Per Korean media theElec on August 19, Samsung Electronics is considering outsourcing part of its Micro LED display production to a third party including China-based MTC.

According to industry sources cited by Korean media, Samsung is currently evaluating the possibility of outsourcing production due to cost considerations, particularly for the low-end Micro LED display targeting markets like India and the Middle East.

Industry sources further reveal that the proportion of outsourced orders is expected to account for 20-30% of Samsung’s total Micro LED display products.

It’s reported that Samsung mainly provides Micro LED display for residential and commercial applications. In TV market, Samsung purchased Micro LED chips from San’an and PlayNitride.

After these chips are placed on substrate, transferred and packaged, Samsung directly handles other processes. For low-end products, the majority of current Micro LED production is done by itself, with only a small portion outsourced.

Technically, Samsung’s latest Micro LED TV uses LTPS TFT (Low-Temperature Polycrystalline Silicon Thin-Film Transistor) technology, while its commercial Micro LED display is still based on PCB technology.

The report suggested that if Samsung outsources the production of commercial Micro LED modules to manufacturers like MTC, they would assemble them for Samsung using PCBA (Printed Circuit Board Assembly) methods.

Given that companies like MTC in China have improved their Micro LED module technology, Samsung believes there is no significant difference between outsourcing production and completing the related module processes in-house.

Moreover, it could reduce production cost. If cooperates with MTC, Samsung expects Micro LED production cost to potentially decrease by 5-10%.

Besides cost reduction, Korean media point out that Samsung’s consideration of outsourcing low-end product production could allow it to focus on Micro LED module bonding and seamless technology, which are closely related to semiconductor manufacturing processes.

Industry sources highlight that the bonding and seamless technology of Micro LED modules are more critical, as these processes determine the final quality of Micro LED, despite the highly overlapping supply chains of Micro LED chips among manufacturers.

In fact, Samsung’s plan to reduce Micro LED cost has long been an open secret within the industry. As per Korean media reports in July, Samsung has already initiated its cost reduction plan and is currently working with relevant partners to push this project forward.

However, it’s worth noting that the potential partner mentioned by Korean media is BMTC. According to information from LEDinside, MTC’s LED business includes two downstream subsidiaries: VMTC and BMTC.

The former focuses on COB fine-pitch display business, while the latter on SMD LED packaging, backlighting, and lighting. If Samsung were to collaborate with MTC on Micro LED manufacturing, the corresponding products would theoretically be VMTC’s COB modules.

Currently, no official confirmation is disclosed, and the actual situation remains to be verified.

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(Photo credit: Samsung)

Following Apple’s cancellation of the Micro LED watch project, the associated supply chain has been further impacted. According to a report from TechNews citing MicroLED-Info, the latest one is KLA Corporation, which has announced a complete exit from the flat panel display (FPD) equipment business.

KLA recently announced its complete withdrawal from the FPD market. The company, which acquired Israeli automated optical inspection (AOI) system supplier Orbotech for USD 3.4 billion, had entered the Micro LED market opportunistically through this acquisition, as Orbotech is a developer of inspection equipment for the semiconductor and display industries.

Due to slowdowns in investment and demand in the consumer electronics market, Orbotech’s performance has been lackluster in recent quarters, with the entire division accounting for only about 3% of KLA’s revenue, totaling USD 283 million in 2023, a decline of 48%. As per the same report, it’s believed that KLA’s decision to shut down this division is linked to the cancellation of a major project with a key customer, likely Apple.

As FPD is one of Orbotech’s main divisions, with KLA announcing its withdrawal from the FPD market, more than 100 employees from this division will face layoffs. KLA stated that exiting the FPD equipment business will not impact the company’s revenue expectations for this quarter, which are projected to be USD 2.3 billion with a variance of plus or minus USD 12.5 million.

Apple’s decision in March to cancel the Micro LED watch project sent shockwaves through the display industry and Micro LED developers.

German LED giant Osram is still considering its next steps, with expected losses of USD 650-900 million; electronic assembly solutions provider Kulicke & Soffa also announced losses of USD 110-130 million due to the cancellation of its collaboration with Apple. Additionally, LG Display’s Micro LED development team within the Strategic Customer (SC) department has started downsizing.

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(Photo credit: Apple)

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)

Within the AR glasses industry, various enterprises have recently concluded the latest round of financing, encompassing AR glasses, AR display modules, and optical wave devices.

Chinese AR glasses firm Rokid secured USD 112 million fund

According to news on November 20th, Chinese AR glasses firm Rokid achieved a valuation of USD 1 billion and secured a financing of USD 112 million. The funds will be directed towards the expansion of Rokid’s presence in international markets.

Established in 2014 and headquartered in Hangzhou, China, Rokid introduced its latest AR smart glasses products, Rokid Max and Rokid Max Pro, in March and August of this year, respectively, featuring Micro OLED displays.

