After the Chinese gut punch the Ai industry received this week, there was another impactful event that pointed toward China’s relentless push toward becoming a world-class player in the semiconductor space, despite the US government’s steps to keep China from competing.  ChangXin Memory Technologies (pvt), China’s leading memory producer, has released its first 16Gb DDR5 chip (already produces DDR3L, DDR4, LPDDR4X, and LPDDR5).  Earlier versions (G1 – G3) were produced on 23.8nm and 18nm nodes, or the equivalent of D2y and D1x generations.  As DDR5 has surpassed DDR4 in terms of volume, this gives China there own DDR5 product that will compete against Samsung Electronics (005930.KS), SK Hynix (000660.KS), and Micron (MU).
The three non-Chinese DDR5 producers began mass production of DDR5 in 2021 and current products have a feature size between 12nm and 14nm, which gives them a three-year lead of CXMT.  However CMXT was able to skip the 17nm node step to reduce development time and is able to give the product a higher bit density than both Samsung’s and SK Hynix’s products (Micron is slightly higher).  Higher bit density allows for greater memory capacity without increasing the chip size.  The CMTX chips were found in a teardown of a Chinese high-performance solid-state drive that is the first SSD to be able to store 20Gb/mm2 by stacking 16 CMXT DDR5 chips.

​We do not make the mistake if taking this event to mean that China’s home-grown memory industry has caught up with current supplier technology, but it does indicate that China continues to shorten the lead its competitors have, even considering the roadblocks that have been put in its way.  Whie the semiconductor space represents a higher level of complexity compared to the display space, comparisons can be made, and earlier this week, the afront to the US dominance of the Ai world lends a bit more credibility to China’s overall efforts in technology.  Sometimes when you poke the bear, it bites back.

NAND Flash is an essential memory product used in a variety of consumer and enterprise products, particularly smartphones and Solid-State Drives.  It is comprised primarily of MOSFET Transistors that trap electrons within the gate of the transistor.  The presence or absence of electrons indicates a 0 or 1, and while RAM (Random Access Memory) is short-term storage, NAND is considered long-term storage and will hold its gate state without power, making them ideal of Solid State Drives.  There are only a few NAND flash producers, with Samsung Electronics (005930.KS) the leader for many years.
As the leader, Samsung tends to set the tone for the industry, and in March of 2024, a few months after a peak was reached in NAND pricing and inventory had built up to the point where an oversupply situation was obvious, Samsung cut NAND production by almost 50%.  Relatively quickly other producers followed and within a short time NAND prices stabilized and began to rise again.  Unfortunately, the slowdown in smartphone demand and a somewhat surprising weakening in enterprise SSD demand (given the AI hype) made NAND prices unable to hold early 2024 gains and a second decline began in 2H.
Samsung’s poor results in 4Q were the result of that weakness, and the company has decided to cut production at its fab in Xian, China, its largest NAND production fab, by more than 10%, from 200k wafers/month to 170k, and will also cut NAND production at two lines at its fabs in Hwaseong, South Korea.  Typically, one would expect the other NAND flash producers to follow relatively quickly but it seems that Samsung is the first to set the tone of trying to break the downward NAND pricing cycle this year, at least thus far.  While it has been a short time since Samsung signaled the NAND production cuts, we expect others to follow, however, given the continuing hype around AI and its positive influence on data center capacity and the need for SSD’s, it might prove more difficult to convince others to participate, particularly Samsung’s biggest rival in the NAND space, SK Hynix ((000660.KS), who has been and continues to add capacity for high-end NAND products.
 

