During Apple’s Spring Loaded event, the Cupertino company announced the upcoming release of its latest 12.9-inch iPad Pro models featuring Mini LED display technology. According to TrendForce’s latest investigations, demand for the 12.9-inch iPad Pro has already been relatively high in the niche markets.

Thus, given the thorough improvement in specs as well as the very slight price hike of merely $100 over the previous generation, TrendForce is not only revising up its shipment forecast for the 2021 version of the 12-inch iPad Pro from four million units to five million units this year, but also expecting this product to account for a 3.1% share in the global tablet market, compared to the previous forecast of 2.5%.

TrendForce analyst Max Chen indicates three key areas of observation with respect to Apple’s latest flagship tablet: technology cost, retail price, and product spec. First, in terms of technology cost, the Mini LED backlight used in the new 12.9-inch iPad Pro costs about US$85 more than the traditional edge-lit LED backlight used in the previous generation.

Second, in terms of retail price, the entry-level 128GB model of the 12.9-inch Mini LED iPad Pro retails for $1,099, which is only $100 higher than the equivalent model of the previous generation. As such, the price hike in the latest model is, for the most part, a result of the increased cost of Mini LED backlights, rather than wholly being an attempt at driving up profit margins. The modest price hike is therefore an indication of Apple’s desire to become the gold standard in the tablet market by adopting Mini LED backlight technology.

Finally, in terms of product spec, the latest 12.9-inch Mini LED iPad Pro is equipped with Apple’s high-end Liquid Retina XDR technology, which gives the tablet a max full-screen brightness of 1,000 nits, peak brightness of 1,600 nits, and contrast ratio of 1,000,000:1, with the peak brightness and contrast ratio both being firsts in the tablet industry.

Furthermore, it should be pointed out that the latest tablet is equipped with 10,384 Mini LED chips, divided into 2,596 dimming zones, giving it additional high contrast and high color saturation performance that is superior to the 31.5-inch iMac, which features 512 backlight dimming zones and is the first product to feature Apple’s XDR display technology.

With regards to Apple’s plans for 2H21, the 14-inch and 16-inch MacBook models will likewise feature Mini LED backlight technology, which will become the hardware benchmark for high-end tablets and notebook computers. The release of Apple’s Mini LED-equipped tablets is expected to galvanize a growth against market headwinds for upstream and downstream companies in the Mini LED supply chain, including Mini LED chip suppliers (e.g., Ennostar), testing and sorting service suppliers (e.g., FitTech, Saultech, and YTEC), SMT suppliers (e.g., TSMT and Yenrich), backplane PCB suppliers (e.g., Zhen Ding Tech and Tripod Technology), driver IC suppliers (e.g., Parade, Novatek, and Macroblock), and light source module suppliers (e.g., Radiant/ROE and GIS).

(Cover image source: Apple.com)

For more information on reports and market data from TrendForce’s Department of Optoelectronics Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com

As various TV manufacturers such as Samsung, LG, and TCL announced their new models equipped with Mini LED backlights at CES 2021, TrendForce’s 2021 Mini LED New Backlight Display Trend Analysis report shows that total Mini LED chip revenue from Mini LED backlight TVs to potentially reach US$270 million in 2021, as manufacturers gradually overcome technological bottlenecks and lower their overall manufacturing costs, according to TrendForce’s latest investigations.

Mini LED backlight TVs possess a highly cost-effective competitive advantage, as Mini LED backlight costs for the entry-level segment are only 50% higher than traditional LCD equivalents

TrendForce further indicates that, with regards to TV backlight technologies, the cost of Mini LED solutions is about two to three times lower than that of white OLED and entry-level, direct-lit LCD solutions. This cost difference therefore serves as Mini LED technology’s competitive advantage over its competitors in display backlight adoption. At the moment, high-end TVs contain about 16,000 Mini LED chips per TV, divided into 2,000 local dimming zones.

In this market segment, PM (passive matrix) Mini LED TV panels with BLU (backlight unit) still cost about 15% less than OLED TV panels and therefore hold a cost advantage. On the other hand, in the mid-range TV segment, each TV contains about 10,000-12,000 Mini LED chips and 500 local dimming zones, meaning the cost of Mini LED backlight integration in this market segment is about a mere 50% more than entry-level, direct-lit LCD backlight units, making Mini LED a viable alternative to traditional LCD solutions in this segment too. Given the high cost-effectiveness of Mini LED backlight units, TV manufacturers are therefore likely to adopt them as a viable technology and initiate an industry-wide competition over Mini LED TV specs this year.

