Global panel IC chip market situation and reasons: prices plummet, inventory pressure is high

As the global chip shortage enters the second stage: demand declines, inventory rises, and production capacity declines, the market trend of panel chips also shows a trend of plummeting prices. Upstream manufacturers are generally under pressure to destock, which further exacerbates this trend.

According to the news from the chip foundry Power Semiconductor, due to the impact of global inflation, the Russian-Ukrainian war and the slowdown in consumer electronics demand such as TVs, panel driver ICs, image sensors, niche memory and other chips will have a large proportion of revisions. It is expected that Orders have fallen by about 20%, and the pressure is now very high.

In 2022, the global semiconductor industry will undergo structural adjustment, from the previous capacity shortage to overcapacity, and the price drop in some fields can be described as tragic - the panel driver IC is also affected by the panel price drop, so that some manufacturers now prefer to default and lose money. No more production orders.

RSMC mentioned that the inventory pressure of driver panel IC chips is very high, and there have been cases where customers would rather pay liquidated damages to reduce inventory pressure. The adjustment of the semiconductor industry this time is greater than the decline in 2015 and 2018.

Earlier news, according to Omdia's tracking report, in June and July 2022, the monthly capacity utilization rate of display panel manufacturers is expected to fall to 70% and 69% of design capacity, respectively, the lowest value in a decade.

At the end of June, research data from TrendForce showed that LCD panels fell below the cash cost not long ago. The three major brands, including BOE, have cut production capacity to cope with the price drop. The news of the company's suspension of purchases has caused the decline in panel prices to expand this month.