Apple Mini-LED Hints
In Mid-December we noted that Taiwan based FitTech (6706.TT) had recently been officially added to the Apple (AAPL) mini-LED supply chain as a provider of mini-LED testing tools. FitTech stated recently that it has received ‘significant’ orders for equipment for probing, testing, and sorting mini-LEDs, with shipments scheduled until September of this year and expects sales of such equipment to increase from 20% - 30% of revenue last year to 40% - 50% this year, with over 75% of 1Q sales from same. While the company mentioned that Chinese and Taiwanese LED manufacturers have been expanding production capabilities for mini-LEDs, we expect demand, or at least perceived demand, is being driven by the supposition that Apple will announce a new iPad Pro this month with a mini-LED display, which will begin production in early May.
While Apple tends not to be a first mover when it comes to new technology consumer products, they are certainly one when it comes to doing early stage R&D and even manufacturing process R&D, whether by themselves, through acquisition, or with partners, as we have noted a number of times in reference to mini and micro-LEDs. However the idea of Apple releasing a mini-LED product this year is not nearly as much of a stretch as one might think given that mini-LED technology is merely an extension of existing LED backlight technology. Of course there are issues that are specific to mini-LEDs given their small size and large numbers relative to standard LED backlights, but they are manufactured in the same way (MOCVD) as standard LEDs, allowing a supply chain that is similar, if not the same as traditional LED backlight production. This allows Apple to use existing relationships and suppliers for any mini-LED product, which reduces risk, leaving only the cost of mini-LED backlight arrays as a point of contention.
Fittech could be seeing a general increase in interest for mini-LEDs from LED producers or a more directed focus from suppliers or OEMs that are expecting to be included in the production of an upcoming Apple product using mini-LEDs. That said, Samsung Electronics (005930.KS) and Chinese TV brand TCL (000100.CH) have already released mini-LED TV product, with TCL on its 2nd generation, and LG Electronics (066570.KS) is expected to at least announce a similar product this year, although they will be careful not to overstate the technology relative to OLED.
What mini-LEDs do for all TV and CE brands that are looking for product differentiation at the high-end of the market, is give each their own twist on the technology for which there are no set standards. This allows each to vary the number of LEDs (usually the more the finer contrast control) and other characteristics to give marketing a point at which to boast about their particular product, a most important characteristic in an increasingly competitive market. If FitTech is any indication, the momentum is just beginning.
While Apple tends not to be a first mover when it comes to new technology consumer products, they are certainly one when it comes to doing early stage R&D and even manufacturing process R&D, whether by themselves, through acquisition, or with partners, as we have noted a number of times in reference to mini and micro-LEDs. However the idea of Apple releasing a mini-LED product this year is not nearly as much of a stretch as one might think given that mini-LED technology is merely an extension of existing LED backlight technology. Of course there are issues that are specific to mini-LEDs given their small size and large numbers relative to standard LED backlights, but they are manufactured in the same way (MOCVD) as standard LEDs, allowing a supply chain that is similar, if not the same as traditional LED backlight production. This allows Apple to use existing relationships and suppliers for any mini-LED product, which reduces risk, leaving only the cost of mini-LED backlight arrays as a point of contention.
Fittech could be seeing a general increase in interest for mini-LEDs from LED producers or a more directed focus from suppliers or OEMs that are expecting to be included in the production of an upcoming Apple product using mini-LEDs. That said, Samsung Electronics (005930.KS) and Chinese TV brand TCL (000100.CH) have already released mini-LED TV product, with TCL on its 2nd generation, and LG Electronics (066570.KS) is expected to at least announce a similar product this year, although they will be careful not to overstate the technology relative to OLED.
What mini-LEDs do for all TV and CE brands that are looking for product differentiation at the high-end of the market, is give each their own twist on the technology for which there are no set standards. This allows each to vary the number of LEDs (usually the more the finer contrast control) and other characteristics to give marketing a point at which to boast about their particular product, a most important characteristic in an increasingly competitive market. If FitTech is any indication, the momentum is just beginning.
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