BOE is going to set up a dedicated OLED production line for Apple?

Source: This article is contributed by HuShuo, thank you.

Since the beginning of this year, there have been constant reports that BOE is going to enter the Apple mobile phone OLED supply chain. Yesterday, Korean media etnews broke the latest news.

The report pointed out that BOE's senior executives recently visited Apple headquarters and told the relevant person in charge that they plan to turn the B11 production line in Sichuan and the B12 line under planning into dedicated production lines for Apple mobile phone OLED. Among them, 70% of the production capacity of the B11 plant will be invested in the production of flexible OLED, and the remaining 30% will be used to produce foldable panels; and in B12, the share of flexible OLED and foldable panels will each account for 50%, the report further pointed out.

When I consulted with relevant people from BOE, I did not get a confirmed response. However, after communicating with many people in the industry, I got the following speculation:

It is an established fact that BOE has received support from Apple. The idea of ​​domestic independent and controllable development and the high probability of choice by smartphone OEM manufacturers are also extremely beneficial to BOE's future development. What concerns the author and many readers is whether BOE's technological progress is really that fast? We will talk about this issue later. Let's first look at BOE's determination to invest in OLED.

According to public information, BOE first invested in OLED technology research and development at its B6 plant in Ordos, but did not make much progress in the early years. After B7, it invested a lot of money and recruited many Korean talents, raising the overall OLED technology level to a higher level.

Last year, BOE signed a contract for a sixth-generation flexible AMOLED production line B11 with an investment of RMB 46.5 billion. The press release at the time showed that the factory was designed to produce 48K glass substrates per month for the production of new mobile display products. The project was scheduled to start construction in December 2016 and officially go into production in 2019.

In July this year, Taiwan media Digitimes reported that BOE's B11 factory was evaluating the introduction of Canon Tokki's evaporation equipment; and in September, BOE's AMOLED process technology test center project completed the main structure capping 10 days ahead of schedule. Therefore, the progress of the entire project is in line with expectations.

As for the B12 factory, there is not much confirmed information at present. However, according to people familiar with the matter, the 10.5-generation LCD line that BOE invested 46 billion yuan to build in Wuhan East Lake Development Zone is actually B12.

According to the author's understanding, BOE's OLED production line is basically configured according to Samsung's production line. Even the relevant important technical talents are directly poached from Samsung. Judging from the attitude, this is unquestionable.

Back to the rumors at the beginning of the article, some foreign experts said that at present, BOE only has B7 plant (from the communication with domestic industry insiders, we know that B7 plant is mainly for domestic manufacturers.) The technical support is comparable to that of Samsung, and the government is also investing heavily in support. For BOE, it is no problem to be far ahead of Japan, and it is only a matter of time to catch up with South Korea. But from the current point of view, it may still lack some heat.

Take Samsung as an example. They have been planning for OLED very early and have accumulated enough experience in mass production and process optimization in the past few years. Their understanding of production line equipment is much stronger than that of other companies, including LG. The simplest example is that Samsung can achieve twice the production capacity of others by buying a set of Canon Tokki vapor deposition machines, relevant sources pointed out. But at present, BOE does not have as deep accumulation as Samsung, which will be a constraint on their development. At present, the Samsung OLED screen used in the iPhone X still has many problems, and BOE should still have a long way to go.

In summary, the Korean media's details about the cooperation between BOE and Apple are incorrect. However, according to the author's understanding from relevant sources, Apple's support for BOE's OLED screen construction is a matter of course. Under the current situation where Samsung monopolizes AMOLED supply, Apple's idea is self-evident.

After the release of iPhone X, the 10th anniversary edition of Apple, the global smartphone market has officially entered a new stage of AMOLED screens. TrendForce predicts that by 2020, 43% of the world's smartphones will be equipped with smart AMOLED screens. The OLED display market has officially exploded.

According to a survey report released recently by the Japanese research institution Yano Research Institute, the number of OLED panels used in terminals including mobile phones, TVs and smart phones will increase by 12.3% year-on-year to 473.8 million pieces in 2017. As Apple continues to adopt OLED panels, they believe that by next year, global OLED panel shipments will increase by 34.1% to 635.5 million pieces.

According to market analysis firm IHS Markit, global shipments of AMOLED, including RGB OLED (for smartphones) and WOLED (for TVs), will increase from 11.9 million square meters in 2017 to 50.1 million square meters by 2022, a growth rate of 320%. RGB OLED shipments will increase from 8.9 million square meters to 31.9 million, while WOLED shipments will surge from 3 million square meters to 18.2 million square meters in 2022.

