[New] The Reality of Micro LED Unveiled – Infinite Opportunities, Yet Initial Capacity Demand Remains Low


Ennostar, a Taiwanese group focusing on the R&D and manufacturing of Micro LED, LED and compound semiconductor, has announced on January 19th a NTD 670 million (roughly USD 21.36 million) sale of the planned Micro LED production facility in Zhunan, Taiwan.

Its subsidiary, EPISTAR, is anticipated to expedite Micro LED development by integrating existing resources in alternative locations.

According to TechNews’ report, Chin-Yung Fan, chairman of EPISTAR, anticipates “symbolic revenue” from Micro LED starting this year. He notes that in 2021, with the rise of Micro LED and Mini LED, existing facilities were insufficient. While planning to build new facilities based on customer demand and market predictions, the pandemic delayed many new technologies.

Following the integration of Ennostar’s factory resources, which are now available for EPISTAR’s use, the decision has been made to sell the Zhunan facility.

During an earnings call in 2023, Ennostar mentioned that the initial capacity demand for Micro LED is still low. Consequently, the company has slightly postponed its plans for new production capacity and will closely monitor the actual market demand.

Fan also emphasized that the volume of Micro LED will undoubtedly increase, and the significant symbolic revenue is expected around 2027, given the longer evaluation time for Micro LED in automotive applications.

However, the sale of Ennostar’s factory also highlights the delayed mass production of Micro LED. Currently, Micro LED is primarily used in large display products like TVs and small displays for smartwatches.

AUO, a Taiwanese company that specializes in optoelectronic solutions, commenced Micro LED production at the end of last year, supplying to high-end smartwatch clients, expected to achieve cost efficiency.

As for Samsung and LG, they view Micro LED TVs as a core market, aiming to enhance profitability through positioning them as high-end television options. At CES 2024, Samsung showcased a transparent Micro LED screen, reaffirming the potential of Micro LED as the next-generation display technology. However, due to the high unit price, mass adoption in the consumer market is currently limited.

Furthermore, despite being a key industry influencer, Apple has not yet integrated Micro LED into its product roadmap. Notably, the Vision Pro, currently available for pre-orders, opts for Micro OLED instead, signaling that the practical implementation of Micro LED in products may still be some time away.

Although it will take some time for mass production to ramp up, Taiwanese manufacturers are actively laying the groundwork for Micro LED technology. Major Micro LED manufacturers, such as PlayNitride, have signed production line construction contracts with EPISTAR and AUO.

EPISTAR has completed construction by the end of last year, while AUO is expected to have production capacity by the end of next year. Both AUO and Innolux, under the umbrella of the CarUX initiative, showcased Micro LED automotive technology at this year’s CES.

Innolux has also purchased a significant amount of transfer equipment from PlayNitride, further enhancing the completeness of the Taiwanese Micro LED supply chain.

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(Photo credit: AUO)

Please note that this article cites information from TechNews.


Ennostar may take the lead on Micro LED chips from the delayed of Apple Watch launches?

Apple’s plan to release the first Apple Watch with a Micro LED display in 2024 has reportedly been delayed until the second half of 2025 or later due to production challenges. However, this delay shows Apple’s cautious approach to technology and evaluation. This delay shows Apple’s prudence and assessment of technology, but it also brings new opportunities for Ennostar, which was previously considered only a second supplier

According to market research firm DSCC’s, the new Apple Watch will initially adopt Osram’s Micro LED chips, and Epistar(under Ennostar), will be responsible for shipping related components. However, some insiders have revealed that Osram’s technology produces Vertical Chips, which are different from Epistar’s technology and are unlikely to be used in the same project simultaneously.

Epistar’s current chip technology is Flip Chips, Ennostar has stated that American brands are currently collaborating with European suppliers, and Epistar “may have a chance” to be the second supplier, however, ‘the second supplier” may not have a chance to join the cast until 2026.

DSCC mentioned that Epistar is responsible for shipping related components, which differs from what Ennostar said “second supplier”. Technically speaking, Ennostar is more likely to be a “parallel competitor” to Osram since the process of Vertical Chips versus Flip Chips are not on the same technical base. From this perspective, obviously, Apple has dual strategies on Micro LED from adopting Osram’s Vertical Chips as the core and maintaining the technical connections with Taiwanese manufacturers at the same time, which Ennostar may have a shot to ramp up to the main supplier again to take off the “second source” label.

