Huawei has been developing OLED display driver ICs through its subsidiary HiSilicon since 2018. Now, they are reportedly entering volume production in the first half of 2022, with a capacity of 200-300 wafers per month.
Currently, South Korean suppliers dominate the OLED driver IC market. According to the market research firm Omdia, South Korean companies accounted for approximately 90% of the market in 2020, with Samsung leading the way with a 50.4% global market share, followed by Magnachip, Silicinworks and Anapass.
Since China’s production capacity for OLED driver chips can’t meet the market demand, Taiwanese suppliers such as Novatek Microelectronics Corp. have been filling the gap. Novatek primarily supplies Full HD (FHD) OLED driver chips, counting Huawei and BOE Technology Group Co. among its Chinese customers. If Huawei itself successfully chips entered the competition, it might change the landscape.
Having already designed the much more sophisticated Kirin 9000 processors at 5nm, developing the display drivers, usually manufactured at mature nodes, poses no technical challenge for Huawei. However, it doesn’t mean that it will encounter no obstacle:
First, it is crucial to see if Huawei’s driver ICs will see wide adoption, a key factor for growth. In this case, domestic competitors of Huawei’s smartphone business like OPPO, Vivo and Xiaomi might still opt for suppliers like Novatek and Raydium Semiconductor Corp. Previously, Huawei’s Kirin processors were also not used by these brands.
Second, OLED driver ICs have started to move to the 28nm process from the previous 40nm node. As the 28nm capacity is already constrained in China and still suffers lower yield, Huawei, in order to catch up, might need to approach Taiwanese foundries like TSMC and UMC. Unfortunately, they are also facing capacity constraints.
Finally, supply chain disruptions caused by geopolitical factors still haunt Huawei and the entire Chinese semiconductor industry. According to SMIC, China’s most advanced foundry, it can only manufacture at 40nm if totally cut off from US semiconductor equipment and materials.