In recent years, as the Chinese government strongly promotes domestic production, the localization rate of equipment in sectors such as semiconductors, precision electronic components, and new energy lithium batteries has steadily increased. Domestic equipment is gradually replacing imports, reducing dependency on external supply chains and safeguarding against potential critical equipment bottlenecks.

In the Micro LED field, Chinese equipment manufacturers are also actively advancing the research and production of key Micro LED equipment. This year, Chinese Micro LED equipment has achieved a series of breakthroughs, with multiple companies beginning to ship equipment to downstream clients.

Alphabetter Ships Micro LED Equipment to Taiwanese Client

On November 5, Alphabetter announced that its self-developed Micro LED wafer-level PL mass inspection device, the a-M1070, was officially shipped to Taiwan, marking the first equipment delivery for a Taiwanese client. Alphabetter stated that after the mass production of the a-M1070 product line, equipment shipments have largely covered major clients in the Micro LED industry within mainland China, fully realizing domestic substitution for this type of equipment.

The shipped a-M1070 mass inspection device uses photoluminescence testing technology, enabling non-contact, non-destructive, and ultra-fast luminescence performance testing. It can measure the brightness and spectral information of tens of millions of micro-LED chips on a COW (chip on wafer) or COC (chip on carrier) wafer within minutes, with a minimum validated chip size of 3μm x 3μm.

Continued Advancements in Micro LED Technology Provide Growth Opportunities for Chinese Equipment Manufacturers

It’s worth noting that Chinese equipment manufacturers have achieved several milestones in the Micro LED field this year. In addition to Alphabetter, companies such as Seichitech, JT Automation Equipment, Delphilaser, AMEC, SINEVA, and HSET have made notable progress in Micro LED testing, packaging, mass transfer, peeling, repair, and epitaxial growth equipment development.

Looking forward to the development of Micro LED technology, the LED industry continues to expand its Micro LED technology layout, with growth momentum largely unaffected by major tech companies such as Apple.

On the contrary, as downstream manufacturers accelerate Micro LED research and production, demand for related equipment continues to grow, representing a significant potential development opportunity for Chinese equipment suppliers.

Recently, the well-known MOCVD equipment manufacturer Aixtron indicated that it had received orders from clients establishing Micro LED research and pilot production lines, with several clients considering increasing Micro LED production by 2027 or 2028. Aixtron expects its Micro LED revenue to reach tens of millions of euros in its 2024 fiscal year, with a positive outlook for Micro LED business growth in the future.

Eric Chiou, Senior Research Vice President at TrendForce, also noted that while Apple has canceled its plans to mass-produce a Micro LED version of the Apple Watch by 2026, the industry continue to drive Micro LED technology development through acquisitions, joint ventures, and partnerships, with no apparent change in the commitment and trend toward developing Micro LED.

TrendForce projects that the global Micro LED chip market will reach approximately USD 62 million in 2024, with most demand stemming from large displays. As Micro LED technology advances into automotive display and near-eye display application markets, the global Micro LED chip market value is expected to reach nearly USD 600 million by 2028.

This estimate only reflects the chip segment of the Micro LED market. With the addition of the transfer, inspection equipment, and backplane segments in the Micro LED industry chain, the industry’s total market value will significantly exceed USD 600 million.

(Photo credit: Alphabetter)

Recently, Signify announced its Q3 results for fiscal year 2024, showing a gradual recovery. Although sales declined year-over-year, the recovery in horticultural lighting, sustained growth in connected lighting, and growth in OEM and consumer businesses across multiple regions contributed to a sequential improvement in performance.

In Q3, Signify achieved sales of 1.537 billion EUR, a 6.8% decline year-over-year. However, compared to Q1 and Q2, sales showed an increase. The adjusted EBITA margin was 10.5%, similar to the previous year (10.7% in Q3 2023).

Signify’s net income reached 108 million EUR, up 30.3% year-over-year, with free cash flow at 119 million EUR(152 million EUR in Q3 2023).

For the first three quarters, Signify reported sales of 4.488 billion EUR, a 9.7% decline year-over-year; the adjusted EBITA margin was 8.9%; net income was 215 million EUR, an increase of 38% year-over-year; free cash flow was 249 million EUR.

