Smart stuff
Author | Yunpeng
Edit the | Heart
Giants lose orders, rookies get on the horse, open and dark fights, and the fruit chain has not been peaceful recently.
A few days ago, Tianfeng Securities analyst Guo Mingxi gave a prediction that BOE will replace Samsung as the largest supplier of Apple's iPhone screen, and Samsung is no longer the exclusive supplier of the Pro version of the iPhone screen.
According to another investigation report by Guo Mingxi, Sunny Optical Technology (hereinafter referred to as Shunyu), which is also a domestic fruit chain company, will also receive more orders from Taiwan's optical giant Dali Guangkou and become the largest supplier of Apple's latest iPhone 14 main camera. The improvement of opponents' technology and production capacity has weakened Dali Guang's bargaining power over Apple to a certain extent.
On the other hand, Goertek (hereinafter referred to as Goertek) lost Apple orders, the market value lost nearly 8 billion yuan in a single day, and the stock price fell by 25% in three days, and its performance suffered a heavy blow, and its lost AirPods Pro orders have been divided by Foxconn and Luxshare Precision. Some voices in the industry believed that Goertek lost the order, mainly because he was "not obedient enough".
Just recently, Apple's self-developed screen new progress was exposed, and the first self-developed MicroLED screen is about to land on Apple Watch, which is currently being tested. MicroLED is considered by many people to be the "ultimate" goal of screen development at this stage, taking into account the "pixel-level" light control of OLED and the "long life" of LCD, and the current hot MiniLED technology is only a "transition" solution in comparison.
From self-developed chips to self-developed screens, the boundaries of Apple's control of core technologies continue to expand. For the screen, which accounts for nearly one-fifth of the cost of the whole machine parts, Apple is quite ambitious.
Whether it is the adjustment of the proportion of supplier orders or the increase of self-developed technology, behind this series of changes, we seem to be able to grasp a trend: Apple is constantly strengthening its control over core technologies. For pure self-developed technologies such as chips, Apple will continue to consolidate its advantages, and for technologies that it cannot fully control for the time being, Apple must also obtain the best quality solutions in the supply chain and maintain a leading position, so as to achieve "not being controlled by others" and avoid the situation of a single company.
This is also one of the underlying logic of the complex game between Apple and suppliers.
The competition between BOE and Samsung in the field of OLED screen is a realistic version of Apple's underlying logic, and it is also a true epitome of the current stage of Chinese mainland enterprises in Apple's core supply chain. Behind Apple's checks and balances tactics, how BOE has gone from chaser to challenger in the OLED track, and what new cakes Samsung has aimed after losing iPhone screen orders deserve further attention.
Apple's intention to strengthen the control of core technology and strengthen the control of suppliers has been put on the surface, and the further development of Apple's self-developed technology industry may have a more far-reaching impact on the entire technology industry chain.
First, Apple supports BOE and gets rid of Samsung's monopoly
Behind the change in the proportion of screen orders, Apple must be the core promoter, and many industry views have mentioned that Apple chose to increase the proportion of BOE orders, more from the perspective of its own interests.
As mentioned earlier, in areas that it cannot fully "control", Apple should avoid being monopolized and subject to others.
In fact, for Apple, which attaches great importance to product experience and product interactivity, screen display has always been very interested, but it has not fully controlled the core technology and realized self-research in the field.
Farther away, since 2014, Apple has bet on the future-oriented "ultimate" display technology MicroLED, and acquired MicroLED technology startup LuxVue early to start technology research and development, but has not yet landed products.
In the early years, the iPhone used LCD screens, and suppliers included LG in South Korea, Sharp in Japan, JDI and other manufacturers. The iPhone X in 2017 is an important turning point, this year, Apple's iPhone officially entered the era of OLED screen, and Samsung also became the core supplier of Apple's iPhone OLED screen from this year.
From the iPhone X to today's iPhone 14 series, the OLED screens of Apple's two high-end models, Pro and Pro Max, are almost exclusively supplied by Samsung, and LG is usually the standard version of the screen supplier.
BOE has appeared in Apple's TOP200 supplier list since 2020, and the proportion of supply in the iPhone 14 standard version is still relatively low.
