OLED display panels tend to be more expensive than LCD panels, although with the unusually large price increases seen in LCD panels over the last year, the gap is narrowing.  That said, we get questions about the relative price of OLED displays and why there is such a variance in OLED laptop prices, with most references being toward the price of the OLED display itself rather than what the actual cost of an OLED based consumer device.   While there are many OLED smartphones, the differences in feature sets is enormous, making comparisons between equivalent OLED and LCD smartphones almost impossible, however as OLED displays in laptops are relatively new, we look to that device segment for more realistic comparisons.
It seems logical that the best comparisons would be those for the lowest priced laptops, given that they have the least number of features, so we looked for relatively new and inexpensive brand that offered both.  We made a simple comparison of two relatively inexpensive models released by ASUS (2357.TT) that were as close in features as we could find, and added a 3rd model (higher-end) to give an idea of what other features might be added to boost the price.  There are other OLED notebooks we could have chosen for comparison, with prices up to ~$4,000 but the ASUS OLED laptop is one of, if not the lowest priced OLED laptop we could find.
The two ASUS models we compared were the VivoBook and the ZenBook, both of which have 13.3” displays with 1920 x 1080 resolution (Full HD).  The OLED based ZenBook is slightly larger (3.6 in2), slightly (0.1”) thinner, and 3.2 oz. lighter than the LCD based VivoBook, has a larger battery (67W vs. 50W), and fewer USB connectors, along with a smaller SSD (256GB vs. 512GB for the LCD laptop).  They both run off of the same Windows 10 Home version and have the same Intel processor, GPU and RAM configuration, although the ZenBook (OLED) has a slightly better camera, which leads to the price.  The VivoBook sells for $699, while the ZenBook (OLED) sells for $799, which is an unusually low price for an OLED notebook and indicates how OLED displays are moving down the price curve not only in smartphones but also in laptops.
Taking the comparison one step further, the difference in price between the solid state drives in both models averages out to be ~$21 at the retail level (~48% higher), which would likely be lower at the higher volume levels associated with such products, so we estimate that the difference in drive capacity for the ZenBook would save ~$18.  The battery comparison is more difficult given that there are fewer direct battery replacements for these specific models, although we could trace it down to an estimated supply chain difference of $22, which would net the two dissimilarities to ~$4 higher for the OLED model..  Taking out the USB 2.0 ports on the ZenBook probably saves $1, so the net higher cost of the OLED model comes to ~$3, although we expect the cost of the OLED driver could add another dollar to the difference.  All in, a roughly $5 higher cost for the OLED model.  We have added a high-end ASUS OLED notebook for comparison.
We estimate an all-in price difference between the 13.3” LCD and OLED display is between $55 and $70 given the relatively low volumes of this OLED display size relative to LCD, which would give ASUS a $46 to $66 premium for the ZenBook, although a more realistic estimate would be $39 to $59 if promotional costs are included.  We expect ASUS allows retailers to garner a slightly higher margin on the OLED product to help with promotion, so when it comes down to the actual premium that the OLED model generates is ~6%.  Given that this is or at least is currently the lowest price 13.3” OLED laptop that sets a base for laptop OLED premium generation, with the expectation that higher priced OLED laptops generate a higher premium for the brand, given the ability to bury that premium in a greater number of features.  As the production of notebook sized OLED displays continues to ramp, we expect penetration to ramp accordingly as it did with OLED smartphone displays, and without the necessity to convince customers that OLED was a legitimate and higher quality display than LCD, which was the case when OLED smartphone displays were first introduced..

​Earlier this month we noted that Scramoge Technlogy (pvt), an Irish NPE run by Magnetar Capital (pvt), an Illinois-based hedge fund, purchased 128 (3 Korean and 123 US) patents from LG Innotek (011070.KS) for $4.4m last February as part of the company’s exit from the wireless charging business, and has filed suit for patent infringement against Samsung Electronics () in the Western District Court of Texas.  It seems that LG Innotek has added another 78 patents relating to wireless charging to the list, and given the low price for such assets, it could indicate a possible agreement that encompasses similar filings in other countries, a possible sharing of litigation profits, and potential lawsuit exclusions for LG Electronics () affiliates, according to speculation in the Korean press.  Regardless of the agreement, the continuing IP sales would assume a higher level of litigation over the charging patent family.
 

