Recently, miniled related information continues to swipe the screen, apple, Samsung, TCL and other large manufacturers have come out mass production news, miniled’s attention is rising rapidly. Ledinside, a subsidiary of Jibang consulting, is an authoritative research institution in the LED industry. For this reason, we interviewed Mr. Wang Fei, deputy general manager of Jibang consulting research department, to listen to the opinions of analysts of Jibang.
Q: how do you judge the supply and demand of LED industry?
A: this year, the pressure of oversupply in the industry is still great. From the market point of view, the price of lighting chips is still below the cash level, which has something to do with the active release of production capacity by new manufacturers like zhaochi. Because of its new equipment, high efficiency, high proportion of equipment subsidies and factory rent subsidies, the cost advantage is obvious. In addition, zhaochi’s main business performed well this year with good cash flow, so it can support the chip business unit to seize the market strategically without setting profit targets, thus forming greater competitive pressure on incumbent manufacturers.
But this year’s problem is not mainly about supply. The problem of supply was formed a few years ago, so most of it is expected. The main problem lies in the demand side. On the demand side, because a large part of the market of LED industry comes from overseas, it is highly dependent on exports. Therefore, under the situation of this year’s epidemic, the impact of overseas demand decline on the whole industry is quite obvious.
From the export data, it was not until May that the export improved slightly, mainly to compensate for the decline in the previous few months, and then continued to weaken. At present, the demand in August seems to be recovering, and the second half of the year should be better than the first half. But on the whole, the penetration rate of LED in lighting has been very high, and the correlation between industry demand and macro economy has been very strong. Therefore, it still depends on the direction of global macro economy.
Q: what is the difference between this round of LED industry cycle and the last round of 2015 / 2016?
A: on the whole, LED is still a developing industry. Although the supply is cyclical, the situation of the demand side is not the same in each cycle, so we can’t make a simple analogy. The biggest difference lies in the decline in 2015, which is mainly due to the mismatch between the growth rate of lighting demand for LED and the growth rate of LED chip supply. However, the overall scale of lighting is very large. Although the growth rate is shifting, the basic demand is still in the rising period. Therefore, after the adjustment in 2015, the rising trend has been restored in 16 years and 17 years.
But after 18 years, the supply expansion is too fast. On the one hand, the high point manufacturers in the 17 year cycle misjudge the demand. On the other hand, the localization of equipment reduces the entry threshold of the industry. The lighting market on the demand side has entered a mature period again, with the growth rate declining or even declining, and it is difficult to see a big upward trend in the future, so the problem of oversupply is very serious and difficult to digest, so miniled is expected to be high. Although some new applications such as UVLED and microled have good prospects, the supply still depends on new capital expenditure. Miniled is an application direction that can solve the existing oversupply problem, so the industry attaches great importance to it.
Q: is there any problem of overcapacity in the large-scale expansion of mini and micro in the industry?
A: in the short term, the expansion of mini and micro is mainly focused on diebonding and testing. These devices are mainly prepared to meet the demand of mini, so they have little impact on the existing capacity supply. Of course, for the mini industry, after the outbreak period, there must be pressure of oversupply. However, this problem is much smaller than that of the chip industry. The investment amount of piece making equipment and test equipment is small, and the elimination speed is fast. The depreciation time is short, and the pressure of oversupply is not so great. Unlike MOCVD equipment in the extension link, once the investment is difficult to exit, Long term formation of supply capacity.
As for the pressure of overcapacity of MOCVD, it needs to be digested by the demand growth of mini, so it is not the focus of equipment investment of manufacturers at present. Whether the surplus will intensify in the future depends on the capital expenditure of related equipment of manufacturers in the future.
Q: how do you judge the technology prospects of mini and micro?
A: our judgment on microled is open and can be seen on the media platform of Jibang. On the whole, we think that micro is still in the early stage of industrialization. Large commercial displays and wearable devices, including headwear devices, will be commercialized soon. We should have a chance to see a batch of products in one or two years, The main application scenarios are these niche markets, through which a series of problems in cost and process can be solved.