In Q3, LED-based products accounted for 90% of total sales, a year-over-year increase. Additionally, the installed base of connected lighting points grew to 139 million during the reporting period.

Signify noted that its sales data showed a trend of consistent year-over-year improvement. The company effectively managed the accelerated decline of its traditional business and continued weakness in the Chinese market. Excluding these negative factors, sales declined by only 1.3% year-over-year.

To enhance its customer-centered operating structure, improve operational efficiency, and reduce structural costs, Signify has divided its business into four segments: Professional, Consumer, OEM, and Conventional.

Although sales in both Professional and Consumer segments declined year-over-year in Q3, they grew compared to Q1 and Q2. Professional sales reached 995 million EUR in Q3, down 5.6% year-over-year, while Consumer sales reached 304 million EUR, down 3.8%.

In the Professional segment, Signify saw recovery in its horticultural lighting products and continued growth in connected lighting products. Regionally, distribution channels in Europe remained weak, particularly in Eastern and Southern Europe, while Northern Europe saw growth.

Notably, horticultural lighting was one of the bright spots in lighting for 2024. According to TrendForce’s “2024 Global LED Lighting Market Analysis – 2H24,” demand for LED lighting in greenhouses focused on fruit and vegetable cultivation saw a resurgence in the first half of 2024, with investments in vertical farms—especially small and medium-sized vertical farms—boosting new demand and significantly increasing orders for LED horticultural lighting companies.

In Signify’s financial report, horticultural lighting continued its recovery in Q3. TrendForce estimates that the LED horticultural lighting market will grow to 1.317 billion USD in 2024 (+6.8% YoY) and expects another peak in replacement demand post-2025, likely driving further demand increases for horticultural lighting.

In addition to horticultural lighting, new LED applications in beauty, fisheries, livestock, and microalgae are emerging as important niche markets in the future of lighting.

In the Consumer segment, Signify reported growth in all regions except China. Excluding China, sales grew by 2.6% year-over-year.

Signify’s OEM business primarily provides contract manufacturing services for LED lighting components. Supported by stable client inventory levels and strong performance in Europe, this segment’s Q3 sales reached €126 million, a 1.6% decline year-over-year.

On the other hand, due to the ban on fluorescent lamp sales in Europe and four U.S. states, sales in the Conventional segment totaled 102 million EUR in Q3, a 29.9% decline year-over-year, and also declined sequentially compared to Q1 and Q2.

In response to the ongoing decline in its Conventional business, Signify announced it will gradually scale back this segment and continue increasing investments in connected and professional lighting products, which now account for 30% of Signify’s overall business, providing strong growth opportunities across Professional, Consumer, and OEM segments.

Looking ahead to Q4, Signify expects the adjusted EBITA margin to be at the lower end of the 10.0%-10.5% range, with free cash flow projected to account for 6%-7% of sales.

According to a report by China’s CCTV Finance on October 20, Samsung Electronics has recently begun restructuring its business, with the semiconductor division deciding to withdraw from the light-emitting diode (LED) business.

Samsung Electronics to Focus on Power Semiconductors

The report highlighted that Samsung Electronics’ exit from the LED business is primarily due to the group’s overall performance falling short of expectations.

According to Samsung Electronics’ preliminary unaudited financial results released on October 8 for the third quarter of 2024, both the company’s profit and revenue for the quarter fell below market expectations. Sales were 79 trillion KRW, a 17.2% year-on-year increase but lower than the market estimate of 81.57 trillion KRW. Operating profit was 9.1 trillion KRW, a 274.5% year-on-year increase but down 12.8% from the previous quarter, and also below analysts’ estimate of 11.5 trillion KRW.

Samsung entered the LED lighting business in 2012 by merging with Samsung LED. However, in recent years, the business has continued to struggle, gradually losing its competitive edge in the international market. Although the annual sales from this business reached approximately 10.4 billion RMB, Samsung believed that its contribution to the company’s overall sales was too small to ensure the desired profitability.

Therefore, Samsung decided to divest the LED business to focus more on core areas with better growth prospects, such as power semiconductors and Micro LED technology.

Power semiconductors are primarily used in electric vehicles, smartphones, energy storage, and home appliances. They are responsible for power conversion and current control, and are considered a crucial engine for accelerating industrial growth.

