​by issing new shares and using the cash to buy a controlling interest in Hefei Visionox Technology Company (pvt) a company in which it currently owns an 18.18% stake.  While this sounds a bit like the company buying itself, it does have some nuance that does not seem obvios on the surface.  Visionox, the listed company, owns two Gen 5.5 OLED lines in Kunsham and two Gen 6 OLED lines in Guan, and while we included two additional Gen 6 lines in Hebei, they are not technically under the ownership of the listed company.
In fact, the 18.18% share that Visionox owns in the Hefei fab makes them the smallest owner, with Hefei Xingrong Investment Co,, Hefei Core Screen Investment Fund, and Hefei Heping Investment Co, each owning 27.27% of the Hefei fab.  It turns out that two of the three holders mentioned are state controlled, likely the original investors that provided the capital for the fab, given their location, and the third is a private investment fund that seems to be aligned with state interests. So why would it become important to Visionox to become the majority shareholder of the Hefei Gen 6 OLED fab?
It seems that the Hefei fab is the most technically sophisticated of the Visionox fabs, and the one suplying most, if not all of Visionox’s LTPO OLED display products, which we suspect is why Visionox wants actual control of the Hefei fab.  With Apple (AAPL) the biggest prponent of LTPO OLED displays, Visionox seems to be positioning itself to have more visible control as it develops its LTPO product line, and likely less control by state -owned entities.  This would make Visionox less likely to face anti-China rhetoric that might occur if it were able to become a visible LTPO supplier to Apple (or others). 
We expect that Samsung Display (pvt) and LG Display (LPL), both of whom are providing LTPO OLED displays to Apple would somehow bring in the ‘;state’ issue, should Apple qualify Visionox in the future, with even China’s own BOE (200725.CH) facing considerable anti-China sentiment as it develops it LTPO capabilities to meet Apple’s requirements.  \While we cannot be sure about the motivation behind Visionox’s acquisition of control in the Hefei fab, it seems logial that if they are going to fund and develop LTPO capabilities, they would like to be the beneficiary of the potential profits, while presenting a more ‘global’ face should such issues come up in the future.

​TCL (000100.CH), the parent of the 2nd largest panel producer in China, Chinastar (pvt), announced this week that it had taken orders for 2.806 billion new shares at 3.42 yuan each (current price 3.85) in a non-public offering, raising just under 10b yuan, or $1.378b US.  Institutional buyers will be required to hold the stock for a 5 month lock-up.  The capital will be used to fund the build-out of Chinastar’s T9 Gen 8.5 LCD fab in Guangzhou, which began production in September, and will be China’s first Gen 8+ LCD fab that is devoted to the production of IT products, rather than TV panels, according to the company.  When completed, the fab wilkl have capacity for 180,000 Gen 8.5 panels/month and will compete directly with BOE, who currently is the country’s largest panel producer.  Ample capital seems to remain available for the Chinese display industry…
 
 

