Apple Revving Up Mini-LED Supply Chain
Late last year we noted that Taiwan based Fittech (6706.TT) had been added to Apple’s (AAPL) supplier list and was expanding their capacity by 3x – 4x, with the expectations that they would complete the expansion early this year. The company, which provides Mini-LED testing tools indicated in April that it had order visibility through September of this year, and now has noted it has orders for delivery through 1H ’22. In April FitTech stated that it has received ‘significant’ orders for equipment for probing, testing, and sorting mini-LEDs, which we assumed were from Apple or Apple’s OEMs, which for some of Apple’s expected Mini-LED products are Heesung Electronics (pvt), as the assembler, GIS (6456.TT) as the touch provider, and LG Display (LPL) as the display provider. While there has been no absolute confirmation of same, much of the talk in the Taiwan trade press seems to indicate that such is the case.
Fittech had indicated that it expected sales of LED sorting, probing, and testing equipment to increase from 20% - 30% of revenue last year to 40% - 50% this year, and is now expecting more than 50% from same, with Mini-LED orders from OEMs at least doubling this year. While the overall share of LED test, sort, and probe revenue will decrease from almost 80% last year to between 70% and 75% this year as tools for measuring 5G laser and optical functions for 5G and sensing are also growing, monthly revenue through 1H is up 55.9% y/y and set a new company record in 2Q, growing 16.6% q/q and 84.3% y/y. While we expect not all of the incremental Mini-LED revenue is from Apple, it certainly does not hurt to have become a key equipment supplier to a company at the beginning of a new display modality cycle.
Fittech had indicated that it expected sales of LED sorting, probing, and testing equipment to increase from 20% - 30% of revenue last year to 40% - 50% this year, and is now expecting more than 50% from same, with Mini-LED orders from OEMs at least doubling this year. While the overall share of LED test, sort, and probe revenue will decrease from almost 80% last year to between 70% and 75% this year as tools for measuring 5G laser and optical functions for 5G and sensing are also growing, monthly revenue through 1H is up 55.9% y/y and set a new company record in 2Q, growing 16.6% q/q and 84.3% y/y. While we expect not all of the incremental Mini-LED revenue is from Apple, it certainly does not hurt to have become a key equipment supplier to a company at the beginning of a new display modality cycle.
Fittech Sales - 2020 - 2021 YTD - Source: SCMR LLC, Company Data
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