​BCDtek (pvt), aka Coreview, aka Shenzhen Xinshijia Semiconductor Technology, has announced $970m project to develop a 12” micro-OLED display line, likely in Shenzhen, China.  The company specializes in silicon-based OLED micro displays, currently producing 0.4” (1024x768), .06” (1280x1024), and 0.97” (1920x1080 micro displays for use in AR/VR and HUD systems and drivers for those products.  While the company does not specify how the project is being financed, BCDtek, which was formed in 2020, was originally funded by Advanced Micro Fabrication Equipment Company (688012.CH), one of China’s largest Semiconductor and LED tool vendors, that itself was funded by Sunic Systems (171090.CH), Qualcomm (QCOM), Goldman (GS), and a number of VCs.
We note that Jade Bird (pvt), Shanghai based producer of micro-LED displays and Micro-projectors has also bee building new capacity, and had recently capped a $92m project in Hefei that is expected to be able to produce 120m units/year when fully built out, which we expect will begin production in 1H ’23.  Jade Bird currently produces three mono-color 0.13” Micro-LED displays with a resolution of 640x480 with extreme high brightness @5,000ppi.
China has been very active in developing advanced display technology projects, with a number of ventures being funded both by the government, private industry (local and foreign) and VCs in China, going back a number of years.  The projects range from Micro-OLED production and driver facilities, to Micro-LED process development and small scale production lines, with secondary larger projects behind them.  China’s largest panel producer BOE (200725.CH) began investing in Micro-OLED back in 2017, developing a line with a $170m investment, and Olightek (pvt/state) and US based Kopin (KOPN) both contributed to the project.  Visionox (002387.CH) has a subsidiary that has a Micro-LED pilot line that began prototype production last year, showing a 300+ppi 1.84” sample this year, and TCL (000050.CH) announced a 2.02” VR oriented Micro-LED display and a TCL subsidiary released holographic waveguide based Micro-LED full color display late last year, and both eMagin (EMAN) and Kopin have been developing their own versions of Micro-OLED displays.
Samsung Display (pvt) and Samsung Electronics (005930.KS) have been particularly quiet about their Micro-LED and Micro-OLED plans outside of their TV and monitor applications, but we know that part of the development of SDC’s QD/OLED displays involves the potential development of nano-rods, Micro-LED structures that can be grouped into very small ‘clumps’ for high density Micro-LED displays along with quantum dots for color conversion, but as Samsung seems to have little interest in competing in the VR/AR world, at least at this point, but we find it hard to believe that SDC is not working toward producing a Micro-OLED high resolution, high brightness display for customers given its expertise in RGB OLED display production.  All in, while both Micro-OLED and Micro-LED display production is still in the early stages of development, particularly Micro-LED, China is certainly looking to become a major player in the space, we expect with the idea of creating at least an even playing field with South Korean, Taiwan, or Japanese display producers, and not having to spend years trying to catch up with other producers.  Capital, even in this more difficult environment, does not seem to be an issue, with the stumbling blocks more toward finding more standardized processing techniques than finding applications or financing.

​The Korea Display Industry Association, trade industry group that represents display industry infrastructure, including panel producers, equipment suppliers, component manufacturers, and raw material sources, is going to build a number of centers that will house 18 types of equipment that will support the development and testing of Micro-LED products, especially for small and medium sized businesses.  The project will cost $14.8m and will be supported by Electronic Display Industrial Research Association of Korea, Korea Photonics Technology Institute, Korea Electronics Technology Institute, and Korea Automotive Technology Institute, along with the Ministry of Trade, Industry & Energy.
The objective is to foster the development of a Micro-LED structure that will support large companies (such as Samsung and LG (066570.KS)), without forcing them to develop the entire substructure needed to commercialize the technology, particularly some of the basic components.  Officials at KDIA admit that China and Taiwan are further along in developing such an infrastructure and are looking to overtake regional competitors, despite their command of the LED space. 
All of that said, much will depend on the commitment from Samsung and LG toward the technology, and in that it potentially competes with Samsung’s small panel and LG’s large panel OLED businesses, such development can be a double edged sword.  At least for the time being the cost of producing Micro-LED displays is high enough that real consumer level commercialization is years off, but we expect Korea sees Micro-LED as a viable product in some form down the road and will try to ‘out-invent’ Taiwan and China.  China has capital and Taiwan has a well-established relationship with Apple (AAPL) toward Mini-LED and potentially Micro-LED, so it will be difficult for Korea to gain the upper hand from a volume perspective, but we expect the underlying principle is to create an infrastructure that can feed the profitability of Samsung and LG, without relying on China or Taiwan, and letting the others battle it out for share in what is a nascent market currently.  Its not going to be an easy battle as a quick search of IP on Micro-LEDs will reveal, with much of it coming from Chinese sources.  The playing field here is unusually level.