Samsung Expands Power Semiconductor Business

At the beginning of 2023, Samsung established a special task force for power semiconductors, and by the end of the year, it further reorganized its operations, transforming the LED division into the Power Semiconductor Division.

In July 2023, Samsung announced at its Foundry Forum that it would launch 8-inch gallium nitride (GaN) power semiconductor foundry services by 2025, targeting applications in consumer electronics, data centers, and automotive markets.

As part of this strategic plan, Samsung introduced German company Aixtron’s metal-organic chemical vapor deposition (MOCVD) system into its Giheung factory, which specializes in 8-inch wafer foundry, during the second quarter of this year.

Challenges Facing Samsung’s Semiconductor Business

Samsung’s semiconductor division, despite being one of its strongest sectors, is also facing increasing challenges.

In terms of wafer foundry, Samsung has long aimed to compete with TSMC. However, the two still show a noticeable gap in market share. According to the latest rankings from TrendForce in early September, TSMC held a dominant 62.3% market share in the second quarter, while Samsung, in second place, had a share of 11.5%.

Moreover, Samsung’s plans to build a wafer foundry in the U.S. have faced repeated delays. According to Reuters, Samsung has postponed the procurement of equipment for its Texas-based Taylor wafer plant due to difficulties in securing clients willing to collaborate.

The Taylor plant, with an investment of $17 billion, was originally intended to produce advanced chips for markets like artificial intelligence and smartphones, which require extreme ultraviolet (EUV) lithography equipment. Each standard EUV system costs approximately $150 million, and it is currently unclear how many units Samsung had originally planned to order from ASML. Both Samsung and ASML have declined to comment on the delayed equipment orders.

Earlier this year, media reports indicated that Samsung had delayed the mass production timeline for the Taylor plant from 2024 to 2026. However, without securing any cooperative clients, the plant’s prospects remain challenging, even with the delayed production schedule.

Some analysts suggest that if Samsung does not finalize orders for the necessary production equipment by early 2025, the production timeline could be further delayed, considering the time required from chip production to delivery.

Samsung Electronics plays a critical role in South Korea’s economy. As noted by China’s CCTV Finance, Samsung’s exports accounted for about 18% of South Korea’s total export volume last year. A decline in Samsung’s performance not only affects the competitiveness of South Korea’s semiconductor exports but also has a ripple effect on numerous upstream and downstream companies that collaborate with Samsung.

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(Photo credit: Samsung)

In 2024, LED display industry has showed positive signs with the first introduction of LED virtual production technology at Chinese Spring Festival Gala, the debut of the world’s first acoustically transparent LED cinema screen, and the first entry of Olympic event broadcast in Chinese cinema. This, to some extent, reflects the thriving trend of LED display in emerging markets, despite the overall lackluster global economy. Truth be told, what is the actual market situation?

LED Display Sector Expected to Embrace a Brilliant Future

On the demand side, according to TrendForce, while China’s domestic demand recovery has fallen short of expectations, overseas market demand still shows an upward trend, particularly in regions like Asia, Africa, and Latin America, where LED display industry is still in its early stage. Against this backdrop, the overall demand for LED display has been on the rise over the past two years.

On the application side, the potential of emerging applications such as LED virtual production, LED cinema screen, and LED All-in-One display is highly recognized. Although growth has slowed down in 2023, these markets are still greeted by high market enthusiasm, and have seen market size gradually expand.

TrendForce predicts that shipment of LED All-in-One display will exceed 6,000 units in 2024, compared to about 4,000 units in the past two years.

With respect to LED cinema, TrendForce estimates that the global installed base of LED cinema screen will reach 160 units this year. Given that the total market size of global high-end LED cinema screen is 30,000 units, while the current penetration rate is only about 0.5%, there is still significant room for the development of LED display technology in this market. Moreover, cinemas are becoming more proactive in adopting LED screens.

In China, approximately 40 LED cinema halls were opened as of July 2024, among which 19 halls were newly added in 2024.

As to LED virtual production, the total number of LED virtual production studios in China has reached 41 to date, with 10 new studios added this year.

Currently, China has attached more importance to the development of both LED virtual production and LED cinema screen industries by launching related supporting policies, which further boosts the confidence of the industry chain and signals a promising market outlook.