NAND Flash is an essential memory product used in a variety of consumer and enterprise products, particularly smartphones and Solid-State Drives.  It is comprised primarily of MOSFET Transistors that trap electrons within the gate of the transistor.  The presence or absence of electrons indicates a 0 or 1, and while RAM (Random Access Memory) is short-term storage, NAND is considered long-term storage and will hold its gate state without power, making them ideal of Solid State Drives.  There are only a few NAND flash producers, with Samsung Electronics (005930.KS) the leader for many years.
As the leader, Samsung tends to set the tone for the industry, and in March of 2024, a few months after a peak was reached in NAND pricing and inventory had built up to the point where an oversupply situation was obvious, Samsung cut NAND production by almost 50%.  Relatively quickly other producers followed and within a short time NAND prices stabilized and began to rise again.  Unfortunately, the slowdown in smartphone demand and a somewhat surprising weakening in enterprise SSD demand (given the AI hype) made NAND prices unable to hold early 2024 gains and a second decline began in 2H.
Samsung’s poor results in 4Q were the result of that weakness, and the company has decided to cut production at its fab in Xian, China, its largest NAND production fab, by more than 10%, from 200k wafers/month to 170k, and will also cut NAND production at two lines at its fabs in Hwaseong, South Korea.  Typically, one would expect the other NAND flash producers to follow relatively quickly but it seems that Samsung is the first to set the tone of trying to break the downward NAND pricing cycle this year, at least thus far.  While it has been a short time since Samsung signaled the NAND production cuts, we expect others to follow, however, given the continuing hype around AI and its positive influence on data center capacity and the need for SSD’s, it might prove more difficult to convince others to participate, particularly Samsung’s biggest rival in the NAND space, SK Hynix ((000660.KS), who has been and continues to add capacity for high-end NAND products.
 

The January 1 earthquake that hit the coast of Japan on January 1 caused severe damage to the Northern Coast of Ishikawa Prefecture, with the epicenter about 26 miles northeast of the town of Anamizu.  This puts the Japan Display (6740.JP) Ishikawa LCD fab approximately 55 miles from the epicenter of the 7.5 magnitude quake, and while the magnitude at that distance was closer to 5.0 to 5.5 on the Richter scale, it was enough to cause a number of semiconductor fabs nearby to be shut down for inspection, particularly the Toshiba (pvt) Kaga fab, which is ~9.3 miles south west of the JDI fab, and has given no estimate for when it might reopen.  While Japan Display has not commented on the status of the Ishikawa fab, we expect automated sensors at the fab, similar to those at the Toshiba Semiconductor fab, would have triggered an automated shutdown of sensative equipment to prevent damage and closing water and gas lines.  If the impact of the quake was limited to a general shutdown, we would expect the production loss to be limited to ~2 days and the loss of some product that was on the line when the shutdown occurred, so the overall impact to JDI, at least at this juncture, is minimal.
The semiconductor fabs in Ishikawa Prefecture, in most cases, were automatically shut down and would require full inspection before restarting.  Tower Semiconductor (TSEM), which has two fabs in Ishikawa Prefecture stated, “There was no impact or damage to the buildings and only minor damage to the facilities which had no impact on operations. The dedicated staff and response teams have worked to ensure operational safety and stability. Tools requalification is underway, combined with efforts to efficiently repair any damage to fab tools and in-line materials, while utilizing all available resources to minimize any potential disruptions to manufacturing and customer service.” 
Taiyo Yuden (6976.JP), a supplier of MLCCs with a ~5% share stated, “No injuries to our group employees have been confirmed. In addition, our group's production bases, no major damage was confirmed to the building or production equipment. Production is expected to resume after equipment inspection work is through”. No word from Global Wafers (6488.TT), who has two production facilities about 100 miles from the epicenter, although local sources indicate that wafer production was halted and the lines are undergoing full inspection, with the same for Shin-Etsu (4063.JP), although silicon wafer growth using the CZ method is very sensative to vibration and can cause uneven crystal growth or stress defects.  While 4” silicon wafers can be grown in 3 to 5 days, 8” wafers can take between 7 to 14 days, and 12” wafers between 14 to 28 days, so it will take quite a while to assess the damagefacing these wafer fabs.
All in, while the damage to smaller towns in northern Ishikawa was significant, most production facilities seem to be relatively unaffected, other than the typical automated shutdown, inspection  and restart, which we expect, for those with no significant damage, will take a few days to complete.  The loss of WIP is still unknown, and in the case of wafers production, could turn out to be a bit more significant, but it would seem that production losses will be limited to a week to 10 days on average so far.  Not a disaster for the display and semiconductor industry, but not a happy new year in Ishikawa for others.

​The Dutch government’s Ministry of Foreign Affairs published the details of the “Strategic Framework for Export Controls for the Semiconductor Industry” that were proposed on 12/1/2022.  The new controls go into effect on September 1 of this year.  The framework was put in place, according to the Dutch government, for the following reasons:

1. To prevent a situation in which Dutch goods contribute to undesirable end use, such as military deployment or weapons of mass destruction.
2. To prevent undesirable long-term strategic dependencies.
3. To preserve the Netherlands’ technological leadership position.