Does the Micro LED process hint at Apple’s product line planning?

Micro LED chips now are mainly categorized into Vertical, Lateral, and Flip chips. According to industry insiders, Osram began developing Micro LED in 2019 but only focused on vertical chips due to patent issues. Currently, only 3 companies in the world have patents for Vertical Chips, and Osram is likely to gain a competitive advantage in Micro LED through these patents. As a result, the company is targeting the development of watches, phones, and AR glasses, and has been collaborating with Apple on watch projects in Germany since 2019. The size of the watch chip produced in collaboration with Apple is approximately 8um.

Meanwhile, Osram announced in 2021 that it is expanding its LED factory in Kulim, Malaysia with an investment of approximately $850 million, and plans to produce Mini LED and Micro LED chips in its 8-inch factory, with mass production expected in 2024. The company also mentioned last year that it plans to produce small-sized products by 2024, and this small-sized product is very likely to be Apple’s Apple Watch.

As for companies such as PlayNitride, Epistar, and Chinese manufacturers that are working on Micro LED technology, they are all using flip chips. PlayNitride stated that they have the opportunity to produce Lateral Chips as client’s request, and Vertical Chips may be produced for AR and VR in the future. “It still depends on the customer’s application to determine what kind of chips matches their products, e.g. Vertical Chips can bring higher PPI with a smaller size of chips.” PlayNitirde said.

Due to differences in the position of electrodes among Vertical chips, Lateral chips, and Flip Chips, give their own pros and cons in each production process. The advantage of Vertical Chips is that they can be made smaller, and the yield rate is higher as the size gets smaller. However, it is difficult to test and repair them once all the Micro LEDs are arranged and connected for testing, so the yield rate may decrease during the bonding process.

Vertical Chips are now suitable for use in the fields of watches, smartphones, and AR glasses, while Lateral Chips are used for other applications like automotive or large displays. However, AUO plans to produce Micro LED watches using Flip Chips, showing that different technologies can still be applied to similar products. In the future, using Vertical Chips may be necessary for developing AR glasses, which may explain why Apple is using this technology in its Apple Watch.

With the dawn of the era of Micro LED mass production, what will be Apple’s strategy?

Apple’s influence in display technology development affects other brands’ adoption attitudes. To reduce risks, Apple is not taking sides as different technologies and processes are involved, which may pose challenges to transfer technology or backplane technology, affecting the entire Micro LED supply chain. For the next generation Apple Watch, Apple is mainly working with Osram for Vertical MicroLED Chips, but may also collaborate with Taiwanese companies on Lateral or Flip Chips in the future.(Image credit: TechNews)


Annual Shipment of AirPods Expected to Reach 85 Million Sets, with Component Suppliers Epistar, DOWA, II-VI/Finisar Set to Benefit, Says TrendForce

Apple’s latest AirPods 3 still feature an optical in-ear detection mechanism, according to TrendForce’s 2021 Infrared Sensing Market Trend – 3D Sensing, LiDAR, SWIR LED report. Through the integration of PPG (photoplethysmography) technology, the AirPods 3 contain an improved in-ear detection mechanism based on skin-detect sensors that are equipped with four SWIR (short-wave infrared) LED chips that have two different wavelengths, as well as two InGaAs photodiodes. Industry insiders indicate that the AirPods 3’s skin-detect sensors may potentially detect the water content in the wearer’s skin, giving them the ability to differentiate between human skin and other surfaces. TrendForce expects annual AirPods shipment for 2022 to reach 85 million sets, a 3.7% YoY increase.

While the demand for these end-products rises, the relevant suppliers will stand to benefit as a result. Such companies include SWIR LED chip suppliers Epistar and DOWA; InGaAs photodiode suppliers DOWA and II-VI/Finisar; and module assembler USI.

SWIR wavelengths range from 1,050-2,500 nm, which encompasses the optical properties of compounds such as water, sugar, and alcohol. While SWIR technologies gradually mature, and prices begin to reach feasible levels, wearables manufacturers are expected to officially integrate SWIR technologies into their products in 2H21. With improvements in their algorithm, wearables are increasingly likely to feature PPG-based biosensing functions, which can measure not only heart rate and blood oxygen levels, but also other variables including body hydration as well as blood glucose, blood lipid, and blood alcohol levels in the future.