(Image: Rokid)

Presently, Rokid’s AR glasses are available in over 80 countries and regions worldwide. Rokid has planned to explore the application of AR glasses in the education sector, with an anticipation that its overseas revenue will surpass domestic revenue by 2024.

Notably, Rokid has successfully completed multiple rounds of financing in recent years, accumulating a total of nearly USD 2 billion, according to relevant media reports.

Japanese AR optical firm Cellid completes latest funding round.

Cellid announced that it received an investment from SMBC Nikko Securities in October, and combined with the undisclosed investor in September, the total financing for Cellid reached JPY 2.28 billion (approximately USD 15.25 million).

The funds from this financing round will be allocated for the establishment of mass production and quality control systems, expediting process development, and advancing the research and sales of software such as Model Builder.

(Image: Cellid )

Founded in 2016, Cellid focuses on the development and provision of AR display module hardware and spatial recognition technology software, Model Builder. The company aims to achieve higher-quality AR glasses by addressing both hardware and software components.

In 2021, Cellid initiated the supply of samples for AR glasses display modules, Cellid Waveguide 60, featuring a wider field of view optical (FOV) waveguide and a 1.2 cc size ultra-compact Micro LED projector.

In January this year, Cellid unveiled an optical module for AR glasses, equipped with a Micro LED projector, achieving a field of view of 60 degrees.

AR optical wave device company Raypai secures tens of millions in CNY Funding.

AR optical wave device company Raypai concluded a B-round financing of tens of millions of Chinese Yuan on November 21st. This round of financing was led by CVYE, VDL, and ABCI.

Raypai, known for its self-developed geometric optical waveguide technology and 2D pupil dilation technology, enables optical waveguide devices to maintain excellent optical performance while adopting a compact and lightweight form. This provides a foundation for deeply immersive, highly interactive, and highly integrated AR smart glasses.

(Image: Raypai)

Currently, Raypai has introduced over ten AR geometric optical waveguide display devices, applied in various AR smart terminal products, including QIDI ONE, RokidGLASS2, and Vision Enjoy G510.

Recently, Raypai unveiled its latest 2D geometric optical waveguide product, achieving a breakthrough in the field of view beyond 50 degrees and light efficiency exceeding 2000 nit/lm. The company has collaborated with well-known Chinese enterprises to develop consumer AR geometric optical waveguide devices for new products.

In terms of production, Raypai has completed the construction of a super-precision optical device production base in Kunshan, Jiangsu, achieving full operational status and mass delivery of the entire product line, with an annual production capacity of 120,000 sets of optical waveguide devices. Presently, based on customer demand and market trends, Raypai is planning more extensive production capacity reserves.
(Image: Rokid)

According to TechNews, AUO held a board meeting and signed a contract with PlayNitride on October 31st. The deal entails PlayNitride assisting AUO in setting up a cutting-edge 6-inch Micro LED Chip on Carrier (CoC) production line at AUO’s Longtan Tech Park facility, offering an all-in-one solution. The contract is valued at a substantial 700 million NT dollars, with a duration of 30 months.

The CoC production line is a pivotal part of Micro LED manufacturing, and AUO emphasizes that this contract is distinct from the one they have with Ennostar.

AUO highlights that their partnership with PlayNitride in establishing the CoC production line not only puts them in control of the most vital raw materials for Micro LED but also enables them to bring CoC to Micro LED module production in-house. This strategic move is expected to significantly enhance production efficiency, increase yield rates, and bolster AUO’s competitiveness in terms of Micro LED product costs. This, in turn, accelerates the timeline for the mass commercialization of Micro LED.

AUO’s involvement in Micro LED research dates back to 2012, resulting in expertise in display technology and manufacturing processes. In the display industry, they’ve been integrating the supply chain and establishing a comprehensive Micro LED ecosystem, gradually working toward the goal of commercialization during the year of mass production for Micro LED. AUO has big plans for applying Micro LED display technology across various fields.

Addressing concerns about technology transfer, PlayNitride clarifies that technology transfer primarily pertains to well-established product technologies, carried out incrementally with different firms. At the same time, PlayNitride is committed to developing new processes and products, and with patent protection in place and specific company considerations, there’s currently no need to fret about any technology leakage.
In August this year, TrendForce predicted rapid growth in the Micro LED chip market, with an expected value of $27 million in 2023, marking a 92% YoY increase. This growth is expected to continue, reaching approximately $580 million in 2027, with a CAGR of about 136% from 2022 to 2027. AUO, known for LCDs, has already produced the world’s first 1.39-inch Micro LED watch panel. Major companies, including AUO’s current client Tag Heuer, are potential adopters of Micro LED wearable devices.
(Image: AUO)

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