Display panel manufacturers are scrambling for "core", and the "vertical integration" of micro LED industry chain is speeding up

Since this year, despite the continuous downturn in the display industry, MLED technology is still expected to be high, and the industry continues to make big moves. Hisense Video and BOE have successively invested heavily in the upstream LED chip enterprises Qianzhao Optoelectronics and Huacan Optoelectronics to seize the "core" opportunity and seek the business layout of the whole industrial chain.

Industry insiders pointed out that MLED is a deep role in strengthening the industry chain of TFT-LCD industry. Active layout of MLED chips can extend the life cycle of TFT-LCD industry, and also improve the long-term competitive strength of panel factories. At the same time, with more supply chain manufacturers allied, the industrialization process of Micro LED is expected to accelerate.

MLED is highly sought after by the market

MLED is a new display technology that attracts the attention of the industry. With the continuous promotion of consumption upgrading, MLED technology, with its advantages of high image quality, wide color gamut, fixed-point drive, high response speed, and excellent stability, has gradually become an important technology development direction in the backlight and display fields, and is expected to break out in the commercial display markets such as conference rooms, education, shopping malls, and cinemas.

According to the prediction of professional consultants, the MLED industry has a good prospect and is developing rapidly. It is estimated that the global market size will exceed 330 billion yuan in 2030, including 180 billion yuan for MLED direct display, 120 billion yuan for MLED backlight, and 35 billion yuan for Micro LED.

Chen Xuecheng, senior analyst of Qunzhi Consulting's display technology, pointed out that MLED is mainly divided into Mini LED and Micro LED. At present, Mini LED technology is relatively mature, while Micro LED is still in the early stage of the technology life curve, and there are still many technical bottlenecks in commercialization.

At present, Mini LED backlight has been successfully applied to vehicle mounted display, tablet computer, notebook computer, TV, display, VR and other fields, showing great development potential. Although the market is sluggish this year, the market of Mini LED backlight TV, tablet computer, monitor and notebook computer still keeps growing at a high speed.

Data shows that in 2022, the shipments of MiniLED panels for tablets, laptops and displays are expected to reach 9.7 million, 5 million and 65000 respectively, with year-on-year growth of 80%, 150% and 27% respectively. The shipment of Mini LED backlight televisions is expected to reach 3.8 million, accounting for nearly 2% of the market, with a year-on-year growth of more than 140%.

CITIC Securities said that, in the medium to long term, with the maturity of the process and the decline of the cost, Mini LED continues to penetrate into the middle and high-end fields, which is expected to usher in an outbreak period. It is expected that the penetration rate of Mini backlight laptop/Pad/E-sports display is expected to reach 20%/10%/18% respectively by 2024.

At present, although MLED products are still in the early stage of penetration enhancement, under the policy support and giant guidance, the future volume of Mini LED can be expected. Of course, domestic manufacturers will not miss such an imaginative market.

In recent years, domestic manufacturers have added to the Mini/Micro LED field. The chip enterprises upstream of the Mini/Micro LED industry chain include San'an Optoelectronics, Huacan Optoelectronics, and Qianzhao Optoelectronics. Midstream packaging and testing manufacturers include Guoxing Optoelectronics, Ruifeng Optoelectronics, Zhaochi Co., Ltd., equipment manufacturers Han's Laser, North Huachuang, Zhongwei Semiconductor, New Yichang, and panel manufacturers such as BOE, TCL Huaxing, and Vicino.

The insiders said to the author, "After the development in recent years, the mini LED backlight industry chain LCD has gradually matured, and the localization rate of materials/equipment is still relatively high. As far as LED chips are concerned, most of them are domestic, and there is still some overseas production capacity."

Four camps are forming

At present, Samsung, LG, TCL and other major terminal brands have continuously introduced Mini LED products, and the commercial use of Mini LED has become more common. Therefore, the layout of display manufacturers in Micro LED has received more attention.

From the perspective of MLED industry as a whole, the three core technologies are Mini/Micro LED epitaxial/chip technology, active drive backplane technology and high-speed/massive transfer technology, which play a decisive role in key process optimization and product development iteration. Mastering the three core technologies is crucial for industry enterprises to establish technical competition barriers.

As a determined direction of display technology, Mini/Micro LED has attracted much attention. So, how can the enterprise ensure the leading technology in the era of Mini/Micro LED, which is surrounded by strong competitors? Obviously, chips, as the "highland" of display technology, are a link that cannot be ignored.

Integration is a good way, so BOE plans to hold Huacan Optoelectronics. Not long ago, BOE planned to purchase A-shares issued by Huacan Optoelectronics to specific objects with self raised funds of no more than 2.1 billion yuan. After the subscription, BOE will become the largest shareholder of the company with 23.08% shareholding ratio, so as to achieve control over Huacan Optoelectronics.

BOE pointed out that through this strategic investment in Huacan Optoelectronics, the company will realize the integration of the core links of the MLED industry chain, and further integrate its own advantages in the packaging and application fields, so as to completely open the whole industry chain of substrate, extension, chip, packaging and application.

In fact, this is not the first time for BOE to sell Mini/Micro LED chip. In March this year, Tianjin BOE Innovation Investment Co., Ltd., wholly-owned by BOE, planned to participate in the private placement of Qianzhao Optoelectronics with 468 million yuan, but failed in the end.

The directional additional offering of Qianzhao Optoelectronics was finally successfully subscribed by Hisense Video. Since then, Hisense Video has continuously increased its shareholding in Qianzhao Optoelectronics. Up to now, Hisense Video has held 19.54% of shares in Qianzhao Optoelectronics. People from Hisense Video Securities Department pointed out that MLED is a very important technology path in display, and also the direction that the company will focus on in the future.

In addition to BOE and Hisense, as early as 2020, TCL Huaxing established a joint venture with San'an Optoelectronics, which has the largest LED chip shipment in recent years, to set up Shining Display Technology, and committed to Micro LED technology; The Micro LED production base jointly established by Liad and Crystal Optoelectronics has also been officially put into mass production in 2020, and the company has signed nearly 400 million new orders for Micro LED by the end of November this year.

At present, the development of Micro LED industry has gradually formed four camps, including "Fucai (Jingdian, Jingcheng, Longda), Youda, Qunzhuang", "BOE, Huacan Optoelectronics, BOE Pixey and BOE Chip Technology", "Huaxing Optoelectronics, San'an Optoelectronics and Core Display", and "Hisense Video, Dry Lighting Optoelectronics".

As for the phenomenon that display panel enterprises have invested in chip enterprises, the Western Securities Research Report pointed out that, "In the past year, there have been several similar actions of the panel factory to participate in shares and bind MLED related chip factories. Under the ba