China’s subsidy policies and rising concerns over reciprocal tariffs are reshaping brand strategies in the panel market, indirectly influencing price trends for panel driver ICs, according to TrendForce’s latest analysis.

In the first quarter of 2025, average driver IC prices fell by roughly 1% to 3% quarter-over-quarter. Although a slight decline is still expected in the second quarter, the pace is slowing—suggesting a possible end to the prolonged downtrend seen in recent years.

On the demand side, two key factors have helped temper the rate of decline: Brands and panel makers have adjusted their procurement schedules to gradually bring inventory levels back to healthier levels. Meanwhile, China’s 2024 subsidy program has stimulated demand to support steady quarterly growth in driver IC shipments.

From the supply perspective, mature-node foundry prices have remained relatively stable, keeping cost fluctuations in check and contributing to overall price stability.

Still, several uncertainties continue to hang over the market. Chief among them is the sharp increase in raw material costs—particularly gold, which recently exceeded US$3,300 per ounce to reach a new record high. Since gold bumps are used in driver IC packaging, rising gold prices are pushing up material costs for manufacturers. Although current selling prices have not yet reflected this increase, a sustained surge could prompt suppliers to adjust prices accordingly.

Geopolitical risks, especially the unpredictable course of U.S.-China trade policy, also remain a key concern. While current reciprocal tariffs have not directly targeted panels or IC components, any future expansion or tariff coverage could raise production and logistics costs across the supply chain to potentially undermine price stability.

Looking to the second half of 2025, TrendForce expects driver IC prices to stay largely flat. A period of intensified price negotiations may unfold with panel makers cautious about rising costs and suppliers aiming to protect margins. The industry will remain sensitive to upstream wafer pricing, raw material volatility, and policy developments.

To navigate shifting conditions, supply chain players are likely to monitor gold prices and geopolitical trends closely, adjusting inventory and procurement strategies as needed to balance potential risks and opportunities.

By: DocMemory
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