convenience or for creating a sense of superiority, they come in and out of favor like social media stars, with some lasting weeks and others more firmly engrained in societal culture.  MIMO has been around as we know it today since the 1990’s but over the last few years has become a buzzword used in 5G commentary, and while we will not go into the extensive detail that can surround MIMO technology, we see it as an important part of understanding 5G basics for investors.
5G has brought buzzwords like MIMO and Beam-Forming to the forefront, and while they have a variety of meanings according to those in the industry and can be used to denote some rather broad technical systems, , investors should known at least the basics to better understand the ins and outs of 5G and digital communication.  2G systems were typically based on TDM (Time Division Multiplexing) where two data or voice streams were sent over one channel by separating each conversation into ‘chunks’ that are sent over the channel in alternating sequence, essentially taking turns, with a synchronization channel making sure the receiver puts them back correctly.  3G is based on spread spectrum technology, where the data is broken into ‘chunks’, with the chunks being spread across frequencies rather than by time, and reassembled by the receiver, making them less susceptible to interference.
4G uses  OFDM (Orthogonal frequency division multiplexing) that encodes the data on a number of carrier streams at different frequencies that carry the data in parallel streams.  They are reassembled at the receiver using sophisticated algorithms and help to diminish what is called multipath interference, where some data ‘chunks’ that make up a signal take a slightly different path than others, due to atmospheric issues or other reflective surfaces, and reach the receiver at different times.  5G is a similar technology that uses higher frequencies that allow greater bandwidth. 
As these technologies developed commercially, antennas, which were typically a device able to receive a broad spectrum of signals, such as those described above.  By expanding the number of antennae and focusing each on more specific frequencies, the accuracy of transmission is increased, and the ability of retransmission (tower to tower) is also increased, closer to a mesh system where all points would talk to all other points.  MIMO stands for Multiple In Multiple Out on a general basis, and was an outgrowth of the evolution from 2G’s 1T1R (One transmitter, One Receiver) set-up that eventually became 2T2R and now 4T4R, describing the number of transmitting and receiving antennas used in base stations.    Wireless LANs use MIMO, which allows for more data streams and therefore faster throughput and some smartphones have moved from 1x1 (one sending antenna and one receiving antenna) to 2x2, with an increasing number of high-end smartphones now including 4x4 MIMO internal systems, which should give them a transmission speed advantage over less sophisticated smartphones as long as the carrier is using MIMO.
As can be seen in Figure 4, the latest configuration takes MIMO one step further adding multiple antennae configurations that multiply the ability of such systems to give data multiple receiving points to accept data, giving  such systems a better chance that the data ‘chunks’ will arrive intact at at least one of the multiple receiving antennae before being reassembled.  This coupled with the increased bandwidth, speed, and lower latency of 5G continue to improve voice and data transmission and work toward a migration toward higher 5G frequencies such as those used for mmWave.  As mmWave signals are more subject to distance and blockage issues, the use of MMIMO helps to create multiple paths for transmission over such systems and will bebefit users as the technology develops further.
There is a cost to pushing MMIMO down to the mobile level, and that is the increased cost of multiple antennae systems and the physical space they take up in smartphones, which are extremely space constrained.  That said, as the trend toward multiple cameras slows, freeing up valuable internal real estate MIMO phones will migrate further down the smartphone value chain and costs will decline, the trade-off being one less camera, that is rarely used, against faster and more reliable communication, which is what smartphones are supposed to be all about…

We are taking this pre-holiday Friday off to do some holiday shopping, however we must note that the NFT world was taken by surprise yesterday when former President Trump made what was thought to be an announcement as to his 2024 running-mate, but turned out to be the announcement of a series of Digital Trading Cards showing the former president as a variety of characters.  The collection consists of 45,000 NFTs[1] that sold for $99 each, with none of the cards having more than 20 copies, and some limited to as few as one copy. The buyers are not able to select the cards they are buying as they are randomly chosen upon purchase.
Then there are the ‘deals’ that go along with Trump card purchases as a sweepstakes event.  These are taken from the promotion on the “Collecttrumpcards.com” site, with the details added by us, along with the stated value, which is only given in the detailed sweepstakes rules:

• Really Big Prize – Gala Dinner with Donald Trump at Mar-a-Lago including: ($75)

The finest dinner prepared by a top chef
The presentation of D. Trump videos, photos, and footage
Music playing throughout the evening
A branded Trump 45 Wine glass, that you can take home
Plenty of fantastic photo opportunities
Note: The sweepstake details point out that this is a 2,000 person dinner

• Meet & Greet with D. Trump ($0/Priceless)

             Exclusive meet & greet for cocktail hour at Mar-a-Lago with D. Trump
             A chance to chat with the former President and ask questions
Note: The sweepstake details point out that this is a 200 person group that lasts for 30 minutes

• Individual Meeting with D. Trump ($0/Priceless)

             An individual sit down with the former President at Mar-a-Lago in his private club
             “Ask all the questions you want and get all the advice you can handle from the man who changed America”
Note: The sweepstake details point out that you get 20 minutes

• Golf with D. Trump   ($300)

             Play for 1 hour in a foursome with D. Trump at his Palm Beach golf course
             If you are not a golfer you can trade your prize or sell it.

• Zoom Call with D. Trump  ($0/Priceless)

             Ask all your questions over Zoom (10 Minutes)

• Group Zoom with D. Trump  ($0/Priceless)

             Lucky winners will be able to join this exclusive group meeting
             Note: The sweepstakes details that the call will be with 2,000 participants and will last 20 minutes with no guarantee that any questions will be answered

• Hand-Signed Memorabilia  ($100)

             Signed photographs and other memorabilia sent directly to you

• Gold Digital Trading Cards   ($100)

             There will e a limited number of rare Gold Edition cards that are digitally signed by D. Trump with an actual video of him signing your gold edition collectible.

• Books!    ($75)

             You could win a copy of one of D. Trump’s books, with some being signed by the former President (Specifically “Our Journey Together”)

• But Wait there’s More!

