When Apple unveiled its inaugural wearable device, the Vision Pro, in June this year, CEO Tim Cook remarked, “Apple Vision Pro introduces us to spatial computing.”

The era of spatial computing entails redefining how users interact with digital content within the context of the real world. Apple’s ambition extends beyond mere immersive entertainment, aiming to seamlessly integrate personal computers and smartphones into everyday life and work scenarios, replicating the success it achieved in personal and mobile computing.

The launch of the Vision Pro has once again thrust new display technologies into the industry spotlight. Although the Vision Pro employs Micro OLED, the potential to achieve a portable, outdoor-capable mixed-reality headset rests on Micro LED, seen as the most promising option.

“Micro LED demonstrates balanced performance beyond average levels in terms of brightness, energy consumption, pixel density (Pixel per Inch, PPI), and optical module size,” noted Eric Chiou, Senior Research Vice President at TrendForce. He further emphasized Micro LED’s potential in the development of AR devices, stating, “This also explains why Meta, Google, and MIT are continuously evaluating and assisting in the development of Micro LED technology.”

The application potential of Micro LED in AR devices is evident from the number of companies investing in its development.

In the first half of 2023 alone, six companies—Raysolve, Porotech, Sitan, Kopin, GoerOptics, JBD—announced progress in the development of Micro LED micro-display products. Additionally, two AR glasses manufacturers, Rayneo Innovation and Nubia, unveiled products featuring Micro LED chips.

Certainly, Micro LED’s implementation is not confined to AR eyewear; it is making inroads into the realm of wearables, particularly in the form of smartwatches. Soon, consumers will find the first commercially available watch featuring a Micro LED screen on the market. Tag Heuer, a luxury watch brand, is leading the way with support from AU Optronics for Micro LED panels.

Anticipation mounts for an Apple Watch featuring a Micro LED screen, with rumors circulating consistently. According to earlier information from TrendForce, the release of the Micro LED version of the Apple Watch, originally projected for the second half of 2025, has been delayed to the first quarter of 2026. Initial reports suggested the supply of Micro LED chips would come from Epistar and Osram and that Apple would handle mass transfer at its Longtan facility. Recent reports, however, suggest that Apple might entrust mass transfer and subsequent work to its long-term collaborator, LG Display (LGD).

It’s rumored that LGD has visited Apple’s Longtan facility, indicating a potential handover of equipment to LGD, facilitating smooth mass transfer and back-end processes. Despite shifts in the supply chain, this alteration underscores Apple’s commitment to advancing the Micro LED version of the watch into mass production, with wearables continuing to play a pivotal role in the practical implementation of Micro LED.

The industry’s technological development and investment in wearables, particularly watches and AR glasses, demonstrate a shift towards small-sized sectors represented by headsets and wearables. This indicates that Micro LED is edging closer to large-scale commercialization and breakthrough applications.

Regarding the commercial development of Micro LED, the launch of large-sized products remains a critical indicator. Korean giants Samsung and LGD are pivotal players in this regard. Following Samsung’s introduction of the high-end 110-inch Micro LED TV, LGD’s plans to release a 136-inch Micro LED TV in 2024 have surfaced. Factoring in Samsung’s and LGD’s entries, a total of five companies, including AUO, BOE, and SmartKem, have announced developments in Micro LED display technology in 2023.

Considering the market trends mentioned above, based on TrendForce’s projections, the production value of Micro LED chips is expected to reach $27 million in 2023, showing a 92% annual growth. Looking ahead, driven by the expansion of current application shipments and the introduction of new use cases, the estimated chip production value is set to hit $580 million by 2027. This anticipates a compound annual growth rate of 136% from 2022 to 2027.

(Photo credit: Samsung)

Last week, major power semiconductor manufacturer Infineon announced plans to invest up to 5 billion euros over the next five years to construct the world’s largest 8-inch SiC power wafer factory in Kulim, Malaysia. This expansion will raise the total investment in the Kulim plant from 2 billion euros to 7 billion euros.

Interestingly, in February of this year, Wolfspeed announced its own plans to build what is touted as the world’s largest 8-inch SiC factory in the Saarland region of Germany. Infineon’s significant investment in the Malaysian 8-inch SiC factory sets the stage for potential competition with Wolfspeed, sparking an impending battle for Silicon Carbide production capacity.

In fact, driven by the rapid growth of industries like electric vehicles, the space for SiC power devices is expanding, attracting both Chinese companies and international enterprises to ramp up production.

According to statistics from TrendForce, aside from Wolfspeed, the first half of this year saw numerous companies, including STMicroelectronics, Mitsubishi Electric, Rohm, Soitec, and ON Semiconductor, expanding their production capacities. STMicroelectronics, for instance, announced a $4 billion investment in January to expand 12-inch wafer production. In June, they partnered with San’an Optoelectronics to establish a joint venture for 8-inch SiC device manufacturing, with an estimated total investment of around $3.2 billion.

On the Chinese front, there have been seven expansion projects related to Silicon Carbide. CRRC is investing 11.12 billion yuan to establish a project for the industrialization of medium and low-voltage power devices. YASC is also planning to construct a Compound Semiconductor power device production project, encompassing epitaxial growth, wafer manufacturing, packaging, and testing lines. Upon completion, the facility will have an annual production capacity of 360,000 6-inch SiC wafers and 61 million power device modules.

Additionally, BYD plans to invest 200 million yuan to establish a SiC epitaxial trial production and mass production project at its automotive production base in Shenzhen. The expansion will add 6,000 SiC epitaxial wafers per year, bringing the total capacity to 18,000 wafers per year.

