The love triangle between Micro LED, LCD and OLED

According to incomplete statistics from LED inside, from the beginning of 2019 to May 2020, the total amount of projects in mainland China with Mini/Micro LED as the investment direction has reached 22.08 billion yuan.

With the news that Apple uses Mini LED screens on iPods and Samsung will launch home Micro LED TVs in September this year, the domestic Micro LED craze continues to heat up. According to incomplete statistics from LED inside, from the beginning of 2019 to May 2020, the total amount of investment in Mini/Micro LED projects in mainland China has reached 22.08 billion yuan.

Mini LED can be used as a backlight to help LCD (liquid crystal) improve its performance and compete with OLED. In the future, it can also be used for direct display to pave the way for Micro LED and challenge LCD and OLED. At the same time, LCD continues to iterate technology in 8K display and high refresh rate to extend the life of the industry. OLED is still a hot topic this year. In the future, Mini LED will have both "threats" and promotions with LCD and OLED, and the industry's "triangular relationship" will become more and more significant.

LED industry advances towards Mini/Micro LED

After reviewing the latest trends of domestic A-share LED listed companies, we found that almost all leading enterprises in China's LED industry chain, from chips, packaging to display, are moving towards Mini/Micro LED. They continue to increase their investment in R&D and manufacturing through private placement, joint ventures, investment and expansion, etc. Mini/Micro LED has become the engine of a new round of development of China's LED industry.

According to Yole data, Mini/Micro LED is expected to be introduced into 3.24 million products in 2019, including monitors, TVs, smartphones, etc.

LED chip companies such as Sanan Optoelectronics, HC Semitek, and Jucan Optoelectronics all plan to invest in expanding production through private placements this year to seize the opportunities of LED in the next generation of new display fields.

For example, Sanan Optoelectronics plans to raise no more than 7 billion yuan for the semiconductor R&D and industrialization project (Phase I), with a total investment of 13.8 billion yuan. It will produce 7.692 million gallium nitride LED chips annually, including 1.616 million Mini LED backlight and Micro LED display chips; and 1.232 million gallium arsenide LED chips annually, including 176,000 Mini/Micro LED chips. Sanan Optoelectronics is one of Samsung Electronics' important Mini/Micro LED chip suppliers, and this year it also established a Micro LED joint laboratory with TCL Technology.

HC Semitek will raise no more than 1.5 billion yuan, of which 1.2 billion yuan will be invested in Mini/Micro LED research and development and manufacturing projects. After three years of construction, it will achieve an annual output of 950,000 4-inch Mini/Micro LED epitaxial wafers.

Jucan Optoelectronics also plans to raise no more than 1 billion yuan for the expansion and upgrade of high-efficiency LED chip projects, and believes that new display applications centered on Mini/Micro LED will become the main driving force for a new round of growth in LED chips.

Not only LED chip companies, but also LED packaging companies such as Nationstar Optoelectronics, Shenzhen MTC, and Ruifeng Optoelectronics, as well as LED display companies such as Leyard, Auto Electronics, and Leman Optoelectronics, have increased their investment and expanded production in the Mini/Micro LED field.

LED inside predicts that the global Mini LED market will grow rapidly from US$78 million in 2018 to US$1.175 billion in 2024. Gaogong Industry Research Institute (GGII) predicts that the global Micro LED market is expected to reach 8.07 billion yuan by 2022. Yole predicts that the shipment volume of the Micro LED display market will reach 330 million pieces by 2025.

The industry believes that only LED displays with a pitch of less than 0.1 mm can be called Micro LED. Zhang Xiaofei, chairman of Gaogong Industry Research, told the First Financial reporter that more investment is now being placed on Mini LED backlight and Mini LED display. Everyone is also investing in Micro LED in steps, but sales are very small, and it still needs to overcome mass transfer technology before large-scale commercialization. True industrialization may not be until 2022.