             18 holes at the Trump International Golf Course (D. Trump will not be in attendance)   ($575)
             Dinner for two at the Trump Hotel in Las Vegas (D. Trump will not be in attendance but you will be treated as a ‘friend’ of the President)    ($250)
             Dinner for two at Mar-a-Lago (D. Trump will not be in attendance but again you will be treated as a ‘friend’ of the President)    ($250)
             Dinner for Two at Trump Tower in NY (D. Trump will not be in attendance but his office will call to make sure they know you are family)     ($250)
             Mystery Prizes of Trump Memorabilia
As part of the initial offer, if you were to purchase 45 cards, you get 45 entries into the sweepstakes shown above PLUS a guaranteed dinner with D. Trump.  We do note that according to the sweepstake rules, you can enter without having to purchase anything as long as you are over 18 and not living in Balkans, Belarus, Burma, China, Cote D’Ivoire (Ivory Coast), Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, North Korea, Russia, Sudan, Syria, Zimbabwe, and the Crimea, Luhansk and Donetsk regions of Ukraine, or a family member of the sponsor, by send a SSAE to the location shown below in Newark, NY.


[1] 1,000 will not be sold in this offering

While the Trump campaign or the Trump organization receives nothing from the sale of these digital cards, they were licensed to NFT INC LLC, a company that shows two addresses in Park City, Utah, both in strip malls that don’t seem to show the company in any listings but have UPS stores containing rentable mailboxes.  Not that we are saying anything untoward about the company, only that they don’t seem to be well known.  That said, NFT Inc LLC has licensed what we assume are the rights to Trumps image from CIC Digital LLC, aka CIC Ventures LLC, a company set up last year that has the same address as Trump’s Golf Course and is run by Nick Luna, Trump’s former White House Trip Director, and John Marion, one of Trump’s former lawyers.
All in, this is obviously a deal sanctioned by the former President, who is the ultimate beneficiary of the licensing fees, and likely other incentives (perhaps the 1,000 NFTs that are held from the sale?), and while Trump has mentioned his dislike for the crypto world on occasion, Melania Trump’s NFT collection might have pushed him toward this release.  Based on what we can see on Opensea, the most recent sale was of card #28389, which sold for $398.88, while most of the other (many) listings in the $200 - $250 range.  We took a few samples from the collection as shown below.
It is hard to make any comment about this exciting glimpse into the mind of a former President of the United States, but it does give historians another way to illustrate what life was like during the Trump administration and could serve to remind us of how the former President views himself.  While it is certainly entertaining to see the levels of embarrassment that the former leader of the US can bring to himself while not being embarrassed himself, but it does little to help the image of the US as a leader among Democratic nations.  JOHO.
 

https://twitter.com/i/status/1603442427473571841
​

Mobile communication has become an increasingly important part of human existence, with mobile data traffic growing at a 27.2% CAGR[1] between 2019 and 2028.  That traffic will increasingly be using 5G technology, and while this year saw a slowdown in 5G expansion on a global scale, as an inflationary cycle stunted carrier expansion, over that same period 5G mobile data will see a CAGR of 67.4%.  While, as consumers, we are used to the characteristics of 2G, 3G, 4G, and more recently 5G mobile communication, those same transport protocols and networks can also be used for FWA, or Fixed Wireless Access, the wireless equivalent to copper or fiber typically used to connect residential or commercial customers.
FWA, in most cases, is based on 3G or 4G technology, with relatively new 5G services piggybacked on existing infrastructure (NSA 5G), but as 5G transitions to SA 5G (Standalone) network architecture, its advantages over 4G LTE become more apparent and its applications expand.  At the same time FWA applications will also transition to 5G, adding to the benefits of FWA, and as can be seen in Figure 2, FWA as a percentage of total data traffic, grows.  We note that while the growth of Mobile data traffic for the combined 2G, 3G, 4G, and 5G modalities is declining, much of that comes from the elimination of 2G and 3G technology and the adoption of 5G on a global basis, given the much higher data rates that 5G is capable of.  That becomes evident when looking at carrier data in the US, where T-Mobile (TMUS) saw its user base for its FWA service reach over 1.5m users in 2Q this year[2], for a ~72% CAGR, while AT&T (T) saw 4.7% growth and Comcast (CMCSA) saw only 0.6% during the same period, both of whom offer fiber or cable only service.
There are issues that can hinder the use of 5G for FWA, particularly the necessity for higher tower density for 5G, which is certainly an issue for carriers, and this has even limited T-Mobile’s seemingly rapid growth of its FWA services.  Growing the availability of 5G FWA, meaning carefully mapping tower building against potential customers, and limiting new FWA customers to match available local bandwidth, is necessary so as not to reduce the benefits of 5G’s low latency and high speed transport.  Therefore, we expect FWA, especially the 5G component of FWA, to grow at a more measured rate, but given the benefits of 5G technology, and its ability to reach customers where cable or fiber is not economically feasible, we expect FWA to continue to grow both in its user base and in the percentage and net amount of data traffic it can move.  Local and global economics will certainly have an effect on FWA growth, but in the long-run we believe the benefits of 5G FWA will allow it to continue to gain an increasing user base, especially in areas where only one hard-wired carrier is offered.