The rules require potential semiconductor exporters to apply for an export license, which will be evaluated on the basis of the above three strategic goals and an assessment will be made as to whether any of the goals may be jeopardized.  However these measures are highly specific to technologies in the semiconductor manufacturing cycle in which the Netherlands holds a unique, leading position, such as the most advanced deep ultraviolet (DUV) immersion lithography and deposition.
The specific products cited are:
EUV Pellets & Pellet production equipment – EUV pellets are small amounts of tin that are vaporized to create the EUV light that is of the correct wavelength and intensity for EUV lithography.
Lithography steppers with a minimum feature size of 45nm or less
ALD (Atomic Layer Deposition) tools using Aluminum precursors and Titanium Aluminum Carbide – These materials are gases that are exposed to the substrate and react to form a single atomic layer that does not react to the high intensity light used in lithography and is hard enough to allow for smaller features.
Epitaxy tools based on the deposition of Carbon-doped Silicon-Germanium – This is a process where the substrate is heated and source material is vaporized, which allows it to react with the substrate a form a thin layer of material on the substrate.  Doped Silicon Germanium is used to create transistor base layers that can operate at higher frequency that more typical silicon.
Void-free PVD (Plasma Vapor Deposition) tools that are able to operate in space less than 25nm – PVD tools used is small spaces can create voids or gaps in deposition films that allow etch material to damage other layers.  Void-free tools are designed to use higher power plasmas or dual plasma systems that clean the substrate before deposition.
All software or technology needed to operate or develop such tools.
These specifics are technical, the apply primarily to ASML (ASML), the sole producer of high NA (Numerical Aperture) EUV tools for semiconductor production.  High NA means the tool can collect and focus more light in a small area, which is necessary to produce product below 13nm.  Nikon (7731.JP) also produces EUV tools (<10% share) but focuses on low-NA for the production of product at 13nm or above.  The new regulations include DUV systems (also produced by Canon (7751.JP)), which would include ASML’s Twinscan NXT 2000 and similar new products, while ASML’s EUV systems are already under licensing restrictions.  ASML issued a press release indicating that the company did not expect the new measures to have an impact on the financial guidance that was released in November of last year, and that the company’s long-term scenarios are based on global industry demand and technology trends rather than detailed locations assumptions, meaning sales to China, and China was not named in any of the government documents. 
The Chinese embassy in the Netherlands responded to the newly documented rules as an ‘abuse of export control measures” that violate trade rules and the Chinese government will implement new laws on foreign relations on Saturday that “safeguard sovereignty and rejuvenate the nation”, allowing the Communist Party leadership to set foreign policy rather than the government, and holds anyone committing acts that are detrimental to Chinese national interests legally responsible.  Last month the Chinese government banned Boise, Idaho based Micron Technology (MU) from participating in critical infrastructure projects in China, such as telecom infrastructure, networks, and power grids, as they pose a serious network security risk.

​Whether you agree that it has been warranted or not, there is no doubt that Chinese semiconductor manufacturers have been severely sanctioned by the US government, increasing the challenge facing the Chinese government’s desire to be a world leader in the semiconductor space.  While China needs US tools and technology to maintain a competitive stature in the world of advanced silicon products, it has done little but lodge complaints, at least up until last week, when China’s National Security Review Office conducted a ‘security’ review of products produced by Micron (MU) that are sold in China.
According to the review, the Micron products did not pass the review and ‘pose a major security risk to the country’s critical information infrastructure supply chain’.  According to Chinese Network Security law, operators of critical information infrastructure in China should stop purchasing Micron products.    The office added “China firmly promotes high-level opening up to the outside world.  As long as it abides by Chinese law and regulations, companies from all countries and various platforms are welcome to enter the Chinese market.”
The US DOC responded with, “We firmly oppose restrictive measures that have no factual basis., while Micron was said to have received notice from the China Cyberspace Administration concerning the review conclusion and would evaluate the conclusion and follow-up options but fell short of acknowledging that it would file a complaint, indicating “We look forward to continuing our discussions with Chinese authorities.”  As Micron is the world’s 3rd largest memory supplier, behind Samsung Electronics (005930.KS) and SK Hynix (000660.KS), with a ~25% share, and generated ~$3.3b in sales to Chinese companies last year, the impact will be felt in the US, while South Korean companies will likely pick up much of the slack.
China is certainly in a less advantageous position than the US when it comes to semiconductors, as it remains years behind the US and others in terms of semiconductor technology and is further limited as to advanced lithography equipment sanctions, and there is little chance that the Chinese government will hit its goal of 70% of Chinese demand being satisfied by Chinese producers.  That said, China’s internal production of its semiconductor memory demand has increased from ~8% in 2020 to 10.7% in 2021 and 16.2% last year., and even with the US ban on DUV tools, China can still buy tools for memory nodes 11nm or above.  Last year 28% of memory sales in China were 14nm or below, which implies that ~75% were above 11nm, which justifies considerable spending by the state and local governments to fill demand.  It seems the Chinese government is feeling sure enough that it can fill the Micron gap with other (non-US) vendors, and eventually fill it itself that it is willing to give the US a taste of its own medicine, a ban with little technology substance and lots of enmity and politics.