Of course, from the perspective of technology research and development, Apple and Samsung have a lot of screen patent cross-authorization, not completely controlled by Samsung, but in the final analysis, patent cross-licensing can not prevent Samsung from selling high-end OLED screens to Android mobile phone manufacturers, and it is difficult for Apple to achieve an "exclusive buyout" long-term lead.
At the same time, high-end OLED screens have long been dominated by Samsung, which has also weakened Apple's bargaining power in this field. According to the disassembly of the iPhone 13 Pro, the cost of a Samsung OLED screen is about $105, and the cost of components for the entire iPhone 13 Pro is about $570, and the screen cost accounts for nearly one-fifth.
At present, the official maintenance price of the external screen of the iPhone 14 Pro Max is about 3200 yuan, which is about the same as the price of an Android high-end mobile phone.
In comparison, the cost of Apple's self-developed A15 chip is only about $45.
Apple, which has long been subject to Samsung, is not a day or two to cultivate new suppliers. However, South Korea's LG is mainly focused on large-size OLEDs, and there are no obvious advantages in small-size flexible AMOLED mobile phone screens, and there is no key investment.
Japan's screen supply chain has gradually shifted upstream in recent years, and its competitiveness in the field of terminal screens has long been lower than that of its heyday.
On the domestic side, in 2017, when the iPhone X was released, BOE officially put into production the first 6th generation flexible AMOLED production line in Chengdu, Sichuan, becoming the earliest enterprise in the field of domestic OLED screens. At present, BOE is more advanced in terms of OLED technology layout and production capacity.
Some analysts pointed out that if Apple has to support a supplier to compete with Samsung, BOE is undoubtedly a more suitable choice.
From Apple's point of view, BOE's plan has cost advantages compared with Samsung, and the increase in the proportion of BOE's orders can further enhance the bargaining power between itself and Samsung.
A number of industry insiders also revealed similar views, on the surface this is an Apple order game between BOE and Samsung, but in fact, Apple's will dominates, and Apple's supply chain adjustment has always been the same.
The adjustment of the proportion of screen orders is not only a matter for BOE and Samsung, but also a key step for Apple to get rid of the screen being controlled by people.
Second, eight years of dormancy to break through OLED, BOE through the rise of Apple to accelerate
Although from a certain point of view, domestic screen manufacturers have a feeling of being "shot" and have become bargaining chips between Apple and other suppliers, but from the positive side, being able to be among the key component suppliers of Apple's core products is itself an affirmation of the hard power of manufacturers.
The reason why Apple chose BOE is inseparable from BOE's previous investment accumulation in the OLED field for nearly a decade. Just as Apple's cooperation with Sunny in the field of mobile phone lenses also stems from the communication and R&D promotion that began ten years ago, rather than the decision to shoot the brain.
As we all know, the development of the domestic screen industry is later than that of Japan, South Korea and Taiwan, and the initial stage is mainly to undertake the industrial transfer of Japan and South Korea, and is greatly affected by the head manufacturers of Japan, South Korea and Taiwan.
BOE's accelerated layout of OLED technology was mainly around 2013, when BOE launched OLED prototypes, began to increase in talent recruitment, technical research, and established an OLED research and development center.
At that time, BOE founder Wang Dongsheng attached great importance to self-developed technology, which also made BOE more determined in the research and development of advanced technologies such as OLED.
BOE founder Wang Dongsheng
The development of the screen industry is long-term and asset-heavy, from technology research and development, construction of production lines to final production, terminal application, it takes a long time in years. At present, the investment of a high-generation OLED production line can reach more than 46 billion yuan.
In 2017, when Apple's iPhone X was popular with a smartphone OLED screen, BOE's first small and medium-sized OLED production line was also officially put into production, and BOE's 6th generation flexible AMOLED production line in Chengdu also became the first 6th generation flexible AMOLED production line in China.
It is understood that the capacity of OLED key production equipment evaporation machine is still very scarce, and there are only seven most advanced evaporation machines produced by Canon Tokki in Japan, of which Samsung took five, LG ate one, and the other was taken by BOE.
Schematic diagram of the Canon Tokki OLED mass production system
In 2018, Huawei P20 Pro was equipped with BOE flexible AMOLED screen for the first time, which is also an important breakthrough for domestic flexible AMOLED screens.
