Per Korean media theElec on August 19, Samsung Electronics is considering outsourcing part of its Micro LED display production to a third party including China-based MTC.

According to industry sources cited by Korean media, Samsung is currently evaluating the possibility of outsourcing production due to cost considerations, particularly for the low-end Micro LED display targeting markets like India and the Middle East.

Industry sources further reveal that the proportion of outsourced orders is expected to account for 20-30% of Samsung’s total Micro LED display products.

It’s reported that Samsung mainly provides Micro LED display for residential and commercial applications. In TV market, Samsung purchased Micro LED chips from San’an and PlayNitride.

After these chips are placed on substrate, transferred and packaged, Samsung directly handles other processes. For low-end products, the majority of current Micro LED production is done by itself, with only a small portion outsourced.

Technically, Samsung’s latest Micro LED TV uses LTPS TFT (Low-Temperature Polycrystalline Silicon Thin-Film Transistor) technology, while its commercial Micro LED display is still based on PCB technology.

The report suggested that if Samsung outsources the production of commercial Micro LED modules to manufacturers like MTC, they would assemble them for Samsung using PCBA (Printed Circuit Board Assembly) methods.

Given that companies like MTC in China have improved their Micro LED module technology, Samsung believes there is no significant difference between outsourcing production and completing the related module processes in-house.

Moreover, it could reduce production cost. If cooperates with MTC, Samsung expects Micro LED production cost to potentially decrease by 5-10%.

Besides cost reduction, Korean media point out that Samsung’s consideration of outsourcing low-end product production could allow it to focus on Micro LED module bonding and seamless technology, which are closely related to semiconductor manufacturing processes.

Industry sources highlight that the bonding and seamless technology of Micro LED modules are more critical, as these processes determine the final quality of Micro LED, despite the highly overlapping supply chains of Micro LED chips among manufacturers.

In fact, Samsung’s plan to reduce Micro LED cost has long been an open secret within the industry. As per Korean media reports in July, Samsung has already initiated its cost reduction plan and is currently working with relevant partners to push this project forward.

However, it’s worth noting that the potential partner mentioned by Korean media is BMTC. According to information from LEDinside, MTC’s LED business includes two downstream subsidiaries: VMTC and BMTC.

The former focuses on COB fine-pitch display business, while the latter on SMD LED packaging, backlighting, and lighting. If Samsung were to collaborate with MTC on Micro LED manufacturing, the corresponding products would theoretically be VMTC’s COB modules.

Currently, no official confirmation is disclosed, and the actual situation remains to be verified.

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(Photo credit: Samsung)