(Photo credit: Tesla)

South Korean media reported that Samsung is set to manufacture a new generation of Full Self-Driving (FSD) chips for Tesla’s Level 5 autonomous vehicles. These chips will be utilized in Tesla Hardware 5 (HW 5.0) onboard computers, with production expected to commence after 2025. The chips will be manufactured using Samsung’s 4nm process.

TrendForce’s analysis:

Samsung May Competing with TSMC for Tesla HW 5.0 Chips

In the early stages of Tesla’s autonomous driving technology, the company collaborated with Samsung for FSD chips used in various vehicle models, including Model 3, Model 5, Model X, and Model Y. However, in 2022, Tesla chose to work with TSMC, citing TSMC’s better yield performance in 4nm process technology at that time.

In response, Samsung has been actively improving its 3nm and 4nm process technologies within a short period. While Samsung’s 4nm process yield has reached 75%, it still slightly lags behind TSMC’s 80%. Despite this difference, given their previous collaborations, it is not ruled out that Tesla might place orders with both TSMC and Samsung this time. The main reason being Samsung’s plan to advance to the 2nm-level SF2 process technology in 2025 and further progress to the 1.4nm-level SF1.4 process technology in 2027, aligning its overall roadmap with TSMC’s. This advancement will assist Tesla in accelerating the production plan of its DOJO supercomputer, facilitating the transition to Level 5 autonomous driving.

(Photo credit: Tesla)

Looking at the impact of AI server development on the PCB industry, mainstream AI servers, compared to general servers, incorporate 4 to 8 GPUs. Due to the need for high-frequency and high-speed data transmission, the number of PCB layers increases, and there’s an upgrade in the adoption of CCL grade as well. This surge in GPU integration drives the AI server PCB output value to surpass that of general servers by several times. However, this advancement also brings about higher technological barriers, presenting an opportunity for high-tech PCB manufacturers to benefit.

TrendForce’s perspective: 

• The increased value of AI server PCBs primarily comes from GPU boards.

Taking the NVIDIA DGX A100 as an example, its PCB can be divided into CPU boards, GPU boards, and accessory boards. The overall value of the PCB is about 5 to 6 times higher than that of a general server, with approximately 94% of the incremental value attributed to the GPU boards. This is mainly due to the fact that general servers typically do not include GPUs, while the NVIDIA DGX A100 is equipped with 8 GPUs.

Further analysis reveals that CPU boards, which consist of CPU boards, CPU mainboards, and functional accessory boards, make up about 20% of the overall AI server PCB value. On the other hand, GPU boards, including GPU boards, NV Switch, OAM (OCP Accelerator Module), and UBB (Unit Baseboard), account for around 79% of the total AI server PCB value. Accessory boards, composed of components such as power supplies, HDD, and cooling systems, contribute to only about 1% of the overall AI server PCB value.

• The technological barriers of AI servers are rising, leading to a decrease in the number of suppliers.

Since AI servers require multiple card interconnections with more extensive and denser wiring compared to general servers, and AI GPUs have more pins and an increased number of memory chips, GPU board assemblies may reach 20 layers or more. With the increase in the number of layers, the yield rate decreases.

Additionally, due to the demand for high-frequency and high-speed transmission, CCL materials have evolved from Low Loss grade to Ultra Low Loss grade. As the technological barriers rise, the number of manufacturers capable of entering the AI server supply chain also decreases.

Currently, the suppliers for CPU boards in AI servers include Ibiden, AT&S, Shinko, and Unimicron, while the mainboard PCB suppliers consist of GCE and Tripod. For GPU boards, Ibiden serves as the supplier, and for OAM PCBs, Unimicron and Zhending are the suppliers, with GCE, ACCL, and Tripod currently undergoing certification. The CCL suppliers include EMC. For UBB PCBs, the suppliers are GCE, WUS, and ACCL, with TUC and Panasonic being the CCL suppliers.

Regarding ABF boards, Taiwanese manufacturers have not yet obtained orders for NVIDIA AI GPUs. The main reason for this is the limited production volume of NVIDIA AI GPUs, with an estimated output of only about 1.5 million units in 2023. Additionally, Ibiden’s yield rate for ABF boards with 16 layers or more is approximately 10% to 20% higher than that of Taiwanese manufacturers. However, with TSMC’s continuous expansion of CoWoS capacity, it is expected that the production volume of NVIDIA AI GPUs will reach over 2.7 million units in 2024, and Taiwanese ABF board manufacturers are likely to gain a low single-digit percentage market share.

(Photo credit: Google)

China’s Automotive Price War Rages On: Some automakers have been gradually reclaiming outsourced orders for the battery, motor, electronic control system since May and June, shifting towards in-house production. Recently, they have asked suppliers to requote for second-half orders, with Samsung, Murata, Taiyo Yuden, PSA and Yageo actively vying for contracts.

Due to the more stringent certifications in the automakers’ supply chain compared to tier 1 suppliers, the majority of battery, motor, electronic control system MLCC suppliers still come from Taiwan, Japan, and Korea. Among them, Korean manufacturer Samsung has made significant progress in the Chinese automotive market this year. They have been actively providing sample for certifications and competitive pricing, securing a large share of orders and displacing Japanese manufacturers Murata and TDK, who had long held the lead.

Ongoing negotiations between automakers are expected to conclude with finalized orders by the end of August. According to the channel check from TrendForce, it appears that Samsung will maintain its leading position with a low-price strategy, while Murata, unwilling to be drawn into a price war reminiscent of consumer electronics, will remain conservative with pricing to secure a substantial market share. Taiyo Yuden, PSA and Yageo, though limited in automotive product offerings, have been proactive in their bidding efforts and have secured several orders.

(Photo credit: Yageo)