Last year, as of December 2022, BOE has applied for more than 28,000 patent applications related to flexible OLED, accounting for more than one-third of the 80,000 independent patents applied for. It is worth mentioning that among the annual new patent applications, patent applications in the fields of flexible OLED, sensing, artificial intelligence, and big data account for more than 50%.
According to a report released by IFI Claims, a global patent service organization, BOE ranks 11th in the world in the ranking of US patent authorizations and ranks among the top 20 for five consecutive years.
Mastering a large number of technology patents is inevitably inseparable from strong investment in the field of research and development, and in 2021, BOE's investment in research and development has reached 12.4 billion yuan.
As for Apple's OLED project, some insiders said that in fact, Apple began to contact Apple very early, not in the past one or two years, but in recent years, the landing results have gradually increased, and it has gradually been understood by more people.
It can be seen that BOE won Apple's supply chain orders, and behind Samsung, the improvement of technology and production capacity hard power is an indispensable key link. Being able to become a supplier of the same generation of iPhone Pro version shows that in terms of screen performance characteristics, the difference between the two is small.
In the field of OLED, BOE has also won a large number of orders from Samsung Android mobile phone manufacturers, including Huawei, Honor, Xiaomi, OPPO, vivo and other mainstream mobile phone manufacturers, almost all of which have used BOE's flexible AMOLED screen in flagship machines.
On the basis of years of technology accumulation, the benefits of eating apple orders to BOE are obvious. The most obvious point is definitely reflected in the real interests, for Apple, he can get a more cost-effective screen solution, for BOE, this is also a big deal.
Looking back at BOE's revenue and net profit over the past two decades, we can see that 2021 is a very critical juncture.
BOE's total operating income from 2001 to 2021, source: Wind
Compared with the steady improvement of the previous decade, BOE's revenue jumped sharply to 200 billion yuan in 2021, a year-on-year increase of more than 62%, while the annual net profit increased by 412% to 25.8 billion yuan, which is equivalent to the sum of the net profit of the previous ten years.
BOE's net profit attributable to parents from 2001 to 2021, source: Wind
From the perspective of gross margin more directly related to the product, BOE's gross profit margin also reached a record high of nearly 29% in 2021, compared with a gross margin of about 19% in 2020, with a gross margin increase of more than 50%.
In 2021, Apple released the iPhone 13 series, and according to industry information, BOE also got a small number of orders for the standard version of iPhone 13 in this year. In December 2021, BOE shipped 10 million OLED screens in one month, accounting for one-sixth of the annual OLED shipments, and the fourth quarter after the release of Apple's new machines has always been the peak period for supplier shipments, which shows the large demand for Apple.
Although BOE's performance has slowed down in 2022, this has a lot to do with the overall weakness of the entire mobile phone, home appliance, and PC market, and the sharp cuts of Apple's iPhone 14 Standard Edition and iPhone 14 Plus also have a big impact on BOE.
In general, BOE got Apple orders, although it is inseparable from Apple's own strategy, but the rapid growth of BOE's hard power and subsequent higher development potential are also worth paying attention to. The cooperation between BOE and Apple is undoubtedly a win-win.
Third, BOE still needs to maintain a sense of crisis, Samsung has targeted Apple's "OLED big order"
After talking about BOE, let's look at Samsung's side. For Samsung, which has long monopolized Apple's high-end screen orders, the sense of crisis that future orders may be snatched away may also bring positive stimulation to Samsung, allowing Samsung to concentrate more resources on other high-potential directions in the future.
A loss may turn out to be a gain.
For BOE, once it becomes the largest supplier of Apple's iPhone screen in the future, it is still necessary to maintain a certain sense of crisis in the face of huge profit returns, and even leave a sufficient "back hand".
In Apple's supply chain, over-reliance on Apple has never been a good thing.
Farther away, the multi-touch screen used in Apple's original iPad, the core technology supplier behind it, Chenhong, also made a lot of money because of the exclusive supply, but then Apple worried that it was the only one and forced it to hand over the technology patent, which eventually led to it being overtaken by opponents.
Becoming Apple's exclusive supplier comes with the risk of being replaced.