Zhang Wenda, senior director of the Semiconductor Industry Association (SEMI), believes that the next generation of display panels, Micro LED, are flexible and transparent. As the industry matures, it is expected to enter the high-end mobile phone market in 2024 and the mass-market mobile phone market in 2026. Currently, an LCD mobile phone screen costs about $20, while a Micro LED mobile phone screen costs about $300, and the cost needs to be significantly reduced.

Micro LED also has promising prospects in automotive displays and AR/VR displays, but it will be expensive to use in TVs and tablets.

Mini LED backlight helps LCD compete with OLED

The layout of Mini/Micro LED is the layout of the future, so to what extent can it shake up the industry landscape at present?

As Micro LED technology matures and replaces LCD in the future, it will first use transitional technology Mini LED backlight to help LCD compete with OLED. After all, the current mainstream LCD panels have fallen into the dilemma of overcapacity and falling prices. The global display industry needs new technologies to drive the industry to increase added value and profitability.

In the view of Geng Yi, executive vice secretary-general of the China OLED Industry Alliance, there are three highlights in the OLED industry this year: First, foldable screen mobile phones using flexible OLED panels are very popular. Samsung has launched three products in a row. The sales of foldable screen mobile phones will increase significantly this year. Second, Korean companies are accelerating their withdrawal from the LCD field. Samsung will invest tens of billions of dollars in QDOLED and intends to compete with LGD in the field of large-size OLED. Third, investment in silicon-based OLED is hot. BOE, Visionox, Xiaomi and others have invested in layout.

Recently, OLED has made new progress in both upstream panels and downstream applications. In the upstream field, on May 20, the main body of Visionox's Hefei 6th generation flexible AMOLED production line was capped and the equipment entered the debugging stage. It is expected to be put into trial production at the end of the year. After reaching full production, the project can produce 28 million screens of various types annually. In the downstream field, Huawei and Xiaomi also launched OLED TVs this year, and the brand camp of OLED TVs continues to expand.

Mainland China has become the world's largest LCD display panel production base. South Korean companies Samsung and LG are accelerating their transformation to the OLED field to seize new commanding heights. Not wanting to lag behind, mainland China's display companies continue to expand production of small-size flexible OLEDs. BOE Chongqing, Visionox Hefei, TCL Huaxing Wuhan, Shenzhen Tianma Xiamen and many other 6th generation flexible OLED panel lines are under construction. In the field of large-size OLEDs, BOE and TCL Huaxing are both developing printed OLEDs, hoping to find a new path outside of South Korean companies.

As the leading display industry in mainland China, BOE, TCL Huaxing, and Shenzhen Tianma are "eating from the bowl, watching from the plate, and planting in the field". LCD panels are "in the bowl", which is the largest source of revenue and profit; OLED panels are "in the plate", and they are constantly increasing investment in small-size flexible OLED panel production lines and developing large-size printed OLED panels; Micro LED is "in the field".

While planning for the future, manufacturers are also considering how to extend the industrial life of LCD panels. Liu Jingang, deputy general manager of TV SBU of BOE Display and Sensor Devices Business Group, said in March this year that 8K display, Mini LED backlight, dual-core (dual screen), 120Hz, full screen, and ultra-large size (65 inches and above) will be the development direction of large-size LCD panels this year. In addition to TVs, commercial displays will also be developed, such as 110-inch cloud conference systems.

With the advent of the 5G communication era, the instantaneous transmission of massive amounts of data will become a reality in the future, and the demand for large, portable, and mobile display screens will increase greatly. Displays will be everywhere in the future. Therefore, after the foldable screen mobile phone attracted attention, foldable screen laptops have also appeared. In the future, TVs can also be rolled up and portable, so self-luminous and flexible display OLED will gradually replace LCD in special application scenarios. Micro LED is also self-luminous, can achieve flexible display, and can be spliced ​​into any shape. It has lower power consumption and longer life than OLED, but the degree of industrialization is lower than OLED. In contrast, LCD still has the advantages of sufficient supply, low price, and wide application due to its huge industrial chain. The "triangular relationship" between Mini LED, LCD, and OLED is becoming closer and closer.