Mini-LEDs - More
Mini-LEDs get quite a bit of coverage, both from us and the tech press, but most investors we speak with have little understanding as what Mini-LED backlights are and how they differ from what has existed in the past, so we look at a few examples to give a better understanding of what Mini-LED units are used for and how it is changing the display business. This is not an all-encompassing note in that we are not going to delve into the detailed mechanics of Mini-LEDs and Mini-LED backlighting, but more toward giving a more practical look at the technology.
At the onset, it is important to understand that Mini-LEDs and their applications are not new or a radically different technology from what has existed since LCD displays were commercialized. LCD technology is based on using liquid crystal as a ‘gate’ that opens and closes, letting light through the crystal or blocking it before it reaches a color filter that breaks it down into three colors for each pixel. In early LCD displays that light was produced using fluorescent light strips but that type of light was not well suited for effective color production. Eventually fluorescent LCD backlights were replaced with LEDs which gave display designers a bit more color quality and required less bulky components that allowed displays to become thinner and lighter.
LCD backlights based on LEDs initially began as rows of LEDs mounted on one or two edges of the display. These LEDs were mounted so the light would be generated horizontally, shining into the edge of an acrylic plate (light guide) whose optical characteristics spread the LED light across the entire display. Such edge-lit backlights were always on, using the liquid crystal pixels to block or unblock the light according to the image, but while this was a step up from fluorescent backlights, due to the physical characteristics of liquid crystal, some of the LED light passed through the liquid crystal even when it was ‘closed’. This made pixels that should have been black a bit gray and at the same time, the LED light from areas where the liquid crystal was ‘open’ leaked into pixels that were ‘closed’ causing a halo or bloom effect.
At the onset, it is important to understand that Mini-LEDs and their applications are not new or a radically different technology from what has existed since LCD displays were commercialized. LCD technology is based on using liquid crystal as a ‘gate’ that opens and closes, letting light through the crystal or blocking it before it reaches a color filter that breaks it down into three colors for each pixel. In early LCD displays that light was produced using fluorescent light strips but that type of light was not well suited for effective color production. Eventually fluorescent LCD backlights were replaced with LEDs which gave display designers a bit more color quality and required less bulky components that allowed displays to become thinner and lighter.
LCD backlights based on LEDs initially began as rows of LEDs mounted on one or two edges of the display. These LEDs were mounted so the light would be generated horizontally, shining into the edge of an acrylic plate (light guide) whose optical characteristics spread the LED light across the entire display. Such edge-lit backlights were always on, using the liquid crystal pixels to block or unblock the light according to the image, but while this was a step up from fluorescent backlights, due to the physical characteristics of liquid crystal, some of the LED light passed through the liquid crystal even when it was ‘closed’. This made pixels that should have been black a bit gray and at the same time, the LED light from areas where the liquid crystal was ‘open’ leaked into pixels that were ‘closed’ causing a halo or bloom effect.
Edge-Lit Backlight with Diffuser - Source: Brandan Lighting
Bloom Example - Source: u/Ransom_Seraph
While this sounds bad, it was the norm for LCD displays until 2013 when OLED displays were introduced. As each pixel in an OLED display produces its own light, when an OLED pixel is off, it is black, and since there is no backlight in OLED displays, there is nothing to leak into adjacent pixels. Such contrast made the grayish blacks in LCD displays look inferior and LCD designers went to work to find ways to combat the threat of OLED. One new iteration was to move the LEDs from the edges to directly behind the light guide, more effectively spreading the light across the display, but given that the LEDs were still on all of the time, the other issues remained. Designers then came up with the idea of dimming the LEDs in coordination with the image by using silicon to sample each image before it was displayed, determining the ‘best’ overall brightness level and dimming the entire LED backlight to match.
Direct Lit Backlight - Source: The Appliance Reviews
While dimming was certainly the right track, images are complex, with very different areas that can be widely different as to lighting. Dimming the entire LED backlight to suit an ‘average’ caused bright areas to be dimmer and dark areas to be brighter, so designers then split up the LEDs into groups, taking what might have been 32 LEDs and breaking them into ‘strings’ of 4 LEDs each. While this meant creating separate control circuitry for each ‘string’, by placing the 8 strings in this example across the careen, the silicon could now average the correct lighting for each string ‘zone’ and further refine how much light each string produced.