​We have mentioned Samsung’s continuing foray in commercializing Micro-LED TVs, with the most recent innovation being the impending release of their 110” Micro-LED based TV to Chinese residents.  The promotion is being done through JD.com (JD) with the device officially offered on June 18.  Despite the price of $156,145 US (1,049,999 yuan) more than 1,500 folks have signed up for an appointment to see the set, which has 4K UHD resolution, a 120Hz refresh rate, supports HDR10+ and has a peak brightness of 2,000 nits (more likely ~1,600), which is about twice that of other types of high-end TVs and far brighter than typical sets which are ~300 nits.  

​Samsung Display (pvt) likes to hedge its bets.  While it is in the early stages of promoting and producing its QD/OLED technology, it has been researching the development of nanorods, which we first mentioned back in 2020 as a way for the company to offset the use of a fluorescent blue emitter in its QD/OLED displays.  Nanorods are small structures that are ‘grown’ using the same materials used for LEDs, and as the direction of the growth can be controlled, these structures are grown as rods, which are bunched together to form a light source, in this case a blue one.  The nanorods generate blue light which is then converted into red and green via quantum dots.  While that sounds relatively simple, getting the nanorods, which are less than 1um wide to stand up next to each other is a bit like herding cats, they tend to go in every direction, so Samsung is using a process called dielectrophoresis, similar to the process used to separate platelets from whole blood, which aligns the rods by using an electric field.  The process lines up the rods vertically, which represents a major step toward the commercialization of the process.
That said, the process is still under development, as regulating the number of nanorods in each sub-pixel is key to maintaining brightness consistency across the display, and that is just one of the issues that face SDC during the nanorod development process and expectations that SDC has solved most of the nanorod issues last year gave confidence to some that SDC would move the technology toward the development of a pilot production line this year.  It seems that SDC has decided to postpone the construction of the nanorod production line and has sent back the team that was to implement the new line to their former positions and returned the project to the R&D level.
SDC had originally planned to produce nanorod based displays sometime in 2024 or 2025 however the line postponement seems to have pushed that back a year or so, which might affect the plans of parent Samsung Electronics (005930.KS), who is looking to augment its TV lineup with more premium products, which nanorod displays would have supported.  While SDC has built a 30,000 sheet/month fab for its QD/OLED display production, thyat capacity represents only a small portion of what Samsung Electronics would need to make the technology a featured product, and while the initial reception to QD/OLED technology has been positive, without some sort of capacity expansion QD/OLED would have to remain a niche product against LG Display’s OLED TVs, which are expected to see between 9m and 10m units shipped this year.  Perhaps the postponement of the nanorod project foretells a decision by SDC to expand QD/OLED capacity, but no announcement has been made as of yet, “You are burnin’ daylight”

