Mini-LED market divergence is obvious LED manufacturers large-scale expansion of hidden worries

In the past two years, Apple, Samsung and other layouts of Mini-LED products have triggered an investment boom in the industry. On the occasion of LED manufacturers expanding the scale of Mini-LED production capacity in anticipation of market outbreaks, Guo Mingxi, an analyst at Tianfeng Securities, came out to pour cold water on everyone. It said that Apple will not launch any new products equipped with Mini-LED this year due to cost considerations.

Industry insiders told the author, "Apple's product strategy has greatly affected the changes in the Mini-LED market, which is not only to increase the demand for Mini-LED in its new products, but also to trigger the problem of peers following." If it does not launch new Mini-LED products, there will be overcapacity problems in the large-scale expansion of LED manufacturers. ”

The market is divided

In recent years, with the launch of Apple's M1 iPad Pro, 14/16-inch new MacBook Pro, as well as such as Huawei smart screens and some high-end notebook series have announced the use of Mini-LED technology, coupled with such as Sony, Samsung, TCL have promoted the corresponding new TVs, Mini-LED market demand has shown a rapid growth trend.

According to DSCC data, in the fourth quarter of 2021, in the high-end laptop market, 14.2-inch Mini-LED led with a share of 28%, followed by 16.2-inch Mini-LED with 26% and 14-inch OLED with a 17% share. For the first quarter of 2022, DSCC expects the premium notebook market to grow 126% year-over-year to 18.5 million units, with Mini-LED and OLED accounting for 50% each.

Although Apple's Mini-LED products are selling well, there are still large differences in the market, and behind the cost and yield issues.

Tianfeng Securities analyst Guo Mingxi recently posted that Apple will not launch any new products equipped with Mini-LED this year due to cost considerations.

However, DSCC analyst Ross Young holds a different view, pointing out that the 12.9-inch iPad Pro has sold well after its launch, and the product line will not need to launch other specifications of new products. But Young believes that Apple's Mini-LED iMac Pro is expected to debut this summer, the panel is expected to start shipping in June, and new products will begin to appear on the market in August and September, and the new products will be equipped with 4,000 Mini-LEDs, constituting 1,000 local lights.

In this regard, some Apple supply chain manufacturers told the author, "This year Apple will continue to launch new Mini-LED products, but the specific one is not clear, after all, according to Apple's strategy, each series of products will contain high, medium and low price segments, covering more people." ”

An industry insider admitted to the author, "This year Apple will not launch a laptop product with OLED panels, which is mainly due to the performance of OLED panels that meet Apple's requirements." But it is said that Apple is ready to cooperate with Samsung Display and LGD to jointly develop OLED panels for laptops, and may launch related products in two years. ”

"At present, the price difference between OLED screen and Mini-LED screen is not very large, but OLED panel technology is relatively mature, and its price decline rate may be faster than that of Mini-LED screen, when Apple's laptop series products may replace Mini-LED screen with OLED screens," the above-mentioned person further said.

Cost reduction becomes key

At present, Mini-LED is in a period of rapid development, and its market is growing rapidly. According to TrendForce Jibang Consulting estimates, Mini-LED backlit TV shipments will be 2.1 million units in 2021, and shipments will challenge 4.5 million units in 2022. Looking at the display, shipments of Mini-LED backlit LCD displays are estimated at 51,000 units in 2021 and will increase to 65,000 units in 2022.

However, the high cost will hinder the development of the Mini-LED industry. DSCC data shows that taking the 12.9 inches used for tablet computers as an example, the cost of Mini-LED screens is about 3 times that of traditional LCD screens, and cost reduction has become the key to popularization.

A person from a display manufacturer pointed out, "Whether it is to do LED display or make a backlight module, Mini-LED lamp beads are quite large, especially in TV, high-end screens can use more than 80,000 LED lamp beads on a screen, low-end screens also need to use more than 9,000 lamp beads, Mini-LED lamp beads as long as there are some slight differences, multiplied are astronomical, therefore, want to promote The Mini-LED application to accelerate the landing, Cost reduction will be a problem that various enterprises have to consider. ”

Tu Menglong, senior director of Lehman Optoelectronics Technology Research and Development Center, said, "Now Mini-LED products should reduce the cost of the most, only by reducing costs, can this industry be enlarged." For example, pixel engines like Lehman can save half, that is, reduce costs through technological innovation and R&D breakthroughs.