Mini-LED String/Zone Example - Source: SCMR LLC
Full Array LED Backlight (Not Mini-LED) in operation - Source: Vizio
Mini-LEDs take this concept of dimming to its next level by both reducing the size of the LEDs, allowing them to be placed closer together, increasing the total number of LEDs used, and breaking the LED backlights into what are thousands of zones. By increasing the granularity of the LED backlight’s ability to control smaller image segments, the light leakage and the halo effect are reduced, creating deeper blacks without sacrificing the brightness in other areas of the image. Mini-LEDs will continue to evolve, moving to smaller LEDs, smaller pitch (the distance between each LED) and more zones, but there are some issues that inherent in making such improvements, with the single most important being price.
More LEDs and more control circuitry mean it takes more time to produce. At the chip level die need to be tested both to make sure they work and to check color and brightness. Then they are usually transferred to an intermediate medium and then placed on the final substrate. Increasing the number of LEDs and decreasing the size adds time and therefore cost to the backlight, and as Mini-LED levels, the cost increases as typical process equipment is not designed to operate at such dimensions and speeds. We have noted that new technologies for sort and transfer are being developed, but it will take time for costs to be reduced, leaving Mini-LED displays in the ‘premium’ category.
By scaling production and equipment to these new levels, especially taking cues from semiconductor tools that are adept at smaller device sizes, costs can be reduced and one such path is based on the Mini-LED array itself. Most LED backlights are built on PCBs, which mounts the LEDs on a T-pack that is soldered to the PCB board or by using surface mounted LEDs, which are packages that connect the LED to the PCB. Smaller LED backlights were relatively easy to produce this way, but as the number of LEDs increased, the control circuitry became more complex, and the size of displays continued to increase, PCBs had to also increase in size, now fitting TVs over 80”.
This became considerably more burdensome for TV designers, and with the move to Mini-LEDs, which can bring the LED count to 20,000 or more, PCB boards began to become unwieldy, having to be mounted in frames to keep them rigid. Mini-LEDs are now transitioning to a process called COB (Chip-on-board) where the LED itself, not a package/LED is mounted on a substrate such as glass, that already has control circuitry in place. This technique, which uses deposition processes similar to those used to produce TFT (Thin-film transistor) backplanes for displays, allows for more densely packed Mini-LED displays, and because spot soldering is not used, the failure rate is considerably less than with SMT arrays. Given the smaller size and large numbers of Mini-LEDs used in displays, the cost of repairing a defective Mini-LED is high, which adds value to the COB process. As the industry develops such processes, the price of Mini-LED backlights will decrease while the characteristics continue to improve.
More LEDs and more control circuitry mean it takes more time to produce. At the chip level die need to be tested both to make sure they work and to check color and brightness. Then they are usually transferred to an intermediate medium and then placed on the final substrate. Increasing the number of LEDs and decreasing the size adds time and therefore cost to the backlight, and as Mini-LED levels, the cost increases as typical process equipment is not designed to operate at such dimensions and speeds. We have noted that new technologies for sort and transfer are being developed, but it will take time for costs to be reduced, leaving Mini-LED displays in the ‘premium’ category.
By scaling production and equipment to these new levels, especially taking cues from semiconductor tools that are adept at smaller device sizes, costs can be reduced and one such path is based on the Mini-LED array itself. Most LED backlights are built on PCBs, which mounts the LEDs on a T-pack that is soldered to the PCB board or by using surface mounted LEDs, which are packages that connect the LED to the PCB. Smaller LED backlights were relatively easy to produce this way, but as the number of LEDs increased, the control circuitry became more complex, and the size of displays continued to increase, PCBs had to also increase in size, now fitting TVs over 80”.
This became considerably more burdensome for TV designers, and with the move to Mini-LEDs, which can bring the LED count to 20,000 or more, PCB boards began to become unwieldy, having to be mounted in frames to keep them rigid. Mini-LEDs are now transitioning to a process called COB (Chip-on-board) where the LED itself, not a package/LED is mounted on a substrate such as glass, that already has control circuitry in place. This technique, which uses deposition processes similar to those used to produce TFT (Thin-film transistor) backplanes for displays, allows for more densely packed Mini-LED displays, and because spot soldering is not used, the failure rate is considerably less than with SMT arrays. Given the smaller size and large numbers of Mini-LEDs used in displays, the cost of repairing a defective Mini-LED is high, which adds value to the COB process. As the industry develops such processes, the price of Mini-LED backlights will decrease while the characteristics continue to improve.