On the supply side, LED display manufacturers continue to leverage innovative technologies to drive growth in emerging markets, deploying diversified packaging technologies for various application scenarios. Among them, COB (Chip on Board) display has enjoyed rapid growth and MiP (Mini/Micro LED in Package) LED display seen increasing demand in recent years, which enable LED display to open up more application markets.

Overall, TrendForce remains sanguine about the prospect for LED display industry. It estimates that the demands for LED display in both Chinese and international markets are projected to trend upward, fueled by fine pitch and Mini LED displays. According to TrendForce’s 2024 Global LED Video Wall Market Analysis Report, the market size of LED video wall is expected to grow to USD 10.7 billion in 2027.

A More Innovative Supporting Industrial Chain Being in Demand

LED display has expanded its footprint from professional display to commercial display and consumer display fields, and now it starts integrating cross-disciplinary technologies and becomes a non-negligible part of our daily life in diversified and creative forms, which undoubtedly ushers in a brand-new era of LED display. For LED manufacturers, opening up the market is just the first step, and the next step is to fully tap this vast potential.

Taking the market adoption rate of Mini/Micro LED products and the penetration rate of COB (Chip on Board) and MiP (Mini/Micro LED in Package) technologies into consideration, however, LED display in emerging application fields is in its relatively nascent state. In face of the global urgent demand for energy conservation and the ever-increasing consumer expectation for display performance, LED manufacturers have to cross some hurdles.

In recent years, countries across the world have launched relevant energy efficiency standards for different technologies and products. For instance, the first Chinese mandatory national energy efficiency standard for LED display, Minimum Allowable Values of Energy Efficiency and Energy Efficiency Grades for Displays (GB21520-2023), was officially implemented on June 1, 2024, under which LED display will become more energy-saving. It specifies the energy efficiency grades for LED All-in-One display, divided into three grades: 3.0 (Grade 1), 2.2 (Grade 2), and 1.5 (Grade 3). In light of this standard, LED manufacturers are required to develop truly low-temperature, energy-efficient displays based on highly efficient technology and reliable quality.

Speaking of the applications, virtual production, cinema screen, and All-in-One display demand high image quality, color precision and smoothness, HDR (High Dynamic Range) imaging, high refresh rate, and high grayscale performance, which translate into continuously shrinking pixel pitch for LED display. However, in the course of seeking higher performance, LED display still faces varied challenges in reference to power consumption, display quality, and cost reduction, specifically including increased power consumption and temperature, low grayscale effect under low current condition, coupling at high grayscale, discontinuous grayscale, maintaining color depth at high refresh rate, and how to arrange IC as pixel density increases.

It’s plain to see that while high-performance products are sought after, the innovation need of the supporting industry chain for LED display is rising as well, and LED driver IC, an indispensable part of LED display, presents a key in addressing these challenges.

Take power consumption, for example: for a P0.9 COB 4K display, driver IC can account for up to 72% of total power consumption, and highly-integrated, common-cathode driver IC is considered as a perfect fit, which has proven to be energy-efficient and able to achieve low-temperature, energy-saving screens. It’s learned that common-cathode structure can reduce power consumption by 13% compared to traditional common-anode structure.

Although highly-integrated, common-cathode structure has not yet been the mainstream solution, it is deemed to be an inevitable trend in this field. From Xm-Plus’ highly-integrated, common-cathode LED driver ICs, we can find that its outstanding features have been exemplified by a series of real cases.

Xm-Plus Keeps Pushing the Limit to Empower the Innovation of LED Display Industry

According to LEDinside, Xm-Plus has rolled out several highly integrated, common-cathode driver IC series based on its green common-cathode technology and patented low grayscale calibration technology in recent years, including XM10486G, XM10480G, and XM11202G. They are characterized by the company’s exclusive accurate calibration scale, excelling in grayscale effect, low grayscale calibration, and energy efficiency.

XM10480G has been adopted by renowned LED display manufacturers such as Unilumin, QSTECH, HCP and Showho LED. For instance, XM10480G was integrated in HCP Mini COB P0.9 LED display, supporting 40 scanning, 7680Hz refresh rate, 16-bit color depth and 1000nits brightness.