The US ban on semiconductor equipment being sold to Chinese fabs has a significant political component, as there are few public figures who would take the stance that China does not pose a threat to the US way of life, and while that does not justify the bans in themselves, China’s generous funding climate for the semiconductor space gives fuel to the idea that “…if we don’t stop them, they will take over the semiconductor market”, despite the fact that until recently the US government has woefully underfunded the US semiconductor production effort, giving rise to the current semiconductor issues with China.
There is some justification for the semiconductor industry’s progressive move to China over the last decade, but primarily for the semiconductor packaging segment, which is far more labor intensive than chip production, but the real driving force is that China is a huge market that needs to be fed and years ago did not have the capacity to produce what it needed.  In fact China is still (2022) a net importer of semiconductors, and saw its semiconductor trade gap increase last year to $261.7b, increasing 46.7% y/y, so despite all the hoopla over China’s potential takeover of the semiconductor space, they remain a large net importer.
That said, the downside to the US semiconductor equipment bans to China have both an obvious financial downside for those US companies that have supplied such tools to Chinese fabs in the past, and for companies that do so, but are not situated in the US, which brings up the point that the US stance must be adopted by many countries and companies that do business with Chinese semiconductor fabs and design houses, as to violate the US rules could cause political or diplomatic friction and potentially cause unwanted repercussions for same. 
But in the case of semiconductor trade rules, the rules are not always the rules for everyone, and companies like Samsung Electronics (005930.KS) and SK Hynix (000660.KS), that are major semiconductor manufacturers and have fabs in China, are looking for ways around the US rules in order to stay competitive.  According to sources in Korea, the US Department of Commerce has been in discussion with the South Korean government concerning the aforementioned restrictions, in order to come up with a ‘separate’ solution for Korean companies that have fabs on the mainland.  The US has already given Samsung and Hynix a one-year moratorium on the ban, which would have applied to both company’s fabs in China, but that agreement runs out in September, which would mean that both companies would be unable to upgrade facilities in China, which would have serious implications for both.
As the restrictions specify tools capable of producing at 16um or lower, DRAM at 18um or less, and NAND at 128 layers or more, this would put the South Korean companies at a major disadvantage as Chinese NAND players move up to 200 layers, as would be the case with DRAM, where China is already producing at 17um, and at 14um on a more general basis.  Without the equipment necessary to stay ahead of Chinese fabs, both companies would have spent billions on capacity that will eventually far behind local producers.
The separate rules are being discussed because South Korean companies are a large part of the semiconductor market, and tacitly to maintain and develop the semiconductor production in the US by those same companies, so exceptions are being developed to potentially allow the Korean companies to import US developed tools that are able to produce a level above what is being produced in China.  While this seems necessary in terms of the potential political and financial chaos it would cause if relations between the US and South Korea were to sour, it does open the door to others, particularly Taiwan Semiconductor (TSM), asking for the same or similar exceptions for its China fabs.  The US has already convinced the Dutch to join the ban, as Netherland-based ASML (ASML) is the world’s largest supplier of DUV and EUV lithography tools, although those restrictions are still pending, and little is known as to what the US might have promised to come to an understanding with the Dutch.  How fast can the US tap dance?