Jin Zhangyu, chairman of Qianzhao Optoelectronics, said, "Terminal manufacturers should use Mini-LED on mainstream models as soon as possible, and with this amount, there is a possibility of price reduction, and there is no amount that cannot be reduced." ”

It is worth mentioning that in order to diversify supply risks and reduce product costs, Apple is also actively looking for a second supplier of key components of Mini-LED. According to supply chain sources, sanan optoelectronics, the domestic LED chip leader, has recently successfully passed Apple's certification and is expected to join the supply ranks as soon as the second quarter.

The industry pointed out that although Apple's first wave of Mini-LED suppliers were pulled out by Fucai, Sanan Optoelectronics actively attacked Apple's Mini-LED backlighting supply chain goal has not changed, and the progress that was originally expected to pass the certification by the end of 2021 has been delayed.

It is reported that Sanan Optoelectronics has successively carried out Mini-LED import cooperation with a number of well-known downstream customers, and the product application areas include TVs, computers, etc. The company has also said that it will give full play to the advantages of the global Scale Advantage Mini-LED chip suppliers and accelerate the cooperation and promotion of Mini-LED and top international terminal application giants.

There are hidden concerns about scale expansion

Despite the higher cost of Mini-LEDs, the current market is divided. However, industrial chain manufacturers are still continuing to expand production capacity, especially in mainland LED manufacturers.

Recently, Sanan Optoelectronics' application for a fixed increase of not more than 7.9 billion yuan was approved by the CSRC, and the funds will be used for the Mini/Micro display industrialization project of Hubei Sanan Optoelectronics Co., Ltd. After the project reaches production, it will add 1.61 million gaN Mini/Micro-LED chips/ year, 750,000 gadgets/Micro-LED chips /year (all with 4 inches as equivalent pieces) and 84,000 units/year of packaging products for 4K display screens.

The 1.5 billion yuan fixed increase project of Qianzhao Optoelectronics was also successfully landed, mainly investing in Mini/Micro, high-efficiency LED chip research and development and manufacturing projects. After the completion of the project, a total of 6.36 million pieces of Mini-LED BLU, Mini-LED GB, Micro-LED chips, and high-efficiency LED chip production capacity will be added.

In addition, MTC also plans to invest 5 billion yuan in the construction of Mini-LED chips and RGB small-pitch LED display module projects in Nanchang High-tech Zone. Among them, about 2.5 billion yuan is planned to purchase 52-cavity MOCVD equipment and corresponding production capacity chips and supporting equipment for the production of Gallium Nitride Mini-LED chips.

In addition to Sanan Optoelectronics, Qianzhao Optoelectronics, MTC Shares, HC Semitek, Jucan Optoelectronics, Huayin Core, Ruifeng Optoelectronics, Guoxing Optoelectronics, Jufei Optoelectronics and other manufacturers have also increased investment to further expand production capacity.

However, after a large-scale expansion, will there be overcapacity of Mini-LED chips? In this regard, industry insiders said, "Although the current Mini-LED production capacity is in short supply, but the current domestic manufacturers to increase investment will inevitably have the risk of overcapacity, when the demand slows down, the substantial increase in production capacity will lead to overcapacity, triggering a price war will affect the profitability of manufacturers." ”

In fact, the LED chip industry in the past few years has also experienced from the market outbreak to the expansion of manufacturers, resulting in overcapacity and price wars, resulting in a decline in the profitability of LED manufacturers such as HC Semitek and Qianzhao Optoelectronics, and the net profit has been lost for consecutive years. And the LED manufacturers that have just eased up, and have greatly expanded the production capacity of Mini-LED, may repeat the situation of the price war caused by LED overcapacity in previous years!

(Proofreading/Lee)