Epistar Expanding Mini-LED Production
Mini-LED backlights give longevity to LCD displays in that they allow LCD technology to better compete with OLED displays. While Mini-LED technology is an outgrowth of conventional LED backlight technology, by making LEDs smaller and squeezing more into a display, the contrast of an LCD display can be improved while reducing fast motion artifacts (smear or trails) and halos. Given the vast investments made in LCD production capacity over the last 15+ years, any technology that can extend the life of those assets is one championed by panel producers. From a CE brand perspective the higher price of OLED displays on a m2 basis, keeps some mid-to lower price point products out of the OLED display sphere and focused on less expensive LCD display panels, but at the same time those products must compete with OLED and other emerging display technologies to stay relevant.
Mini-LED backlights do just that by improving LCD display specifications, especially when paired with quantum dots, so aside from the enthusiasm for Mini-LEDs from LED producers, brand interest in Mini-LEDs is increasing as the supply chain for Mini-LED components and modules expands. LED producers are happy to see a path toward a more upscale market, especially as generic LED production processes are relatively easily scaled to Mini-LEDs, and brands see this as another level of differentiation and premium pricing. Samsung Electronics (005930.KS), LG Electronics (066570.KS), TCL (000100.CH), Sony (SNE), and Hisense (600060.CH) have all adopted the technology for their TV lines, and Apple (AAPL) has been using Mini-LEDs for a number of products, from the Apple Watch to the MacBook line and in the company’s XDR Monitor.
It is not secret that Apple has been working with a number of partners toward the continuing development of Mini-LED technology, but also with a bent toward developing Micro-LED displays, which are both a major step forward in display technology and one that would eventually compete with OLED and even LCD itself. That said, Apple continues to work with partner Epistar (3714.TT) toward further development of Mini-LEDs and is supplied by Epistar, OSRAM (AMS.SW) and Sanan (600703.CH) from their products. Sanan seems to have had some issues (IP) that have made product qualification more difficult, however Epistar has been both a development partner and LED supplier to Apple for a number of years.
To that end, Epistar is expanding its Mini-LED capacity in Taiwan and China, although speculation on the extent of that expansion seems to be somewhat unreliable. Late last year expectations were that Epistar would be expanding capacity by 50% in 2022, and while that seemed a bit optimistic, we noted last year that Epistar was seeing strong demand starting in 2Q, roughly the same time Apple was beginning volume production for the MacBook Pro. The company did add Mini-LED production capacity late last year, so some of the 50% increase expected for this year might have been pulled forward, but we note that Epistar is at least going forward with capacity expansion plans this year of 25%, from ~15m in2 to ~18.8m in2, or 1.2m 4” equivalents to 1.5m.
While it cannot be assumed that all of the new Epistar capacity will be allocated to Apple, we expect they have communicated longer-term plans and Epistar has responded. All in, the expansion likely signals Apple’s continuing ‘investment’ in Mini-LED technology and the potential for new Mini-LED products, and solidifies some of the speculation as to additional products either this year or next. While this says nothing as to Apple’s feel toward other display technologies, as each product category has its particular needs and specifications, it does give the Mini-LED supply chain a ‘warm’ feeling knowing that Apple, Samsung, LG, and TCL are all expanding the use of Mini-LEDs, and while suppliers are more will to take capacity risk, Epistar’s expansion seems to point the Mini-LED industry in the right direction.
Mini-LED backlights do just that by improving LCD display specifications, especially when paired with quantum dots, so aside from the enthusiasm for Mini-LEDs from LED producers, brand interest in Mini-LEDs is increasing as the supply chain for Mini-LED components and modules expands. LED producers are happy to see a path toward a more upscale market, especially as generic LED production processes are relatively easily scaled to Mini-LEDs, and brands see this as another level of differentiation and premium pricing. Samsung Electronics (005930.KS), LG Electronics (066570.KS), TCL (000100.CH), Sony (SNE), and Hisense (600060.CH) have all adopted the technology for their TV lines, and Apple (AAPL) has been using Mini-LEDs for a number of products, from the Apple Watch to the MacBook line and in the company’s XDR Monitor.
It is not secret that Apple has been working with a number of partners toward the continuing development of Mini-LED technology, but also with a bent toward developing Micro-LED displays, which are both a major step forward in display technology and one that would eventually compete with OLED and even LCD itself. That said, Apple continues to work with partner Epistar (3714.TT) toward further development of Mini-LEDs and is supplied by Epistar, OSRAM (AMS.SW) and Sanan (600703.CH) from their products. Sanan seems to have had some issues (IP) that have made product qualification more difficult, however Epistar has been both a development partner and LED supplier to Apple for a number of years.
To that end, Epistar is expanding its Mini-LED capacity in Taiwan and China, although speculation on the extent of that expansion seems to be somewhat unreliable. Late last year expectations were that Epistar would be expanding capacity by 50% in 2022, and while that seemed a bit optimistic, we noted last year that Epistar was seeing strong demand starting in 2Q, roughly the same time Apple was beginning volume production for the MacBook Pro. The company did add Mini-LED production capacity late last year, so some of the 50% increase expected for this year might have been pulled forward, but we note that Epistar is at least going forward with capacity expansion plans this year of 25%, from ~15m in2 to ~18.8m in2, or 1.2m 4” equivalents to 1.5m.
While it cannot be assumed that all of the new Epistar capacity will be allocated to Apple, we expect they have communicated longer-term plans and Epistar has responded. All in, the expansion likely signals Apple’s continuing ‘investment’ in Mini-LED technology and the potential for new Mini-LED products, and solidifies some of the speculation as to additional products either this year or next. While this says nothing as to Apple’s feel toward other display technologies, as each product category has its particular needs and specifications, it does give the Mini-LED supply chain a ‘warm’ feeling knowing that Apple, Samsung, LG, and TCL are all expanding the use of Mini-LEDs, and while suppliers are more will to take capacity risk, Epistar’s expansion seems to point the Mini-LED industry in the right direction.
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