For more information on reports and market data from TrendForce’s Department of Optoelectronics Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com


Mini LED Chip Revenue Likely to Reach US$270 Million in 2021 as Battle Over Mini LED Backlight TV Specs Takes Place, Says TrendForce


As various TV manufacturers such as Samsung, LG, and TCL announced their new models equipped with Mini LED backlights at CES 2021, TrendForce’s 2021 Mini LED New Backlight Display Trend Analysis report shows that total Mini LED chip revenue from Mini LED backlight TVs to potentially reach US$270 million in 2021, as manufacturers gradually overcome technological bottlenecks and lower their overall manufacturing costs, according to TrendForce’s latest investigations.

Mini LED backlight TVs possess a highly cost-effective competitive advantage, as Mini LED backlight costs for the entry-level segment are only 50% higher than traditional LCD equivalents

TrendForce further indicates that, with regards to TV backlight technologies, the cost of Mini LED solutions is about two to three times lower than that of white OLED and entry-level, direct-lit LCD solutions. This cost difference therefore serves as Mini LED technology’s competitive advantage over its competitors in display backlight adoption. At the moment, high-end TVs contain about 16,000 Mini LED chips per TV, divided into 2,000 local dimming zones.

In this market segment, PM (passive matrix) Mini LED TV panels with BLU (backlight unit) still cost about 15% less than OLED TV panels and therefore hold a cost advantage. On the other hand, in the mid-range TV segment, each TV contains about 10,000-12,000 Mini LED chips and 500 local dimming zones, meaning the cost of Mini LED backlight integration in this market segment is about a mere 50% more than entry-level, direct-lit LCD backlight units, making Mini LED a viable alternative to traditional LCD solutions in this segment too. Given the high cost-effectiveness of Mini LED backlight units, TV manufacturers are therefore likely to adopt them as a viable technology and initiate an industry-wide competition over Mini LED TV specs this year.

HDR and 8K resolution will be the two mainstream features of high-end TVs this year. With regards to Korean brands, Samsung’s Neo QLED Mini LED TV and LG’s QNED Mini LED TV, both unveiled at CES this year, are equipped with Mini LED backlights as a performance-enhancing technical feature. These TVs feature not only 8K resolution, but also Mini LED backlight units, which require more than 20,000 Mini LED chips (divided across more than 1,000 local dimming zones, with more than 1,000 nits in peak brightness), in addition to passive matrix FALD technology, which allows for contrast ratios of 1,000,000:1, a significant improvement that puts these TVs on almost equal footing with OLED TVs in terms of image quality. At the same time, China-based TCL is also set to release its OD Zero Mini LED TV, which has comparable specs with Korean offerings and is also equipped with Mini LED backlight units. Going forward, more and more TV manufacturers, such as Hisense and Xiaomi, are expected to participate in the burgeoning Mini LED backlight TV market.

The pace of optimizing Mini LED chips, backplanes, and driver ICs will be key to the Mini LED industry’s rapid expansion

As various manufacturers successively release their Mini LED backlight TVs this year, related companies in the supply chain are expected to benefit as a result. Currently, there are multiple major suppliers of Mini LED components on the market: Chip suppliers include Taiwanese (Epistar and Lextar), Chinese (San’an and HC SemiTek), and Korean (Seoul Semiconductor) companies. Testing and sorting companies include FitTech, Saultech, and YTEC. SMT companies include Taiwan-based Lextar and China-based Hongli Zhihui. Driver IC suppliers include Taiwanese (Macroblock, Elan, Parade, Himax, and Novatek) and Chinese (Chipone) companies. Backplane suppliers include Tawanese (Apex and Zhen Ding Tech) and Korean (Young Poong Group) companies. Panel suppliers include SDC, LGD, AUO, Innolux, BOE, and CSOT.

TrendForce believes that Mini LED backlight displays currently possess a competitive advantage over OLED displays due to the former’s 15% comparatively lower cost. Ultimately, the future development and profitability of the Mini LED backlight market in the long run will depend on the continued optimization of components that account for a relatively higher allocation of backlight costs, including Mini LED chips, Mini LED backplanes, and driver ICs.

For more information on reports and market data from TrendForce’s Department of Optoelectronics Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com

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