Closer to say, OFILM and Goertek's "lessons from the past" are still in front of us. OFILM, which once ranked first in global shipments of camera modules and won orders from Apple, fell all the way after "breaking up" with Apple, losing more than 30 billion yuan in market value, and net profit fell sharply quarter after quarter.
Goertek, which used to be the largest OEM of AirPods series products, has now been divided among Foxconn and Luxshare Precision, and after the news of losing Apple's orders was exposed, its stock price fell by 25% in three days, and layoffs followed.
And Daliguang, which once competed with Apple for pricing and held the most orders for Apple's iPhone lenses, was gradually overtaken by the latecomer Sunny and lost its position as the largest supplier of lenses.
Although under the "win-win" result, BOE has obtained a rich return from Apple's orders, but the sense of crisis should be said to be unabated.
For Samsung, which lost the order, reducing the proportion of Apple's iPhone orders can also allow Samsung to have more resources and experience on the competition of the new track to a certain extent.
At present, Apple's contribution to Samsung Electronics' revenue is about 6.6%, which is more than 36% of Apple's revenue compared to LGD, which is also a screen supplier, which is not high.
In the field of screens, Samsung has completely faded out of the LCD screen competition in recent years, and has focused on OLED technology, for Samsung, the OLED battle is actually a battle that cannot be lost.
Samsung has set up a special "OLED ERA" website to display Samsung's OLED-related technologies and products
To this end, Samsung has invested heavily in OLED technology research and development, in the field of large-size OLED, through QD-OLED technology and LGD's WOLED technology to compete, in the field of medium-size OLED, Samsung has carried out exclusive cooperation with Apple, and is likely to eat most of Apple's medium-size OLED orders.
According to an Apple OLED screen iteration roadmap predicted by Omdia, Apple's iPad, MacBook, iMac three extremely important product lines will gradually adopt OLED screens in the future.
Apple IT OLED panel roadmap (Omdia forecast)
According to industry information, medium-sized OLED designs a key "double-layer series OLED technology", and Apple designs the driver chip, OLED structure and wiring of the double-layer series OLED screen, and gives Samsung and LG to develop mass production technology, of which Samsung's research and development progress is the fastest.
The industry generally predicts that around 2024 we can see Apple's iPad, MacBook and other products using OLED screens on the market, it is conceivable that the new tens of millions of OLED markets brought by iPads and MacBooks will inevitably become an important cake for Samsung.
From a technical point of view, Samsung's future share of Apple's iPhone screen continues to decline, which does not mean that Samsung is losing ground in the screen industry. Because Samsung's core advantage in the global screen industry lies in its control of the technical system and upstream supply chain system, in this regard, domestic screen manufacturers still have a lot of room to catch up.
Taking the core OLED light-emitting materials as an example, the high-end suppliers of these materials are concentrated in the United States, Japan, South Korea and Europe and other countries and regions, and Samsung has a very close relationship with these head manufacturers, which can be the first to obtain the latest light-emitting materials and enjoy exclusive supply rights for a certain period of time.
In addition to the systematic advantages accumulated in materials and production equipment, Samsung's large number of technical patents in the OLED field are also a hurdle that cannot be bypassed, but in recent years, domestic manufacturers have also begun to cross-patent authorization with Samsung to further break through the blockade of patents.
In any case, behind the BOE top, behind Samsung's failure, a new crisis still exists, and a new contest in different product directions has already begun.
Fourth, behind the turbulent adjustment of the fruit chain, Apple's control over technology and supply chain continues to strengthen
Apple in the field of screens, want to get rid of the screen subject to people, and then let us pay attention to the game between BOE and Samsung. As mentioned at the beginning, this is just a microcosm of Apple's strengthening of its control over technology and supply chain.
For the technology that it can do, Apple must do it itself, and for what it can't do, it is also determined to get rid of the situation of heavy dependence on a supplier, which has always been one of the main logic of Apple's supply chain adjustment.
For example, in the field of complete machine foundry, from Foxconn alone, to today's Foxconn, Luxshare Precision, Pegatron, Wistron and other manufacturers share orders. While Foxconn still dominates, it's not "exclusive" after all.