[1] 2019 – 2028 – Source: Ericsson Report 2022

[2] The service was initiated in early 2021.

​Samsung Electronics (005930.KS) is expected to add a 77” model to its current QD/OLED TV models as it continues to improve yield at its first QD/OLED fab in Korea.  We expect Samsung to show the new size to potential customers at CES in January, and possibly make an announcement to the general public about its availability.  Samsung was particularly low-key when it introduced the initial QD/OLED sets in January of this year, likely due to the low yields that affiliate Samsung Display (pvt) had been seeing during the early days of production, and while the intro of this new size might see a bit more enthusiasm from the company, SDC’s capacity is still limited to one fab, which does not support Samsung’s need for higher volumes that would allow QD/OLED to become a substantial part of the Samsung TV set line.
That said, we expect that the decision regarding potential QD/OLED capacity expansion will be made soon, and while the TV set business is facing the same economic wet blanket that is covering much of the CE space, the ultra-large TV space, where the 77” model would fall, continues to show y/y growth.  While the commitment to additional capacity during a weak CE cycle is a risky one, Samsung Display has made such bets before, and while the decision could be postponed for a quarter or so as the global economy struggles with inflation, we expect SDC will convert existing but idle capacity to QD/OLED in 2023, .
Samsung needs a large panel OLED TV offering to compete against LG Electronics (066570.KS), and while Samsung has considerable offerings that are LCD, Quantum dot enhanced LCD, and Mini-LED/QD, the progress on Micro-LED commercialization is still out of the price range of rank and file TV buyers.  Samsung has priced its QD/OLED sets well, and we would expect the 77” model to be priced ~$3,000 initially, but expect the more steady-state price range to be between $2,500 and $2,700 90+ days after the release, making it a viable competitor to LG’s “C Series” OLED TV.  Samsung seems to be warming up to considering the QD/OLED line as a meaningful part of its overall TV line, but until a capacity expansion decision is made, we expect the Mini-LED/QD line will be the promotional favorite heading into next year. 

​The Public Company Accounting Oversight Board, formed as part of the 2022 Sarbanes-Oxley Act, has the mandate of auditing public companies to protect US investors from potential accounting and malfeasance issues that might not be disclosed by foreign companies.  Back in 2020 the board began efforts to audit the over 150 Chinese companies that were listed on US exchanges, but met with considerable resistance from the Chinese government, which has passed legislation in 2019 that barred the transfer of financial data outside of the country.
The US government passed the “Holding Foreign Companies Accountable Act” to put teeth n its negotiations with the Chinese government over the potential audits, but a year ago the board issued a statement that they were still unable to gain access to the financial details of the Chinese companies listed in the US, and steps would be taken to force those companies to comply or be removed from US listing.  Negotiations continued through much of this year, but it seems that the Chinese government relented, and in September board auditors were allowed to begin the process of auditing the companies involved.
This has allowed the board to issue a statement rescinding it ‘non-compliance’ statement made last year, although noting that they were not stating that the audits were complete, but that they have been given the access requested, after the Chinese government requested time to review the financial data and redact the names and addresses of factories, customers, and suppliers before their release.  There are still a few hurdles that have to be met before the board can make a certification of full access to the SEC but at least in this instance it seems some progress has been made.  As of the end of September there were 262 Chinese companies listed on US exchanges, with a market capitalization of ~$775b. 