T-Pack LED Mounting - Source: ProPhotonix
SMD vs. COB LED - Source: RigardLED.com
While the price of Mini-LED backlit LCD displays is certainly higher than typical edge-lit or full-array backlighting, even less sophisticated Mini-LED processes have a place in the display space and takin a cue from one of the early leaders in Mini-LED backlight development, Taiwan based Lextar (3724.TT), show a few examples of their Mini-LED backlight product applications in Figs. 8 -11. We assume that chips for such arrays come from affiliate Epistar (3724.TT), while other chip suppliers have aligned with other Mini-LED packagers and array suppliers. Such is the case with China’s BOE (200725.CH) who began production of a Mini-LED display line in March of 2020 with an emphasis on COB on glass substrates, working with chip supplier HC Semitek (300323.CH). HC Semitek has also been supplying Mini-LED chip product to TCL (000100.CH) who has been a leader in the Mini-LED TV space and Skyworth (751.HK). Foshan Nationstar (002449.CH), and Shenzhen LongLi Technology (300752.CH) have also supplied Mini-LED chips to TCL, and one might notice a preference to use local LED suppliers coming from Chinese Mini-LED array producers.
All in, while Mini-LED technology is an evolution of long-standing LED backlight technology, as the cost decreases and availability increases, the technology will help to prolong the life of LCD technology, giving some protection to the massive investments made in LCD capacity over the last 20 years. While OLED is certainly a competitive display technology, the cost of producing OLED displays remains high compared to LCD, and while OLED display quality has a number of superior characteristics to LCD displays, Mini-LEDs narrow the gap, at least from a consumer perspective. Each iteration in the saga of LED LCD backlighting has proved expensive at the onset and eventually come down to levels where it has little effect on the average price of LCD TVs.
While Mini-LEDs do have their particular cost issues currently, the fact that existing process technology can be used to improve production costs gives us hope that Mini-LED premiums will become less onerous by the end of 2022. Apple’s (AAPL) careful adoption of the technology in the iPad and MacBook, and potential expansion across those lines next year will certainly help to give confidence to chip producers and array developers, which will increase competition and reduce costs further. While still in the early stages of implementation, we see much activity in the LED space toward such product development and dedicated Mini-LED capacity expansion backed by both display and LED producers who see the technology as a way to extend LCD investment lifetime without massive spending, while we expect consumers will be happy to see another level of LCD display improvement, as long as it doesn’t cost much more than they are used to paying for pre-Mini-LED technology.
All in, while Mini-LED technology is an evolution of long-standing LED backlight technology, as the cost decreases and availability increases, the technology will help to prolong the life of LCD technology, giving some protection to the massive investments made in LCD capacity over the last 20 years. While OLED is certainly a competitive display technology, the cost of producing OLED displays remains high compared to LCD, and while OLED display quality has a number of superior characteristics to LCD displays, Mini-LEDs narrow the gap, at least from a consumer perspective. Each iteration in the saga of LED LCD backlighting has proved expensive at the onset and eventually come down to levels where it has little effect on the average price of LCD TVs.
While Mini-LEDs do have their particular cost issues currently, the fact that existing process technology can be used to improve production costs gives us hope that Mini-LED premiums will become less onerous by the end of 2022. Apple’s (AAPL) careful adoption of the technology in the iPad and MacBook, and potential expansion across those lines next year will certainly help to give confidence to chip producers and array developers, which will increase competition and reduce costs further. While still in the early stages of implementation, we see much activity in the LED space toward such product development and dedicated Mini-LED capacity expansion backed by both display and LED producers who see the technology as a way to extend LCD investment lifetime without massive spending, while we expect consumers will be happy to see another level of LCD display improvement, as long as it doesn’t cost much more than they are used to paying for pre-Mini-LED technology.
Mini-LED Automotive Backlight Array- Source: Lextar
17.3" Mini-LED Notebook Backlight Array - Source: Lextar
34" High Brightness Mini-LED Monitor Array - Source: Lextar
65" High Brightness Mini-LED Backlight Array - Source: Lextar
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