCD as well as for Organic Light Emitting Diode (OLED) and plasma displays.
“Despite continued growth in the global LCD market, concerns over inventory build-up and slipping consumer confidence in the Western hemisphere will work to slow order rates for DDI components during the next three quarters,” said Randy Lawson, manager and principal analyst for display and consumer electronics at iSuppli. “Rising unit shipments of panels in applications including LCD-TVs and netbooks will not translate into stable growth for the large-panel DDI sector.”
Large panels account for 60 percent of total DDI market revenue.
“DDI unit growth also will be offset to a significant degree by the evolving technology of Thin Film Transistor (TFT) panels, an LCD variant that offers improved image quality,” Lawson said.
“Large-sized LCD panel technology and semiconductor trends are heading toward the use of so-called triple-gate designs, which integrate more complex semiconductor functionality onto panels and reduce external, discrete driver IC design complexity in order to lower costs and to increase reliability of notebook and monitor displays. The new designs call for fewer discrete driver chips to be used, thus impacting the overall growth potential of the DDI space.”
Furthermore, the DDI market will be buffeted by continuous cost-down measures from an industry that’s intent on slashing losses, as well as by projected declines in the Average Selling Price from 2010 to 2014—developments that will further exacerbate revenue woes.
As a result, the industry’s five-year CAGR beginning 2009 is expected to decline 5.2 percent to $4.2 billion, iSuppli semiconductor market research indicates.
Pockets of strength do exist that can help compensate for the general slide in DDI revenue. Uplifting factors include the adoption of stunning OLED screens into a greater number of mobile display applications, the newly energized market for eReaders and tablet PCs, and the increased implementation of high-definition panels in monitors and TVs.
Source: iSuppli, USA.
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