Sanan Optoelectronics supplies MiniLED chips to Samsung in batches

In response to investors' questions, Sanan Optoelectronics stated that the company is currently supplying MiniLED chips in bulk to Samsung, and some other customers are in the process of verification or supplying in small quantities.

It is understood that Sanan Optoelectronics signed an Advance Payment Agreement with Samsung Electronics in February 2018. According to the contract, Samsung Electronics will pay Sanan Optoelectronics a $16.83 million advance payment in exchange for the Xiamen Sanan production line to produce a certain number of LED chips for display products ("displays"). If Samsung Electronics' monthly order volume is likely to exceed the maximum number agreed in the agreement, the two parties will discuss the conditions for expansion in advance. Xiamen Sanan and Samsung Electronics will continue to discuss MicroLED strategic cooperation. When Xiamen Sanan reaches large-scale mass production capacity, Samsung Electronics will consider Xiamen Sanan as the primary supplier and negotiate a supply agreement acceptable to both parties.

Following Samsung Electronics, Sanan Optoelectronics signed a contract with TCL Huaxing in March this year to jointly establish a joint laboratory to develop Micro LED display technology. In addition, Sanan Optoelectronics announced in April last year that it would invest 12 billion yuan to build a Mini/Micro LED epitaxy and chip base in Gedian, Hubei.

In addition to MiniLED/MicroLED technology, Sanan Optoelectronics has also increased its layout in the field of compound semiconductors. In 2017, Sanan Optoelectronics invested 33.3 billion yuan in Quanzhou to build seven major industrial clusters, including R&D and manufacturing industrialization projects for high-end gallium nitride LED substrates, epitaxy, and chips; R&D and manufacturing industrialization projects for high-end gallium arsenide LED epitaxy and chips; R&D and manufacturing industrialization projects for high-power gallium nitride lasers; R&D and manufacturing industrialization projects for optical communication devices; R&D and manufacturing industrialization projects for radio frequency and filters; R&D and manufacturing industrialization projects for power semiconductors (power electronics); R&D and manufacturing industrialization projects for special substrate materials, and R&D and manufacturing industrialization projects for special packaging product applications.

Sanan Optoelectronics said that currently, the company's RF business products are used in 2G-5G mobile phone RF power amplifiers, WiFi, Internet of Things, routers, communication base station RF signal amplifiers and other market applications. The company's gallium arsenide RF has been shipped to more than 90 customers, covering domestic and foreign customer regions; important customers of gallium nitride RF products have achieved mass production, and production capacity is gradually increasing.

According to San'an Optoelectronics' 2019 annual report, San'an Integrated Circuit achieved sales revenue of 241 million yuan in 2019, a year-on-year increase of 40.67%. Some equipment of the Quanzhou San'an Semiconductor Industrialization Project has been installed, and production capacity will be gradually released after debugging. It is expected that the compound semiconductor business will make a strong contribution to San'an's revenue in 2020.