Samsung Electronics (005930.KS) is among the few companies with commercial Micro-LED product, one intended for what would have to be considered public displays.  To understand the size of these displays, the graphic below shows their size relative to an average height person however Samsung also considers these displays as ‘luxury’ personal viewing platforms for those who want the ‘ultimate lifestyle experience’, including using these displays for artwork when not in use, for a home office, and of course for entertainment.  That said, the cost for the larger configurations run above $500k, although free delivery is included, but the real purpose here is a platform that Samsung can use to refine Micro-LED technology until it become viable for actual retail displays.
To that end Samsung will soon be introducing the next level in its Micro-LED “The Wall” product line, which will shrink pixel spacing further and therefore pack more pixels in each ‘cabinet’ from which these massive displays are made. The cabinets, which are essentially interconnected building blocks, weigh ~27 lbs, are roughly 36” long by 20” long and about 3” deep, and can be configured anyway the customer should desire, but most important to us is the pixel pitch, which is the distance between each pixel.  In very large displays such as these, the viewer is a distance away from the screen (recommended viewing distance for an 85” 4K display is 5.25’) and cannot see individual pixels, but as the resolution of TVs moves higher, the user can get closer without the image being broken up into ‘dots’.  With each new resolution iteration come more pixels and more electronics and more difficulties in producing and placing these progressively smaller Micro-LEDs, so as Samsung and others reduce the pixel pitch, we watch to see if they can hold or lower costs.
While it might not sound like a big change, the increase from earlier models is ~7x in the same cabinet space, and while that is still 1/9 the resolution of a 4K TV, typical user distances from such displays are considerably greater than would be the case for retail TV viewing, so such high resolutions are not as necessary, although the goal is to continually shrink the pixel size and pixel pitch with each new model.  Price for the new model has yet to be announced, so we cannot yet track improvements in production methods and other costs, but while “The Wall” seems to be an expensive commercial product or a rich man’s toy, it is a proving ground for Micro-LED technology and helps to establish a timeline where Micro-LED technology will become competitive with other display modalities.  As higher resolution displays do not come without a ‘cost’, we include the power consumption of each as it increases as the number of LEDs increases.

Over the last few years we have noted the difficulties in producing micro-LED displays.  Based on structures that are only a few microns in diameter, Micro-LED displays are both complex and costly, yet represent one avenue for the display space that could become the de facto standard a few years down the road.  We have spent much time trying to understand the techniques used to transfer Micro-LEDs from wafers to their final resting places in displays, but a portion of the difficulties involved in tha task of moving millions of such small devices from one location to another rest in the fact that not all of the Micro-LEDs on each wafer meet specifications, or in the extreme, might not work at all.
The only way such transfer systems can avoid moving lower quality or defective Micro-LEDs is to test each die while it is still on the wafer.  Creating a ‘wafer map’ of a 6” die for Mini-LEDs (200um) would entail examining over 100,000 die, and those LEDs are an order of magnitude larger than the target size for high resolution Micro-LED displays, so the testing has to be both rapid and accurate as any defective die that is transferred to the final substrate must be repaired at a cost far exceeding the cost to produce.  But testing does not stop there as each Micro-LED must also be classified as to a number of optical characteristics, particularly color and brightness, as mixing Micro-LEDs with different color characteristics or brightness will result in a display with uneven characteristics, which would be unacceptable to consumers.
In order to test such almost microscopic devices, very small ‘probes’ that contact each Micro-LED’s connection pads to activate it must be moved across the die, and the resulting light emission must be evaluated by a number of sensors that characterize the metrics of each die.   Such a ‘wafer map’ is shown below, which shows how each die varies as to a number of characteristics, particularly wavelength, which would refer to ‘color’.  LED test systems can use either PL (Photoluminescence) or EL (Electrical) stimulation to stimulate the Micro-LEDs to produce light , but an Israeli company, InZiv (pvt), who has just raised $10m from BlueRed Partners (pvt), a Singapore-based VC and OurCrowd (pvt) a VC platform in Israel that allows individuals to access venture investments.  The attraction of InZiv is their tool, Omnipix 2.0, which combines both PL and EL testing processes and is able to test dies down to 1um, giving very accurate data on each die.  Once that data is fed to a transfer device, only Micro-LEDs that meet specifications will be transferred, avoiding costly and time consuming repairs.
All in, while practical Micro-LED displays are still  a few years away, considerable R&D and progress is being made toward solving some of the more complex production issues, and there is little hesitation toward capital investments in companies that look like they might have an interim solution to such problems.  Last week South Korean based QMC (pvt) released a Mini-LED transfer tool that is said to have 30% better performance that Chinese competitors, while Kulicke & Soffa (KLIC) has dominated Apple’s (AAPL) Mini-LED business with its Katalyst and Luminex transfer/bonding tools, which are progressing from die transfer to multitask tools that would simplify the many steps required for Mini-LED and Micro-LED production.
https://youtu.be/zSY_qxsr5xI
 