​Mini-LED TVs have not been around for long.  TCL (000100.CH) released the first mini-LED TVs in late 2019 and continues to push the technology to lower priced models in this year’s 3rd iteration, while others are just beginning to push the technology into what are usually high-end or premium TV lines.  That said, the price competition between the few TV brands that are offering commercial mini-LED sets has already begun, with each trying to offer mini-LED, along with other features at a price just a bit lower than the competition.
Samsung (005930.KS) has taken the high road with mini-LED TVs, offering its NEO QLED (released in March in some areas) for ~$2,599 (65” 4K model), while LG Electronics (066570.KS) is about to release its mini-LED line of what it says will be 10 models before the end of June.  The 65” 4K model is expected to sell for ~$2,200, with models between $200 and $400 less than the Samsung equivalents.  First mover TCL  is also expected to release its next mini-LED line before the end of this quarter, with a 65” 4K model selling for $1,698, and maintaining at least a $100 to $300 lower price point than LG across the line.  A typical ‘generic’ 65” 4K TV sells for between $333 and $1,400.
HiSense (600060.CH) is also expected to release something similar to a mini-LED TV in the 1st half of the year, but we have not seen pricing other than ~$3,500 for a 75” model.  The Hisense sets differ in that instead of using mini-LEDs as a backlight source, they use a 2K black and white LCD display to light the main 4K display.  This would be the equivalent of over 2.2m mini/micro LEDs in a backlight and should give the highest level of backlight control and therefore contrast of all systems other than micro-LEDs.  Since the cost of displays has been rising this two display system might not prove as feasible as it was when LCD panel prices were declining, but HiSense has not abandon the technology yet.
With pressure to contain costs squarely on the TV brands in the mini-LED realm, the competition between brands has already begun, with TCL making sure that the two South Korean brands are relatively limited in the premiums they can charge for mini-LED TVs.  Likely working at lower margin levels than LG or Samsung, TCL has been at the mini-LED game longer than both from a commercial perspective, and while both Korean competitors are developing their own mini-LED supply chains, likely including affiliated companies, TCL also has access to China’s vast LED industry and will no doubt keep up the price pressure regardless of other features offered by Samsung and LG.  While LCD based TV (which mini-LED TVs are) prices continue to rise, the premium TV segment is becoming more valuable to TV brands, which implies an expansion of mini-LED TV set offerings, but pressure from TCL, and eventually other Chinese TV brands, will favor consumers, who will see mini-LED models continue to decline in price relative to generic LCD TVs.

​The US Department of the Treasury announced that it will postpone the effective date of the Trump Administration ban on investments in Chinese companies with ties to the Chinese military for two more weeks.  The original Executive Order (13959) was issued by then President Trump on November 12 and was to take effect on January 28.  After President Biden took office, the Treasury extended the deadline to May 27, which is where it stood until this extension.
While the current White House remains ‘deeply concerned about the matter’, the two week extension is said to give them enough time to resolve issues in the original order because it was drafted in a ‘careless manner’.  We have consolidated the Treasury list below, removing various closely named entities or subsidiaries.  While we expect the order to eventually be implemented, we do expect some changes, both to wording and named companies, with likely candidates being at least one if not all of the three Chinese carriers.
AERO ENGINE CORP OF CHINA – (state)
AVIATION INDUSTRY CORPORATION OF CHINA (state)
CHINA ACADEMY OF LAUNCH VEHICLE TECHNOLOGY (state)
CHINA AEROSPACE SCIENCE & INDUSTRY CORP LTD (state)
CHINA AEROSPACE SCIENCE & TECHNOLOGY CORP (state)
CHINA COMMUNICATION CONSTRUCTION GROUP COMPANY, LTD. (601800.CH)
CHINA CONSTRUCTION TECHNOLOGY CO LTD (state)
CHINA ELECTRONICS CORP (state)
CHINA ELECTRONICS TECHNOLOGY GROUP CORP (state)
CHINA GENERAL NUCLEAR POWER (state)
CHINA INTERNATIONAL ENGINEERING CONSULTING CORP (state)
CHINA MOBILE COMMUNICATIONS (941.HK)
CHINA NATIONAL CHEMICAL CORP LTD (state)
CHINA NATIONAL NUCLEAR (state)
CHINA NATIONAL OFFSHORE OIL CORP (state)
CHINA NORTH INDUSTRIES GROUP CORP LTD (NORINCO GROUP)(state)
CHINA NUCLEAR ENGINEERING & CONSTRUCTION CORP LTD (601611.CH)
CHINA RAILWAY CONSTRUCTION CORP LTD (601186.CH)
CHINA SHIPBUILDING INDUSTRY CORP (state)
CHINA SOUTH INDUSTRIES GROUP CO LTD (state)
CHINA SPACESAT (600118.CH)
CHINA STATE CONSTRUCTION GROUP CO LTD (601668.CH)
CHINA STATE SHIPBUILDING CORP LTD (0763828D.CH)
CHINA TELECOM CORPORATION LIMITED (CHA)
CHINA THREE GORGES CORP (state)
CHINA UNICOM (762.HK)
CHINA UNITED NETWORK COMMUNICATIONS GROUP CO LTD (600050.CH)
CNOOC LIMITED (600968.CH)
CRRC CORP LTD (601766.CH)
DAWNING INFORMATION INDUSTRY CO (03019.CH)
HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO LTD (002415.CH
HUAWEI(pvt)
INSPUR GROUP (000977.CH)
NANJING PANDA ELECTRONICS CO LTD (600775.CH)
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORP (981.HK)
SINOCHEM GROUP CO LTD (6005600.CH)
 

