A One Dollar Chip With The Power To Lay Low Entire Industries
There are a wide variety of reasons why supplies of electronics devices, from GPUs to Gran Turismos are in short supply and one of the reasons is a display driver shortage. This doesn’t refer to your latest Adrenalin 2020 or GeForce Experience updates, as new releases continue to taunt people on the hunt for a new GPU, but is instead a tiny and inexpensive piece of hardware that any screen capable of displaying graphics needs.
These ICs are used in screens in automobiles, POS devices and even your TVs and phones, and is necessary to draw the signal from whatever graphics processor onto the screen. The problem is that the lines which manufacture these chips are running at 100% capacity but are still unable to keep up with demand. Himax is one of the main driver IC designers and they rely on TSMC, UMC and other major fab companies to manufacture their 16nm 8″ and 12″ lines, but they have to compete with all of the other customers the fab has.
The manufacturing process is one of the most mature going, with almost perfect yields and that is perhaps the biggest problem. Fabs like TSMC are not likely to add more lines for these nodes, as they are rather old and there is little profit to be had by expanding current capacity. Likewise there is little financial sense in breaking ground on a new fab for these chips, as that would drive the cost per part up significantly to cover the bill from that construction.
Even so, something does need to happen to alleviate the supply shortage. A handful of years ago, a screen on all your household appliances was unusual but now everything from your fridge to your bathroom scale has a display and needs one of these ICs. LCDs in cars were limited to high end models, now even a pickup truck is likely to sport at least a few.
The shortage isn’t going away, and consumers are unlikely to accept a move back to purely analogue displays so something will have to give. Unfortunately the most likely thing is the price, which we are already seeing in TVs and other large panel displays. Cars and tablets are likely to follow.
Now the crunch in a handful of such seemingly insignificant parts -- power management chips are also in short supply, for example -- is cascading through the global economy. Automakers like Ford Motor, Nissan Motor and Volkswagen have already scaled back production, leading to estimates for more than $60 billion in lost revenue for the industry this year. The situation is likely to get worse before it gets better.