HDR and 8K resolution will be the two mainstream features of high-end TVs this year. With regards to Korean brands, Samsung’s Neo QLED Mini LED TV and LG’s QNED Mini LED TV, both unveiled at CES this year, are equipped with Mini LED backlights as a performance-enhancing technical feature. These TVs feature not only 8K resolution, but also Mini LED backlight units, which require more than 20,000 Mini LED chips (divided across more than 1,000 local dimming zones, with more than 1,000 nits in peak brightness), in addition to passive matrix FALD technology, which allows for contrast ratios of 1,000,000:1, a significant improvement that puts these TVs on almost equal footing with OLED TVs in terms of image quality. At the same time, China-based TCL is also set to release its OD Zero Mini LED TV, which has comparable specs with Korean offerings and is also equipped with Mini LED backlight units. Going forward, more and more TV manufacturers, such as Hisense and Xiaomi, are expected to participate in the burgeoning Mini LED backlight TV market.

The pace of optimizing Mini LED chips, backplanes, and driver ICs will be key to the Mini LED industry’s rapid expansion

As various manufacturers successively release their Mini LED backlight TVs this year, related companies in the supply chain are expected to benefit as a result. Currently, there are multiple major suppliers of Mini LED components on the market: Chip suppliers include Taiwanese (Epistar and Lextar), Chinese (San’an and HC SemiTek), and Korean (Seoul Semiconductor) companies. Testing and sorting companies include FitTech, Saultech, and YTEC. SMT companies include Taiwan-based Lextar and China-based Hongli Zhihui. Driver IC suppliers include Taiwanese (Macroblock, Elan, Parade, Himax, and Novatek) and Chinese (Chipone) companies. Backplane suppliers include Tawanese (Apex and Zhen Ding Tech) and Korean (Young Poong Group) companies. Panel suppliers include SDC, LGD, AUO, Innolux, BOE, and CSOT.

TrendForce believes that Mini LED backlight displays currently possess a competitive advantage over OLED displays due to the former’s 15% comparatively lower cost. Ultimately, the future development and profitability of the Mini LED backlight market in the long run will depend on the continued optimization of components that account for a relatively higher allocation of backlight costs, including Mini LED chips, Mini LED backplanes, and driver ICs.

For more information on reports and market data from TrendForce’s Department of Optoelectronics Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com

While major OEMs such as Apple and Samsung prepare to release their new notebook computers, tablets, and TVs that are fully equipped with Mini LED backlights this year, various companies in the LED supply chain began procuring Mini LED chips ahead of time in 4Q20, leading to an explosive demand growth for these chips, which in turn crowded out the LED suppliers’ production capacities for other mainstream LED chips, according to TrendForce’s latest investigations. Given this structure-wide shortage of LED chips, certain LED chip suppliers have been raising the quotes on chips supplied to non-core clients and chips with relatively low gross margins. This price hike is estimated at about 5-10%.

TrendForce further indicates that companies in the downstream LED supply chain have started to aggressively procure components in order to mitigate the impending price hike on raw materials and shortage of components due to manufacturers’ tight production capacities after the Chinese New Year. However, products of certain serial numbers or specifications are already in shortage at the moment, therefore prompting these downstream companies to raise quotes first for small- and medium-size clients who place relatively low-volume orders. As for tier one clients who have relatively higher bargaining power, should they reject such a price hike, they would then need to wait for more than two months in lead times, which is significantly longer than the average of two weeks.

Epistar is currently shipping about 150,000 pcs of Mini LED wafers (4-inch equivalent) per month. As Mini LED chips yield far higher gross margins than do traditional LEDs, Epistar has reallocated some of its production capacities for the latter, less profitable products to Mini LED chip manufacturing instead. On the other hand, San’an and HC SemiTek are directly benefitting from Epistar’s order transfers. In addition to persistently growing demand for traditional LED backlights and RGB LED chips for video walls, San’an and HC SemiTek are also shipping several tens of thousands of Mini LED wafers per month (4-inch equivalent) owing to skyrocketing Mini LED demand.

Worth mentioning is the fact that HC SemiTek’s product strategy of focusing on LED chips for display applications is paying off noticeably. By leveraging its competitive advantage of highly cost-effective products, HC SemiTek’s capacity utilization rates have been fully loaded for two consecutive quarters since 3Q20. On the other hand, about 400,000 pcs in PSS production capacity was suspended last month due to the fire at GAPSS’ fab. This incident led to a 5-10% price hike in key upstream LED chip materials including sapphire wafers and PSS, likely to further exacerbate the price hike and shortage of LED chips.

TrendForce believes that the structural shortage taking place in the LED industry, which led to a price hike for LED chips, can primarily be attributed to the that fact the industry underestimated the production capacity needed for key parts of the supply chain during the infancy of pandemic-related emerging applications, in addition to the corresponding production capacity squeeze, although these issues are expected to be resolved within half a year. As well, the downturn experienced by the LED industry within the past few years led to a clearance of excess capacities and subsequently a highly concentrated supply of key materials in the upstream LED supply chain, including sapphire wafers and PSS. As a result, the suppliers of these key materials now enjoy increased bargaining power in price negotiations. Given the simultaneous increase in material costs and limited material supplies, TrendForce thus forecasts a price hike for LED chips.

For more information on reports and market data from TrendForce’s Department of Optoelectronics Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com