As we mentioned on Monday the 2021 Virtual SID (Society for Information Display) event began this week, with a variety of announcements from both suppliers and CE product producers, however it seems that there have been far more demos and prototypes shown this year than in previous years, and while that is a subjective opinion, it seems that the list of foldables, quantum dot, rollables, and mini/micro-LED videos is very similar to last year’s crop.  Not to say they are not impressive, as many are, but until they become actual products they are merely showpieces.
Here’s what a few display brands were showing:
               Tianma (000050.CH)

• 7.56” micro-LED display (active area is ~4.6” x 6”) with low-resolution (480x720) 114 ppi LTPS based system for e-books
• 7.56” flexible micro-LED display with the same characteristics as the one above, but for automotive applications
• 10” micro-LED display, which is actually two 5” micro-LED displays ‘spliced together (no visible seam) for automotive applications.
• 8.03” foldable high resolution OLED display with 403 ppi with ultra-thin glass cover.  What makes this unusual is that the pixel configuration is YYG (yellow-yellow-green), similar to what LG Display (LPL) uses for its OLED TVs.  This would imply a color filter, and unusual set-up for a smartphone display.  This display was also shown as a rollable display.
• 6.2” OLED panel with micro-lens, which are small structures etched into the display to capture and refocus light from each pixel. (Fig. 1)
• 6.39” OLED display with FOD (fingerprint on display)
• 6.39” OLED display with ‘virtual buttons’, essential touch systems built into the edges of the screen, acting as volume controls or similar functions
• A series of different size wearable (1.2” to 1.6”) OLED displays
• A series of 6.67” and 15.6” OLED displays with variable refresh rate systems

BOE (200725.CH)                                          
               Without going through the entire litany of BOE promo videos and showcased products, there was one that caught our attention, despite it being hidden away among a wide variety of LCD, QLED, and mini-LED displays.  This was a 55” AMQLED (Active Matrix Quantum Dot LED), that BOE had sort of announced at the end of last year.  From what we know, this is the first large panel display to use quantum dots as self-emissive light sources, not as color converters and represents the ultimate goal for quantum dot display development.  In this display quantum dots are electrically stimulated in the same way as OLED materials would be, and produce red, green, and blue light from individually controllable QD sub-pixels. 
As quantum dots can be produced with narrow emission characteristics, that is, very precise color, this form of display should provide improved color characteristics over all other display types.  We say should because little information has been seen about this display, other than some very basic specs, although we believe the quantum dot emitting layers are printed, which should lead to a low-cost process, again, in theory, which would not face the high volume transfer issues that face micro-LED development. 
That said, there are many hurdles that such a display must jump to bring this technology to mass production, and while we know others are pursuing similar goals with QDs, BOE seems to be the first to show what looks to be a potential commercial product, albeit still a ways away from commercial production.  Of course, such a product would have to be sampled and tested by potential customers (TV brands), at which point BOE would have to move production from what is likely an R&D or pilot line, to a mass production line if accepted, so we are not expecting anything soon, but we certainly give BOE points for bringing the technology out, at least in print.
While many different displays were highlighted on virtual site, there was no indication as to whether they were active production products or just potential offerings.  We understand that many companies don’t post availability information publicly, but without production status, it is hard to know whether they are lab versions, under production development, in ‘sample’ mode, or in mass production.  We miss the days when you could actually ask questions of booth staff, who were sometimes excited enough about the product to give you timelines and similar information.  If we posed as potential buyers now, we might be able to get some detail, but that would happen only once and then we would lose the ability to ask even simple questions.  Looking forward to the day when we can return to live exhibitions…

Due to an outbreak of COVID-19 in Vietnam’s Bac Giang Province, both Hon Hai (2317.TT) and Luxshare (002475.CH) have been asked to temporarily close their local factories.  While not all of Hon Hai’s factories in Vietnam have been affected, the company did acknowledge that some had been closed at the request of the provincial government, which included those in four industrial parks.  While much of what is produced at the Foxconn factories is for the CE industry on a broad basis, the Luxshare factory is, an Apple (AAPL) assembler, and is primarily dedicated to its products.  No timeframe has been given for the length of the shutdown.