In the field of mobile phone lenses, the rise of Sunny has also allowed Apple to increase its bargaining power with Dali Guang.
Even for the communication baseband chips that it has been struggling to achieve, Apple has been insisting on self-research, and even acquired Intel's baseband business unit with heavy funds.
Although the research and development progress has been frustrated frequently, Apple is still resolute in implementing substitution, which Qualcomm has also made it clear that the proportion of orders for Qualcomm 5G baseband chips in Apple's iPhone will indeed decline in the future, which proves that Apple is indeed promoting the replacement plan at its own pace.
Even in the field of WiFi and Bluetooth chips, Apple also wants to replace the Broadcom solution through self-developed chips, which once caused widespread heated discussions in the industry.
On the occasion of the change in BOE and Samsung iPhone orders, some Apple's self-developed screen information has been released, and this information is even more worthy of attention.
This information shows that in the field of screens, Apple's ultimate goal is not only to achieve mutual checks and balances between suppliers, but more importantly, to master the core technology of the screen in their own hands and let themselves occupy an absolute technological dominance.
Whether it is foundry, lenses or screens, these are all things that Apple cannot fully control in its own hands, so what about the fields that can achieve self-research? Apple will relentlessly and resolutely achieve self-developed substitution.
The chip is the most powerful proof of this.
With the launch of the M1 and M2 series of chips, Apple is about to completely replace Intel processors in Mac computers. At present, the last Mac is not replaced, but it is also a matter of time.
According to the current industry exposure information, "M2 Ultra", a multi-core "monster-level" chip focusing on productivity, is already on the way. It can be said that it is only a matter of time before Apple achieves comprehensive independent replacement at the chip level.
Is it really useful for Apple to spare no effort to hold the core technology in its hands? The answer is that it works, and it is very effective.
Since the A6 chip Apple established the supremacy of mobile chips, the excellent performance of Apple's A-series chips has always been one of the core competitiveness of the iPhone.
The deep connection between self-developed chips and operating systems has enabled Apple's iPhone, iPad, and MacBook to achieve a collaborative experience that is completely incomparable with the Android ecology and Windows ecology.
Self-developed technology is not fragrant, only if you eat it yourself.
Of course, Apple's doing this has also caused some concerns in the industry, if it really develops all key technologies, can Apple really play around? The R&D investment and talent demand behind this are massive, and for today's Apple, is it really worth the input and output of this?
Today's technology industry pays attention to supply chain cooperation, and it is impossible for one person to take it all, which is also objectively unattainable.
How Apple will deal with the relationship between self-research and self-manufacturing and supplier cooperation, the trade-off game in many aspects will still be very complicated. This also makes the future global technology industry supply chain pattern still have many variables.
From another point of view, represented by TSMC, the most critical advanced manufacturing links of chips have gradually shifted to the United States, and in the context of strengthening technical control in the United States, it may have become inevitable for American technology companies to increase their control over core technologies.
Conclusion: The fruit chain does not have a general who wins the victory
Whether it is chips, lenses or screens, it is an indisputable fact that Apple strengthens its control over core technologies, and in addition, Apple is also actively adjusting the regional layout of the supply chain, such as transferring some production lines outside the Chinese mainland to avoid potential risks.
Many of Apple's product advantages stem from its deep control of technology and supply chain, and in the context of the cooling of the consumer electronics market, Apple may be strengthening this advantage to give itself more confidence and investors more confidence.
From Luxshare Precision, OFILM, Goertek, Sunny to BOE, these mainland fruit chain companies with "stories" have always been talked about, and from their interpretation of the ups and downs of the fruit chain, we can read both the positive side and the crisis side.
In the game of the global technology industry, relying on others is always not the last word, although technological innovation is difficult, mastering core technology needs to face the obstruction of many overseas technology giants, but gritting your teeth and insisting seems to be the only way.
Today, even if it is as strong as Apple, the stock price is still often reaching new lows, the senior management team has been turbulent, and iPhone revenue has gradually weakened and frequently cut orders... In the current increasingly close industrial cooperation, no enterprise can survive independently from the supply chain system, and complex interest games and adjustments will inevitably always accompany.
Instead of rushing to button the hats of "winners" and "losers", let the bullets fly a little longer.