​Samsung Electronics (005930.KS) announced it would build a new semiconductor fab in June of 2020, relatively soon after it completed construction of its P2 fab in Pyeongtaek, South Korea.  The P3 fab was to start construction in September 2020 and was to begin operation in late 2021 or early 2022, the 3rd plant at this site, and a bit larger (~75%) than P2.  The fab was originally thought to be focused on DRAM and NAND production and was to feature the latest production technology that is available to the company, logically, EUV, and would add to Samsung’s dominance of the memory market.  Back in May of this year it was indicated that Samsung would begin to place orders and install equipment at the fab and complete construction by the 2nd half of the year.
The fab is expected to cost between $23.35b and $31.14b over the next few years as the fab is fully built out, and the company has enough land at the site to build three additional fabs (P4 – P6) with a combination of NAND, DRAM, and foundry capacity going forward, however it seems Samsung is facing the same inflationary cost increases that we as consumers have been facing, despite the fact that Samsung affiliates are some of the major suppliers to the project.  Samsung C&T (028260.KS) has increased its contract price by 34.4% against the original contract,  Samsung Engineering (028050.KS) has raised its contract price by 40.0% and Samsung Heavy Industries (010140.KS) has raised its contract price by 24.1%, putting the increase for just these three affiliates up by 35.1% in aggregate, or an additional $778.5m US, with all three citing increases in raw materials and labor costs as the reason behind the increases.
While the construction and the equipment installation continues, some of the ongoing contracts have been pushed out by as much as a year, which we expect means that Samsung is focusing on finishing specific P3 projects and delaying the build-out of others in this large fab.  Intel (INTC) is also facing a similar situation as it plans out its new fab in Magdeburg, Germany, as the cost has risen from 18.07b US to 21.26b US, a 17.65% increase, with the company indicating that it has delayed the start of construction for the project, which was to begin in the 1st half of 2023, even with the $7.23b promised by the German government toward the project.
While none of this is good for the global economy, it does have one positive outcome, and that is to slow the capacity increases that have been planned for the semiconductor space, which we expect would cause an over-supply situation  in 2024 and 2025.  While the delays will inevitably move back into the queue as overall consumer demand begins to stabilize, at least the build-outs will be a bit more staggered, although China is still a wild card that will likely see less semiconductor planning changes as the battle with the US government over semiconductor equipment continues.  China has little choice but to build capacity as it sees both external supply and demand decrease.  While China might not be able to build advanced node capacity, they can add more mature nodes for internal consumption and wait until the global climate is ready to allow them back, at which point we expect they will dominate the generic  semiconductor space, as they have done in both the LED and display industries.

Semi.org is a large trade organization whose mission is to “…advance the growth and prosperity of our member companies’ ecosystems…”, sponsoring a wide variety of committees, expositions, market research, and influencing public policy.  As part of their research, they forecast a number of semiconductor categories, some of which we have highlighted in notes earlier this year (5/4/22, 11/07/22).  This week Semi introduced its forecasts for semiconductor equipment spending, which indicated a strong year in 2022, ($108.5b) up 5.9% y/y[1], but a decline of 15.9% in 2023 ($91.2b), albeit with a positive 2024, up 17.5% from the 2023 forecast, although even with the substantial spending gain in 2024, the absolute spend ($107.16) in 2024 is expected to be lower than this year’s record number. 
That said, we note also that the previous forecasts for 2022 and 2023, which were made in September of this year were $117.5b and $120.8b, which puts the new estimates down considerably from the previous forecasts, which were up 14.5% y/y for 2022 and up 2.8% y/y for 2023.  Things certainly have changed over the last few months for the semiconductor business, which has gone from shortages across numerous, if not most categories, to shortening lead times and lower utilization  in many, so we do not fault SEMI.org for the revisions, more the industry itself for assuming that the rules of the business had changed and capacity expansion will solve all supply chain issues.  With a number of regional incentive packages being offered to chip producers, construction was started on 23 new fabs last year, 33 this year, with 28 expected next year, and while China will lead the way with 20, the America’s represent 18 and Europe 17, with Taiwan in 4th place at 14. 
While each fab has its focus, it is easy to see how Semi derives the upswing in equipment spending in 2024, but little has been said about how closely these fabs will map with demand, a far more relevant question, and if we use the display industry as a guide, an accurate match-up would likely not be the case.  It is hard to separate potential business prospects for each semiconductor producer from the overall effect each capacity addition has on the industry, but again, using the display space as an example, semiconductor producers are less interested in the overall industry than they are in what they report to shareholders, so if we had to speculate on a broad basis, we would expect one of two scenarios in 2024/2025, one being a over-capacity in many semiconductor segments, and the other, more rational one, being less spending than forecast in 2024, as some of that capacity is pushed out.
Perhaps the semiconductor industry is a bit more rational than we are used to, and maybe we are a bit more negative after hearing nothing but massive optimism toward semiconductor growth as a solution to the shortages the semiconductor industry faced earlier this year.  However, human nature being what it is, and business being what it is, such unbridled capacity growth carries substantial risk to the semiconductor apace and therefore consumer electronics in general.  In the long-term, such near-term growth will likely find the demand it needs, but we expect it will be a bit of a bumpy ride