​Samsung Electronics (005930.KS) is said to have delayed the production of its 89” Micro-LED TV, with production pushed back from May to sometime in 3Q this year.  The 101” model which the company also announced would be in production this year does not seem to have a production date as of yet.  Samsung is expected to begin production of the 99” Micro-LED it announced last year during the 2nd quarter, according to South Korean tech press and has already been producing the 110” version since last year.
Both the 99” and 110” models use PCB for control circuitry, based on LEDs that are 75um across and 125um high, however the newer models will be based on smaller Micro-LEDs that are 1/7 the volume, based on cylindrical measurements and are said to be deposited directly on a glass substrate containing the TFT backplane, rather than PCB boards, a process similar to that used by China’s BOE (200725.CH) for Mini-LEDs, which should ultimately reduce the cost.  That said, such smaller Micro-LEDs, while they allow for higher resolution displays, they are packed more closely together (.44mm for the 89” set), decreasing placement error tolerances and changing some of the characteristics of the Micro-LEDs themselves, particularly red Micro-LEDs. 
While we don’t know if the delay is related to the production of the smaller Micro-LEDs, the characteristics of those LEDs themselves, or the potential changes to the substrate of TFT configuration, we expect it will make little difference to Samsung’s TV sales and these sets are quite expensive and relatively few units are sold to consumers, but while Mini-LEDs are an extension of existing LCD technology, Micro-LEDs are not and will require far more R&D and interim modifications that existing LED based products.  That said, if the challenges of developing cost effective Micro-LED displays are eventually met, they have the potential to change the display industry over time.  Of course, many will (and have) predict the demise of existing display technologies, as they did when OLED displays began to appear on smartphones as far back as 2003, and again in 2005 when Samsung released its 21” OLED TV, and again when both Samsung and LG (066570.KS) showed 55” OLED TVs at CES in 2012, and while OLED has certainly become an integral part of the display industry, it takes time to move an industry with such high capital investments built into each company.   “I was taught that the way to progress was neither swift nor easy.”  Marie Curie

​Ennostar (3714.TT) has indicated that it will issue 70m shares in a private placement to finance the construction of a new 6” Micro-LED wafer fab.  67.25m shares of the placement will be purchased by AU Optronics, who holds a board seat at Ennostar and 2.75m shares will be purchased by Innolux (3481.TT) (no board seat).  The price will be determined based on either the average closing price 30 days before the issuance or the average of the 1st, 3rd, or 5th day closing price prior to the offering, but not less than 90% of those values.  AUO will hold a 17.31% stake in Ennostar when the deal is closed
We note that AUO and Ennostar, through their relationship with Apple (AAPL) have been working toward the development of Mini-LED and Micro-LED processes to further commercialize those technologies.  We believe Ennostar sees further commercialization of the technology and is building out capacity to develop a Micro-LED product line that can be sold to CE companies.  There are still a number of significant bottlenecks and costs associated with the production of Micro-LEDs that make such products too expensive for mass market devices, however as those bottlenecks are removed, the technology has the ability to change the face of the display space down the road. 
One of the more significant challenges to Micro-LED production is that red, green, and blue Micro-LEDs must be produced on separate wafers and then transferred to a new substrate.  Given their small size and vast numbers (there are 8,294,400 LEDs of each color in a 4K display), this can be a time-consuming and therefore expensive process and can lead to a number of damaged LEDs that must be repaired.  One solution that has been proposed is to produce Micro-LEDs of only one color (blue) and use red and green quantum dots to convert 2/3 of the Micro-LEDs to the proper colors.  If this can be done on a usable substrate, it would eliminate or reduce the need to transfer millions of small structures and reduce production time, cost, and damage.  That said, much of this is still in the developmental stage and we expect Ennostar to be working more toward a less mass production type product, perhaps one for an AR device where the size of the display or projector would be small, but in any case they seem to have AUO’s confidence that the project will have a positive long-term result.