As a good match for virtual production, XM10486G has been included in the product list of Brompton, a UK-based leading provider of LED video processor for virtual production. Brompton has partnered with numerous well-known display manufacturers such as Sony, Unilumin, Absen, Aoto and AUO, to name just a few.

Notably, Xm-Plus has upgraded its driver ICs built on the existing technologies and performance with the debut of XM11206G in July this year, which boasts high bit depth, high contrast ratio, and low power consumption.

In terms of display effect, the highly-integrated XM11206G can achieve 18-bit high color depth, support low grayscale effect at high refresh rate (with a 16-fold improvement in refresh rate at low grayscale, addressing flicker issues visible to the human eyes), and allows customizable scanning lines to simplify display panel design. It also supports front-end high frame rate input (23Hz to 480Hz), with a visual refresh rate of up to 15,360Hz, making it suitable for high-frame-rate scenarios like 3D displays.

Regarding power consumption, XM11206G adopts an energy-saving architecture, cutting static power consumption at black-screen mode by 20% compared to its predecessor IC Power/Pixel, making it an ideal solution for fine-pitch LED display and low-temperature screen.

From a cost perspective, as an advanced version of XM11202G, XM11206G reduces the number of ICs needed by increasing scanning, helping customers lower system costs. Currently, XM11206G has already gained in-house validation by major manufacturers and is incrementally being integrated into terminal projects.

The comprehensive upgrades of Xm-Plus’ highly-integrated, common-cathode driver ICs not only marks a timely response to LED display industry’s new needs, but also reflects the company’s ongoing breakthroughs in exploring new display frontiers.

In addition to upgrading existing products, Xm-Plus has also set sights on developing more innovative products that align with the industry trend, like XM11204G designed for four-chip virtual pixel applications. This driver IC supports three power inputs and independent current adjustment for four channels, allowing backend manufacturers to improve display effect while reducing overall cost.

Virtual pixel technology has been put into the limelight since last year, but it is still immature in both technology and the development of supporting industry chain, leading to lackluster display performance. Further improvement requires the collaboration across the whole industry chain and other fields like supporting software algorithms. Still, its potential is widely and highly anticipated.

Xm-Plus points out that 8K UHD applications are driving LED display industry toward ultra-fine-pitch display field, but <P0.7 display faces cost and production yield challenges. In this context, virtual pixel technology will be a good option. With the shrinking of pixel pitch and the optimization of virtual pixel algorithms by system manufacturers, the overall image quality will see substantial improvement.

Looking ahead to the future, Xm-Plus, rooted in LED display industry, plans to actively collaborate with its partners in LED display industry chain to tackle technical and cost-related issues in the MLED era, jointly promoting the innovation and the renewal of LED display industry.

(Photo credit: Xm-Plus)

Novatek, a major driver IC manufacturer in Taiwan, has made a significant breakthrough by securing a spot in the iPhone supply chain. According to a report from Economic Daily News, Novatek’s OLED driver IC is reportedly set to be used in Apple’s upcoming iPhone 16 series, which would be the first time a Taiwanese IC design company has secured a key chip order for the iPhone. Reportedly, the order is expected to boost NovaTek’s OLED driver IC shipments in the second half of the year by 50% compared to the first half.

As the new iPhone 16 series will debut in September, reports indicate that the model will feature the latest A18 processor, produced using TSMC’s N3P process, with mass shipments expected in the third quarter.

The iPhone 16 series will continue to equip OLED panels, but with expected pixel upgrades, which will also enhance the specifications of the OLED driver IC. Novatek will supply the OLED driver IC for the new iPhone, marking its first entry into the iPhone supply chain and the first time a Taiwanese IC design company has secured a key chip order for the iPhone, the report noted.

Novatek typically does not comment on orders or customers.

Previously, Novatek’s driver ICs have been adopted by Apple’s iPad for several years, but unable to secure an iPhone order. This breakthrough comes as Novatek penetrates the iPhone 16 supply chain via the collaboration with LG Display (LGD) of South Korea, combining with LGD’s OLED panels for shipment.

According to the industry sources cited by the same report, Novatek will begin delivering the OLED driver ICs to LGD in July. These ICs will be assembled into panel modules in the third quarter and then sent to OEMs for new device production, aligning with the AI iPhone launch.

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(Photo credit: Novatek)