Apple's adoption of miniLED panels will lead to a price war for OLED panels

Well-known Apple analyst Ming-Chi Kuo released a report predicting that Apple may adopt miniLED panels in large-screen products such as iPad and MAC. This is not good news for the rapidly popularizing OLED panel industry, and may accelerate the OLED panel industry into the price war stage.

　　Problems facing OLED panels

　　In the smartphone market, OLED panels account for more than 50% of the market, and the proportion is increasing rapidly; in the high-end TV market, OLED TVs account for more than half of the market. As most TV companies in the world invest in the OLED panel camp led by LGD, the start of production of LGD's 8.5-generation OLED panel production line in Guangzhou will further increase the production capacity of OLED panels, which will help promote OLED TVs in the TV market.

　　However, although OLED panels are increasingly accepted by the smartphone and TV industries, the technical defects they face have not been resolved, that is, the screen burn-in problem. This is because the lifespans of their three luminous materials are different. Since the service life of smartphones is generally around 2 years, the impact of screen burn-in on mobile phones is not very obvious. However, for the TV industry, since the service life of TVs is more than ten years, the impact is quite obvious.

　　Although the OLED industry is in a high growth stage, a trend of price war has emerged. In the market of small and medium-sized OLED panels used in digital products such as smart phones, the two major panel companies in mainland China, BOE and Huaxing Optoelectronics, are accelerating the expansion of their OLED panel production capacity. In addition, there are also small and medium-sized OLED panel manufacturers such as Hehui Optoelectronics and Visionox. As the OLED panel production lines of these panel companies are put into production one after another, OLED panel production capacity will be oversupplied.

　　The large-size OLED panel market is currently in a stage of supply exceeding demand. This is because LGD is the only company in the world that produces large-size OLED panels, and its production capacity is relatively limited. However, due to the problem of screen burn-in, the promotion of OLED TVs has always been difficult. In addition, two Chinese TV companies, Hisense and Konka, have joined the OLED TV camp and have also begun to cooperate with Taiwan's panel companies to promote miniLED TVs. This move will be a major blow to OLED TVs.

　　OLED panels may be caught in a price war

　　Previously, in order to meet Apple's demand for small and medium-sized OLED panels, Samsung significantly expanded the production capacity of small and medium-sized OLED panels. Later, the sales of the previous generation of products iPhoneX and the new generation iPhoneXS and iPhoneXS MAX that used OLED panels did not meet expectations, resulting in overcapacity of OLED panels. Samsung had to promote its OLED panels to mainland Chinese mobile phone companies and even offer price discounts.

　　With the OLED panel production lines of China's two major panel companies, BOE and CSOT, coming into operation, overcapacity of small and medium-sized OLED panels is bound to occur. It is inevitable that small and medium-sized OLED panels will be caught in a price war. Samsung, which has production capacity and technological advantages, has basically completed its production line discounts. Moreover, Samsung, which has a huge production capacity advantage, is bound to join this price war. China's OLED panel companies will bear the dual pressure of production line depreciation and price decline.

　　Panel companies in Taiwan have realized that they are unable to compete with panel companies in mainland China and South Korea in the OLED panel market. Panel companies in mainland China have financial and cost advantages, while South Korean panel companies have technical and production capacity advantages. However, the development of the more advanced microLED technology faces insurmountable technical difficulties and cost issues. Therefore, they chose to develop miniLED first. They originally developed miniLED for large-size display products. Now Apple's introduction of miniLED on iPad and MAC is undoubtedly a great success for them.

　　For large-size OLED panels, Apple's introduction of miniLED panels will also create price pressure. Due to Apple's important influence on the industry, miniLED is likely to expand rapidly in the PC industry, which will block the development path of OLED panels to the PC industry. The popularity of miniLED in the PC market will have a positive impact on companies such as Hisense and Konka that promote miniLED TVs, and then affect the TV industry. In this way, LGD will inevitably lower the price of OLED panels, which is undoubtedly a major blow to its OLED panel business, which has been in the red for nearly a decade.

　　In addition to Apple and Chinese mainland TV companies planning to introduce miniLED panels, mobile phone companies Huawei and Xiaomi are also interested in adopting miniLED panels. This is because they hope to get rid of the current dilemma of being controlled by Samsung in the small and medium-sized OLED panel market. However, Samsung obviously has a backup plan. It is accelerating the development of microLED panel technology and has launched microLED TVs for the home market.

　　Boying Technology believes that due to the high cost and technical advantages of microLED, it is more suitable to be promoted in the smartphone market first. Samsung's current promotion of microLED in the TV market should only be a stopgap measure. It does not want microLED to erode the small and medium-sized OLED panel business that currently brings it a lot of profits. However, with Apple introducing miniLED in PCs and Huawei and Xiaomi in smartphones, Samsung will soon promote microLED in the smartphone market, allowing microLED to replace OLED and become its important source of profit. The miniLED promoted by Taiwan's panel companies will have a place in the TV and PC markets.

　　As OLED panel production capacity continues to expand, miniLED and microLED begin to enter the market and are expected to replace OLED. This will force OLED panels, which are currently in a rapid development stage, to enter a price war prematurely. This is obviously not good news for OLED panel companies in mainland China. The huge capital investment may result in losses before they can reap returns.