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LCD driver IC shortage fuels price hike

Posted: 11 May 2010 ?? ?Print Version ?Bookmark and Share

Keywords:LCD? driver IC? supply shortage?

Strong customer demand early this year has prompted shortages for select parts and extended lead times for analogue, memory, logic and other IC vendors. In fact, analog vendors must turn away business, because they cannot meet huge demand.

Now, LCD driver ICs are in short supply, according to one vendor in the arena. "We are seeing capacity tightness throughout the entire driver IC supply chain. This has led to severe shortage in driver IC across the board. The unfulfilled demands are at levels far above what we have experienced," said Jordan Wu, president and CEO of Taiwan's Himax Technologies Inc., developer of display drivers for large-sized TFT-LCD panels.

Himax itself is raising prices for its LCD driver chips. "The shortage has resulted in an increase in our cost of revenues and we are raising our selling prices to offset such impacts," Wu said in a statement, which also disclosed the company's Q1 results.

"The capacity tightness may have become a mid- to long-term trend. This is because, while the TFT LCD industry is aggressively expanding capacity again after several quarters of slowing down, the driver IC industry's overall capacity growth now appears limited," he said. "On the foundry side, display drivers' constant demand for large volume and favorable price has left it in a relative disadvantage when the foundry capacity becomes tight. The backend vendors, including tape, gold bump, packaging and testing, are still hesitant to expand aggressively, following several quarters of heavy losses during and after the global financial crisis."

For the Q1 10, Himax reported net revenues of $175.5 million, representing a 39.7 percent increase from $125.7 million in Q1 09, and a 1.8 percent decrease from $178.7 million in Q4 09.

Net income attributable to Himax stockholders for Q1 10 was $9.1 million or $0.05 per diluted ADS, up from $4.4 million or $0.02 per diluted ADS in Q1 09, and down from $11 million or $0.06 per diluted ADS in Q4 09.

For Q2 10 guidance, Himax expects revenues to grow by 10 to 15 percent and gross margin to remain flat. Second quarter 2010 GAAP earnings per ADS is expected to be in the range of $0.06 to $0.08.

- Mark LaPedus
EE Times

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