​Yesterday we noted that Chinese OLED panel supplier Visionox (002387.CH) had received a letter of Inquiry from the Shenzhen Stock Exchange, requesting details as to the controlling interests of major stockholders, after the company was accused of not disclosing certain share transactions by a fund manager.  It seems that Visionox was unable to contact the former controlling shareholder quickly enough to meet the deadline and has asked for an extension to further answer the requested questions.
According to the company’s response to questions concerning the transfer of shares (5-14-21) Tibet Zhihe Capital Management (pvt), the former largest (and controlling) shareholder, transferred a portion of their holdings (11.7%) to the Hefei Municipal government to pay off debts, likely from ownership of a land development company that defaulted on $825m in loans, which will reduce their holdings to 18.43% and make the local government the controlling shareholder of Visionox with a 21.3% stake.  The transfer price of the shares was not disclosed.  While the stock exchange asked for verification that ‘all disclosures had been disclosed’, we are still not sure whether this has become a question of ownership or of information about the transfer that was not disclosed to the public.  While the stock exchange request was seemingly stimulated by a request, it will be interesting to see if any additional information is disclosed by Visionox.

We have seem a number of articles, primarily in the Asian press concerning a new COVID-19 outbreak in Taiwan.  As Taiwan is an essential part of the semiconductor supply chain, those concerns are firing up the fear that there could be restrictions or lockdowns that further exacerbate the semiconductor shortage that is plaguing the consumer electronics space and digital economics generally.  We understand the need for concern over the COVID-19 outbreak in Taiwan, but it is easy to overstate the problem when looked at in conjunction with COVID-19 data from the US. In fact, we are unable to accurate chart the comparative data as the scales are so different so we present them individually, but most important is noting the y axis which represents the number of individuals in each case.

Based on Fig. 1 the outbreak in Taiwan is quite significant, over 12 times the peak back in March of last year and the breakout in the cumulative rate, in itself, is also concerning (Fig. 2), but a bit more perspective is gained when viewing Fig. 3, which shows the number of cumulative cases relative to 1M in population. With a total population of ~23.85m, even with the current spike, the cumulative infection rate in Taiwan is just a bit of 84 for every 1 million residents.  In the US the picture is quite different, even with the very effective vaccine programs being promoted by the government.  We have seen no new significant spike in new cases (Fig. 4) and the slope of the cumulative case rate has remained fairly consistent since the beginning of this year, but, in our view, the key metric is the new case rate/million population, which in Taiwan, even with the current spike, is 14 new cases/day/million population, while in the US that same metric is 161 new cases/day/million population. 
While the headlines gain eyeballs, the data shows that while certainly concerning, the outbreak in Taiwan is not as overwhelming as some might make it sound, and even if restrictions for the general population are reinstated, we do not expect they will further limit semiconductor production in Taiwan, especially given that the semiconductor industry in Taiwan is more than 30% of total exports and generated ~$115b in output for the country.  However, a recent note in the Taiwan press indicated that ‘industry sources’ were expecting a delay in the production of the mini-LED backlights needed for Apple’s (AAPL) new MacBook Pro because of the virus outbreak, pushing out the release into 4Q or even 1Q ’22 due to the resurgence of the virus, although others indicate that it is more of a yield problem than a viral one.
Taiwan Semiconductor (TSM) certainly the islands largest semiconductor foundry, has started work-at-home rotational scheduling for certain teams, as has UMC (UMC), and ASE Technology (3711.TT), and those companies where recent infections have been found have disinfected restricted some domestic and cross-plant travel, but the main prevention measure is returning to the rotational work at home system mentioned above. And is being instituted by most Taiwanese manufacturers, particularly those in major cities.  Outbreaks are a reality of any highly communicable disease and can be controlled if acknowledged quickly, which seems to be the case in Taiwan, as new vaccinations in Taiwan jumped from ~2,000/day to about 16,000/day over the last 10 days.

As part of a survey that gauges customer satisfaction with wireless carriers, the American Customer Satisfaction Index, run by the University of Michigan, collects satisfaction data for smartphones.  On an overall basis, of the four brands on the survey, Samsung took first place in 2021 over Apple, albeit by just one of over 80 index ‘points’, capturing 1st place after Apple’s 2020 leadership..  Samsung also captured 6 of the top 10 individual ‘satisfaction’ slots in the survey, but took 12 of the 25 survey ‘satisfaction’ slots, while Apple took 13..  No other brand made it into the top 25 in the US.  Take the data for what its worth given how subjective ‘satisfaction’ might prove to be.

​ST Microelectronics (STM), one of Europe’s largest chip producers has notified customers that it will be raising prices by an undisclosed amount as of June 1.  Citing material cost increases and ‘more aggressive commercial terms’ from suppliers, the company will notify customers as to the details of the increase through the salesforce.  STM now joins a multitude of other semiconductor front and back-end suppliers who have raised prices, either as a result of actual cost increases or as a product of demand allocation.  The company raised prices on January 1 of this year.