Dueling Banjos
Yesterday we spent some time describing the potential for Apple (AAPL) to transition its iPad line to OLED displays in 2022 and 2023, and we believe there is a faction at Apple and a number of its suppliers who are pushing to make that transition, particularly as a similar transition from LCD to OLED in the company’s iPhone line has been quite successful. But that certainly does not rule out other display technologies and as we also noted yesterday the OLED coterie at Apple has a rival crew that is interested in staying with LCD displays but adding Mini-LED backlights to enhance the quality. While the OLED group seems to be focused on the iPad, the Mini-LED group is focused on the MacBook, and it seems that Apple is putting some muscle behind the Mini-LED faction in the near-term.
Apple has been working on Mini-LED and Micro-LED technology for a few years (they purchased micro-LED developer LuxView (pvt) in 2014) and maintains ‘secret’ R&D/Pilot lines in Taiwan and California, where partners Ennostar (3714.TT), AU Optronics (AUOTY) and others work with Apple’s engineers to push forward the development of Mini-LED and Micro-LED devices. That said, Apple’s foray into Mini-LED technology for the iPad Pro this year seems to have pushed the company to move further toward commercializing Mini-LED technology, with the possibility that the September/October release of this year’s MacBook Pro will include two Mini-LED based models.
Along with a new, or at least updated processor, the is year’s MacBook Pro is expected to be available with a 14” or 16” Mini-LED LCD display, and to prepare for that release Apple is said to be spending $200m to help its Mini-LED supply chain expand to meet its needs. In particular we believe that one of Apple’s suppliers, Taiwan Surface Mounting Technology (6278.TT) is building out 4 new SMT (Surface Mount) lines that will be producing Mini-LED boards for Apple, and while we cannot confirm that Apple is financing this expansion at TSMT’s Dongguan, China plant, it does seem that the lines, which are expected to be able to process 700,000 to 800,000 units/month, will be dedicated to Apple, at least in the near-term.
Apple is also working toward increasing Mini-LED production at other suppliers in the Mini-LED production chain, some of which have been purchasing tools over the last year, or have had Apple purchase the tools for them. Zhen Ding Technology (4958.TT) and Tripod (3044.TT) have both expanded PCB board capacity recently in order to meet expected demand from Apple, and we know of other intermediate producers or process tool vendors that have seen incremental purchases from Apple’s Mini-LED supply chain or from Apple itself over the last few quarters, as the Mini-LED iPad Pro registers sales.
However Apple’s financial commitment to Mini-LEDs does not color our opinion about the company’s concurrent move toward OLED for other devices, as both have places in the Apple device eco-system, particularly the timelines for the adoption of both technologies differ. While OLED is more mature in terms of production process, there are only a few producers who are able to meet Apple’s quality and quantity needs, and while we expect other producers to continue to increase production and quality over the next few years, Apple has moved slowly and methodically into OLED displays. Mini-LED technology is an outgrowth of more typical LED backlight technology, and while the Mini-LED supply chain infrastructure is still developing and process issues are being addressed, there is no ‘new’ technology or process steps that need to be developed before it can be implemented, which increases its attractiveness in the near-term. This gives both technology camps reason to expect continued support both financially and from a product perspective going forward. They might be dueling, but they are both really playing the same song.
Apple has been working on Mini-LED and Micro-LED technology for a few years (they purchased micro-LED developer LuxView (pvt) in 2014) and maintains ‘secret’ R&D/Pilot lines in Taiwan and California, where partners Ennostar (3714.TT), AU Optronics (AUOTY) and others work with Apple’s engineers to push forward the development of Mini-LED and Micro-LED devices. That said, Apple’s foray into Mini-LED technology for the iPad Pro this year seems to have pushed the company to move further toward commercializing Mini-LED technology, with the possibility that the September/October release of this year’s MacBook Pro will include two Mini-LED based models.
Along with a new, or at least updated processor, the is year’s MacBook Pro is expected to be available with a 14” or 16” Mini-LED LCD display, and to prepare for that release Apple is said to be spending $200m to help its Mini-LED supply chain expand to meet its needs. In particular we believe that one of Apple’s suppliers, Taiwan Surface Mounting Technology (6278.TT) is building out 4 new SMT (Surface Mount) lines that will be producing Mini-LED boards for Apple, and while we cannot confirm that Apple is financing this expansion at TSMT’s Dongguan, China plant, it does seem that the lines, which are expected to be able to process 700,000 to 800,000 units/month, will be dedicated to Apple, at least in the near-term.
Apple is also working toward increasing Mini-LED production at other suppliers in the Mini-LED production chain, some of which have been purchasing tools over the last year, or have had Apple purchase the tools for them. Zhen Ding Technology (4958.TT) and Tripod (3044.TT) have both expanded PCB board capacity recently in order to meet expected demand from Apple, and we know of other intermediate producers or process tool vendors that have seen incremental purchases from Apple’s Mini-LED supply chain or from Apple itself over the last few quarters, as the Mini-LED iPad Pro registers sales.
However Apple’s financial commitment to Mini-LEDs does not color our opinion about the company’s concurrent move toward OLED for other devices, as both have places in the Apple device eco-system, particularly the timelines for the adoption of both technologies differ. While OLED is more mature in terms of production process, there are only a few producers who are able to meet Apple’s quality and quantity needs, and while we expect other producers to continue to increase production and quality over the next few years, Apple has moved slowly and methodically into OLED displays. Mini-LED technology is an outgrowth of more typical LED backlight technology, and while the Mini-LED supply chain infrastructure is still developing and process issues are being addressed, there is no ‘new’ technology or process steps that need to be developed before it can be implemented, which increases its attractiveness in the near-term. This gives both technology camps reason to expect continued support both financially and from a product perspective going forward. They might be dueling, but they are both really playing the same song.
Deliverance – 1972 - Dueling Banjos - Source: Country Thang Daily
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