[1] Given the previous three quarters worth of data, the 2022 forecast assumes semiconductor equipment spending of $28.64b, down 0.4% q/q but up 4.6% y/y

Back a bit over a year ago, Samsung Electronics (005930.KS) announced that they had chosen a site in Taylor, Texas for their new 6 million square foot semiconductor fab that is expected to have a $17b price tag.  As shown in Figure 3, the site was essentially open farmland, although Figure 4 shows the current status of the site work.  Samsung has just begun to order basic cleanroom equipment from a number of South Korean suppliers, with deliveries scheduled for January of 2023.  The equipment is thought to be specialized air conditioning and filtering units that are external to the cleanroom, which can be placed before construction is completed.
The town of Taylor has also approved the addition of 9 new applications from Samsung for additional facilities likely to be built in the future, expanding the tax rebate zone to 1,268 acres, which would allow for additional fabs to be built on the site without additional tax abatement approval.  The town has also approved a $271m application from Linde (LIN), which will provide co-located industrial gases used at the plant.  Samsung has been offering an internship program to the town’s independent school system, donated $1m to 4 local non-profits, and is sponsoring job fairs to residents.  The plant is expected to need ~2,000 workers once it begins full-scale operation, and while we expect senior management will come from Samsung in Korea and from Samsung’s other fabs in Texas, the job picture for the region seems positive, especially as suppliers commit to local facilities.
The ground-breaking ceremony, which was expected earlier this year, has still not taken place, site work has continued and foundations are being laid, with the initial production scheduled to begin in the 2nd half of 2024, although we expect things are a bit behind schedule.  That said, these early equipment orders bode well for clean room construction to begin early next year, and signal that Samsung is fully behind the project and the timeline is progressing although there is still considerable equipment that has yet to be ordered, which leads us to expect a few months might be added to the production date.

​HC Semitek (300323.CH), the 2nd largest LED producer in China, has announced that China’s largest display producer BOE (200725.CH) will become its largest shareholder through the acquisition of 272m shares in a private placement executed late last week.  The transaction was effected at 5.60 CNY ($0.80 US) per share, a 24% discount to the closing price on October 28th.   The shares make BOE the company’s largest shareholder, with a 23.08% share with BOE making voting agreements with other shareholders that increase its stake to 26.66%.  Previously Zhuhai Huafa Real Industry Investment Holdings (State) was the largest shareholder at 24.87% but that will be diluted to 19.13% after the transactions.
HC Semitek produces LED chips, wafers, and sapphire substrates and ingots, which will feed BOE’s developing mini-LED business and eventually (2024) the company’s initial foray into micro-LEDs.  The company cited a 30% growth rate for the overall MLED (Mini & Micro) market, and an 18% growth rate for the Micro-LED market (to $30b) through 2030, although no data source was mentioned.  HC Semitek is expected to use almost all of the new capital to boost its mini-LED and micro-LED manufacturing capacity.
BOE will use the relationship to further the expansion of its mini-LED backlight business, which is based on its abilities in three basic categories, semiconductor display technology, driver architecture, and transfer technology, which BOE has been using to develop and market its 65” full sheet mini-LED glass backplane while developing a 75” and 86” single sheet product in conjunction with Skyworth (000810.CH), and continues to develop its chip transfer technology, which we believe is based on a ‘pin-push’ system that moves die from tape to the substrate at ~100 chips/sec. 
We note that this is the second such transaction in the mini-LED space in China in recent weeks, with Hisense Visual (600060.CH) increasing its stake in Xiamen-based LED chip and wafer producer Changelight (300102.CH) by 3.26% to 16.82% and is expected to continue to acquire additional shares going forward.  Given that China dominates the LED space and the LCD display space, it seems logical that Chinese display companies would move toward capturing as much of the mini-LED production infrastructure as possible, especially as it extends the life of the LCD space as it competes with OLED technology.   BOE is the first Chinese company to produce a commercial glass mini-LED backlight, with others based on PCB boards that make it difficult to align TFT circuitry with LCD pixels.  While Micro-LED technology is different in that it is self-emissive, bypassing the use of LCD technology, it is based on LEDs, albeit small ones, and the Chinese government and Chinese display producers are working toward making sure that they can compete directly with Korean and Taiwanese display producers as that space develops.