The huge shipment volume has created a market size of tens of billions of dollars for AMOLED, which has attracted many manufacturers such as Samsung, LG, JDI, Sharp, BOE, Tianma and CSOT to step up their layout in this market, among which Samsung is undoubtedly the absolute king.

According to IHS data, Samsung's RBG OLED panel shipments this year reached 7.7 million square meters, accounting for 86.5% of this year's total shipments. By 2022, Samsung's RGB OLED shipments will grow to 16.6 million square meters, which also brought good revenue to Samsung.

Samsung Q3 revenue

In addition to Samsung, LG can be said to be an important player. Apple previously invested $2.7 billion in LG, and Google is also reported to have invested in LG. The idea of ​​both is to support LG's mobile phone OLED screen, become a challenger to Samsung, and open up another supply chain. However, according to foreign media reports, LG's screen quality is poor, and Apple has lost confidence in it.

Considering the current status of OLEDs of manufacturers such as JDI, Sharp, Tianma and CSOT, this may be the best time for BOE.

Although the opportunity is in front of us, BOE still faces great technical challenges in the future.

First, from a technical perspective, BOE needs to overcome the embarrassing situation of being controlled by others in terms of upstream core equipment and materials, especially evaporation equipment and luminescent materials, which will restrict the development of the mainland OLED industry to a certain extent.

According to data from Essence Securities, the production of OLED terminal materials is currently concentrated in the hands of manufacturers in South Korea, Japan, Germany and the United States. The core of sublimation materials is patents. For example, Japan has more than 2,000 patents. Samsung has acquired many patents. Small companies that do not agree to sell patents will find it difficult to become Samsung's material supplier.

The accumulation of domestic material manufacturers is still far behind that of the above countries. For example, Xi'an Ruilian currently has patents on some small varieties, which are aimed at domestic panel manufacturers, but it is still based on imitation, and most patents are still concentrated in the hands of the United States, Japan, Germany, and South Korea. Taking the United States UDC as an example, its revenue from fluorescent materials in 2015 was more than 60 million US dollars, of which more than 35 million US dollars came from patent licensing, and 28 million US dollars was the actual sales of materials revenue, Essence Securities further pointed out.

Secondly, from the perspective of competitors, Samsung's continued progress puts greater pressure on BOE to grab Apple orders.

According to an article in MIT Technology Review, Samsung has actively introduced DPSS technology and used laser lift-off (LLO) equipment to reduce the complexity of production line processes and reduce costs. The company's LLO originally used excimer laser technology, with AP System as the only supplier. Now, most LLO equipment uses diode pumped solid-state (DPSS) technology, and Philoptics has been added to the list of suppliers.

The article states that the benefits of DPSS are lower costs and easier maintenance. Moreover, after switching to DPSS, the number of equipment required for each production line will also be reduced. Therefore, overall, Samsung, which already has a cost advantage, can further expand its lead.

In the past, Samsung purchased laser lift-off equipment from AP System, but since 2017, it has switched to Philoptics. AP System had no choice but to assist Chinese manufacturers in developing OLED-related technologies to increase its own market space. Although Chinese manufacturers have apparently benefited from this and have the opportunity to break through technical bottlenecks, in terms of cost, it is likely that they will not be able to compete with Samsung in the short term.

Secondly, after mass production, how to maintain the competitive advantage over Samsung and other manufacturers in terms of price?

How to solve the problems of yield, capacity expansion and cost has become an issue that BOE needs to focus on.

For the domestic OLED industry, there is still a long way to go!

Today is the 1471st issue of content shared by "Semiconductor Industry Observer" for you, welcome to follow.

Follow the WeChat public account Semiconductor Industry Observation , reply to the keyword in the background to get more content

Reply Popular Science , read more popular science articles about the semiconductor industry

Reply to DRAM , read more DRAM articles

Reply Lithography , read more articles related to lithography technology

Reply Samsung , read more articles related to Samsung

Reply Full screen , read more articles related to full screen

Reply Dual camera , read more articles about dual cameras on mobile phones

Reply Millimeter wave , see more articles related to millimeter wave

Reply to IPO to see more articles related to semiconductor company IPOs

Reply Exhibition , see "2017 Latest Semiconductor Exhibition and Conference Calendar"

Reply Submit your article and read "How to become a member of "Semiconductor Industry Observer""

Reply Search and you can easily find other articles that interest you!

Click to read the original text and join the Moore Elite