Miniled, we are divided into two application directions: self illumination and backlight. In fact, self luminous miniled is a technology upgrading direction of small spacing display screen, and the industrial law is in line with the development path of small spacing on the whole. Miniled backlight is the main concern in the industry. In terms of the development direction of mini backlight, because of the ability of local dimming, it can increase the performance of LCD in dynamic contrast and brightness, which is an improvement to the ability of LCD. Therefore, technically and theoretically, all LCD backlights can be equipped with miniled backlight to improve the product capability.
But in reality, because OLED is the competitor of the display scheme, miniled on mobile phones is very unrealistic, and small tablet computers are not very good at using. At present, high-end competitive displays and laptops, as well as several laptops and ipadpro series products of apple have clear commercial prospects, There are also large-scale TV products that should be released in the next year.
Q: what do you think of the technical route dispute between glass and PCB?
A: at present, the PCB scheme can be equipped with a passive drive scheme, which is a relatively mature way. Therefore, the early products should adopt the PCB scheme, and I personally prefer the scheme of matching PCB with miniled. Because it is first used by the industry, it will also have a path dependent effect on the formation of the whole industrial chain ecology. Once the scale of the industry is formed, the cost of PCB will have a lot of room to decline. At that time, the cost advantage of glass may not still exist. Another advantage of glass is that the hardness and accuracy will be better, but it will be offset by the cost of transportation and the yield of copper plating.
From the perspective of industrial ecology, glass has an advantage that panel factories prefer glass solutions, and panel factories have a heavy say in the miniled industry chain. Therefore, if panel factories have to push the glass substrate solutions, there is a certain possibility of success. In addition, if there are more partitions, the cost of the passive driving scheme will be higher, and the best one is the active driving scheme with TFT glass.
It’s not entirely a technical question whether the two schemes will win. In fact, it’s a comprehensive comparison of technology and economy. The product manager will find the optimal solution from many aspects. Therefore, in the future, different backplane schemes may be used for different types of products, glass substrates for products with convenient transportation, more backlight partitions, and PCB schemes for products with less partitions and less lattice density.
Q: what do you think of Apple’s miniled supply chain opportunities?
A: in the supply chain of miniled, apple mainly selects Taiwan manufacturers. On the one hand, the earliest Taiwan manufacturers cooperate more in R & D, and have certain advantages in communication with apple.
In addition, under the background of the Sino US trade war, the risk cost of adopting the mainland supply chain is relatively high, so new projects like this give relatively less opportunities to mainland manufacturers.
Third, I think apple is in fact in the early stage of the miniled backlight industry, when it needs to cultivate the supply chain downstream, it wants to build an independent system rather than be hitchhiked by competitors, so it gives priority to Taiwan, which has a relatively complete and closed supply chain.
In the long run, if Apple’s industrial chain is not enough to support suppliers’ good scale efficiency, Taiwan manufacturers will also develop mainland customers, and Apple will also look for more cost competitive suppliers among mainland manufacturers.
Q: what do you think of miniledtv supply chain opportunities?
A: the supply chain of large screen television (TV) has relatively more opportunities for mainland manufacturers, because the main TV panel suppliers are mainland manufacturers, and they have a strong desire to develop miniled backlight technology. Since last year, domestic manufacturers have entered the stage of small-scale production, and even some products have been sold in the market. This year, if it was not for the epidemic, the market might have entered the scale of tens of thousands of units / month in the first half of the year. However, due to the epidemic, most of the progress has been delayed. Recently, it has entered the scale of tens of thousands of units / month, and the price is not very attractive.
However, looking forward to next year, several major TV brands are adjusting their price strategies and planning batch shipment plans in this regard. At the present time, they clearly inquire from suppliers, and the scale is at the level of one million units. At present, the supply chain is very active. After all, they see a very clear demand for large-scale new application market is about to appear.
If the scale of the whole industry is 1 million units per month, the demand for chips can reach 10-15 billion pieces / month. Although the chip area does not make a great contribution to the production capacity of de epitaxial chips, considering that the initial yield is not good, it is about 300000-500000 pieces / month for two inch chips, which corresponds to one tenth of the production capacity of San’an. However, due to the high unit price, it is very difficult for chip enterprises to realize the demand, The contribution of output value is still considerable. On the panel and play part link, can also bring a substantial increase in operating income.
Q: how to judge the industry opportunity of packaging (typing)?