​Back on 10-01-21 we noted that China’s largest LED producer Sanan (600703.CH) was raising capital through a non-public offering to finance a Mini/Micro-LED project in Hubei Province, which was expected to also see subsidies from the local government.  While the project was said to be situated in Ezhou Gedian Development Zone, where a number of Chinese semiconductor and panel producers have existing facilities, few details were given about the project itself, other than an R&D center, a line(s) for Gallium Nitride (blue or green), Gallium Arsenide (red) chips, and a line for packing the LEDs into 4K displays, little else was known.
Now it seems that Sanan will invest ~$1.24b to build the facility, which will have production capacity for 1.61m GaN (blue/green) wafers and .75m GaAs (red) wafers, and 84,000 4K mini-LED units.  Sanan is a supplier to a number of CE brands that are building out Mini-LED display product lines, including Samsung Electronics (005930.KS), TCL (000100.CH), and Apple (AAPL), although they have had issues with mini-LED qualification from Cupertino as we noted on 3/10/22.  While we do not have a completion schedule for the new lines, we expect much will fall into 2023, a year in which Apple is expected to add more mini-LED backlighting to its product lines.

While not announced officially, it seems Google (GOOG) has bought a small California start-up, Raxium (pvt), that specializes in the development of micro-LED displays, particularly for AR applications.  The company’s technology is based on light field displays, which can produce 3D images without the optics normally associated with 3D viewing.  In a normal display the image is scanned by its volume (picture the slices of a loaf of bread), while in light field displays scan radially (picture layers of a cake), allowing at least two ‘layers’ to reach each eye.  Since those images are from slightly different locations on a horizontal plane, you are able to ‘see’ around an object just by moving your position.
One issue concerning light field imaging is that they require a large number of ‘elements’ in order to capture the ‘cake slices’, some 2 to 3 times what might normally be used in volumetric imaging, and that is where Micro-LEDs come into the picture, as they are considerably smaller than typical pixels and sub-pixels, allowing designers the ability to place a greater number of imaging elements in the same space as more typical self-emitting display systems.  That said, producing micro-LEDs and placing them on control circuitry is a difficult task and makes such a process an expensive one, which is reflected in the high cost of Micro-LED displays, and those are using much larger Micro-LEDs than would be needed here.  Raxium is also developing a process for producing ‘monolithic’ Micro-LEDs (see Figure 5), essentially LEDs that are produced directly on a silicon substrate, as opposed to sapphire substrates from which they have to be transferred.
The application that we expect has interested Google here is the use of light field imaging in an AR device, which would allow someone using such a device to see a far more realistic image overlaid on the real world, and in theory, the user should be able to see more than just a ‘flat’ image overlay, being able to look ‘around’ the object to get a better perspective on how it fits with the actual image he sees through the glasses.  The example might be an engineer wearing such glasses, who was replacing a part on a mechanical device, could bring in the image of a replacement part to see what other parts might need to be removed to install it, but would also be able to see around the part just by shifting his view, rather than having to load static images of the sides or back of the part. 
This is only one application of such an AR device and there are so many more that large company’s like Google, Apple (AAPL), Microsoft (MSFT), Meta (FB), and a slew of smaller companies have been trying to develop micro-display technology that will enable AR since ~2013, when Google announced the abortive ‘Google Glass’ device.  We expect that Google sees Raxium as another step toward such a device and we expect the valuation for Raxium might be high, but if it advances Googles efforts toward a ‘revolutionary’ AR device, the cost is worth it. In the long run.