You thought this was going to be about some way in which liquid physics would influence the current state of the world of consumer electronics, but its not.  It is about a startup that is about to release what they say is the world’s ‘first truly wireless TV’ to the general public.  That statement is a bit misleading, as portable TVs have been around since Philco (PHG), who was originally known as a battery company, released the Philco Safari in 1958, a 15 lb. battery-operated TV ($5.25 battery extra) that sold for $250, which was more than most console TVs at that time.  Sony (SNE) followed with a 13 lb. portable TV in 1960 ($29.95 battery extra), and while the Sony set was discontinued two years later, Sony reappeared with the more successful Sony Watchman line in 1982, but was sidetracked when digital broadcasting made  it necessary to have a converter for the new TV bands.

​There are still a number of portable TVs currently available, typically used for tailgating or camping (?), that run between 7” and 16” (between $100 and $150), that run on internal or external rechargeable batteries, although brand names here are far from recognizable.  LG Electronics (066570.KS) released the ‘StandbyME’ portable TV late last year, which is a bit of a reach in terms of portability, as it is a 27” FHD LCD TV on a stand that weighs 38.6 lbs. (including stand) and has a 3 hour battery life.  It can be moved anywhere (indoors) and while it has no tuner of its own (cannot receive OTA broadcast), it does have phone mirroring, which means you can watch streaming services on the TV through your smartphone.  It sells for $1,000.
However, the company that is about to” revolutionize TV as we know it”, a start-up known as Displace (pvt), says they will change the idea of TV with their 55” 4K, lightweight (under 20 lbs) system that runs on hot swappable batteries (4 included) that are said to last about a month when using the TV ~6 hours/day.  But the company takes the idea of a portable TV further as the set mounts to any flat surface with a proprietary vacuum lock system that is easily activated just by holding the set close to the wall and giving it a slight push (company’s words).  But wait, there’s more…  In order to make the set truly wireless (there are no HDMI or USB interfaces, the company also did away with the remote control, opting for a system that recognizes hand gestures, voice commands or touch to control the set.  The company also notes that multiple sets can be mounted together to form a 110” video wall.
Without seeing the set or the price, this is a lot to absorb, and knowing that the company was formed in 2022 makes us a bit vary that this release will meet expectations, but we certainly don’t rule it out.  We will be able to see the unit in early January, at which point the company will take deposits, but it seems the sets themselves will not become available until late 2023.  Hopefully there is more to this than PR, as we do remember years ago Hisense (600060.CH) showed us a fully wireless TV demo that was powered by a transmitter than ‘broadcast power’ wirelessly to the set.  It was a great idea, with applications far beyond TV, but never got out of the demo stage, and while the set described by Displace.TV runs on batteries, it would be nice to have a portable TV of high quality.

​With the US pointing a double barrel shotgun at China’s semiconductor industry, the $280b CHIPS Act and an ever-increasing number of trade sanctions relative to semiconductor manufacturing, China has little choice but to respond, and leaks about the potential for the Chinese government to be readying a semiconductor investment package of its own are starting to circulate.  While details will likely be given early next year, thus far the supposition is that a $143b 5 year package containing subsidies and tax breaks will be announced, to offset the increasing pressure from the US. 
Current thinking is that the focus will be on China’s semiconductor equipment industry, where 20% equipment purchase subsidies will be offered, as China is already unable to purchase EUV tools from ASML (ASML), allowing them to move from more mature nodes to 7nm and below.  China’s largest semiconductor foundry SMIC (688981.CH) recently surprised the industry by announcing it had begun production at the 7nm node, without EUV, but it seems that their process, which uses DUV requires 4 passes against the EUV process, which requires one, and is therefore more costly to produce.  That said, the US government has been in negotiations with the Norwegian government over a potential ban on DUV tools to China, which would further constrict China’s ability to produce more advanced node silicon.
China’s typical brute force approach entering global markets is a bit less effective in the semiconductor space, where years of accumulated semiconductor process technology resides with Taiwanese, South Korean, and Japanese foundries, but the same was said in the display space when Chinese LCD panel producers began a government sponsored capacity expansion only a few years back, and are now the dominant force in the large panel LCD space.  While some might say that the display industry has already moved past LCD technology, making China’s dominance a moot point, it does go to show that their government funded expansion can be an industry mover, even if it comes a bit late, and while the semiconductor space is a bit more complex, the constant ‘poking’ by the US government will eventually result in China stepping up its desire to become more semiconductor independent and developing a more sophisticated semiconductor equipment industry of its own.  It might not be as technically advanced as tools from ASML, Canon (7751.JP), or Nikon (7731.JP), but if they get the job done, China will squeeze the more generic semiconductor market, as it has done in display and the LED market and will leave others to compete only at the top tier of the semiconductor market.  Sometimes the bear wins or at least does some significant damage…