A: for packaging manufacturers, the workload of chip printing has increased dramatically, from a few LEDs to dozens of LEDs in a terminal device to tens of thousands of LEDs, which means that the workload has increased by three orders of magnitude, which means that the value share in the industrial chain has increased. In addition, from the original pure supply of devices, the product form has become the supply module, extending an industrial chain link forward, so the value will be significantly improved.
However, from the perspective of competition pattern, the original LED manufacturers only provide backlight devices. The market scale is not large, and because it is a relatively mature market after full competition, the number of manufacturers is small, the concentration is high, and the players’ profitability is good.
In miniled backlight products, the core process is diebonding. For many packaging factories, they all have this ability. They only invest in relatively new equipment and have customer resources to develop products according to customers’ needs. These two barriers are not too high, so many packaging manufacturers have entered this market, Therefore, from the perspective of competition pattern, the concentration of supply has decreased, and the pattern has become worse.
In addition, the panel factory itself is a big customer, the demand concentration is very high, and it is quite easy for the panel factory to internalize this link, which determines that diebonding’s industrial status is easy to be reduced to a simple OEM operation, and its bargaining power in the supply chain is very low, so it is not easy to make excess profits.
In order to improve their position in the miniled industry, packaging factories mainly need to improve their product R & D ability and production management ability. In this regard, they need to establish the ability that is not easy to be imitated by competitors or even customers, so as to open the gap and create excess profits.
Q: what other industrial chain links will benefit from?
A: it is beneficial for panel manufacturers. LCD panels are highly homogeneous products, so the price is very transparent, and the panel manufacturers have little ability to claim premium. But equipped with miniled backlight, to a certain extent, it can create vertical differentiation characteristics of products and strengthen pricing power. Moreover, the industrial status of panel factories in the ledtv industry chain of mini backlight is relatively more optimized, and their bargaining power to the upstream and downstream has been strengthened. Therefore, why panel factories actively promote miniled backlight is not because they have any preference for LED, but because miniled is a technology direction that can significantly improve the industrial status and profitability of panel factories. For LCD, in the competition with OLED, miniled strengthens the capability of LCD and extends the life cycle of LCD to some extent.
In addition, the equipment manufacturers are more benefited, but it is mainly not the epitaxial equipment, but the chip equipment, because the mini chip needs to be designed as flip chip structure, some process equipment needs to be added, the chip needs to be cut smaller, some cutting equipment needs to be supplemented, and some test equipment needs to be added. However, the most increased equipment is diebonding equipment. The demand for this part of capital expenditure is ahead of the cycle. The current new investment in LED industry is mainly aimed at this production link. In the world, there are K & S and ASM manufacturers providing related equipment, while xinyichang is more widely used by domestic packaging plants. Theoretically, they will all benefit from this round of capital expenditure.
Q: is there any other promising direction for the LED industry?
A: as far as the market segments are concerned, UVLED is stimulated by the demand for sterilization and disinfection in epidemic prevention this year, showing a surge in demand. The highest year-on-year shipment volume is 6-7 times. The main orders come from portable consumer products such as sterilization boxes and disinfection sticks. After the outbreak of such demand, there may be a long period of time, but the impulse demand opportunity promotes the expansion of investment scale of the industry, which is likely to accelerate the commercialization process of UVC led.
Just like in martial arts novels, the internal power cultivation of martial arts practitioners has been accumulated for a long time, but their martial arts have never been improved. As a result, by chance, they can get through the two channels of Ren and Du, and their martial arts level has been greatly improved. The current UVC LED is equivalent to crossing this stage with the help of epidemic prevention demand. Therefore, in the future, with the expansion of production capacity, it will soon have a chance to obtain batch application in the fields of air sterilization, refrigerator anti-corrosion lamp, water treatment and other household appliances. Such demand is more stable, product specifications are higher, and there is a longer-term development potential.
On August 31 and September 1, Jibang consulting and its partners jointly held two seminars focusing on miniled and UVLED respectively, and invited industry experts and opinion leaders in these two fields to share their industrialization experience in these two hot fields and their judgment on future products and industry trends. We hope that through the conference exchange, we can draw on the wisdom of all, More ideas and ideas are generated and sublimated to inspire more innovation and creativity. All friends in the industry are welcome to join us.
Editor in charge: Tzh