Not Waiting for Godot
China is intent on dominating the mini/micro LED market, and Sanan (600703.CH) as the country’s largest producer of LEDs is leading the charge with a $1.8b production project in Ezhou that is about to begin sampling product and has begun construction of the project’s phase 2 plans ahead of schedule. The phase 1 plant is expected to begin trial production at the end of this month after being topped out in early February, and campus facilities are being finished currently. The project was put on hold temporarily last year, a result of the COVID-19 pandemic.
What makes this unusual, is that phase 2 construction has begun, which is about 6 months early than originally planned, indicating Sana’s willingness to up the stakes in the mini LED battle. Sanan has been working with Samsung (005930.KS) and Apple on developing mini-LED product and when the project is completed (both phases) it will be able to produce 1.6m GaN, 750k GaAsN, and 84k of packaged product for 4K mini-LED displays. We estimate completion of phase 2 production by the end of this year.
As we noted earlier, China is making a big push to become the de facto source for mini-LEDs and is competing directly with Taiwan for share. As can be seen in the table below (see 12/08/20) a number of Chinese mini/micro LED projects were started in 2019, including the Sanan project. While we expect Sanan is likely the most aggressive of China’s LED producers, other projects should be coming on line this year, with the new capacity creating more competition for this developing market. Such competition will go toward reducing prices for mini-LED backlight arrays, but there are still process bottlenecks that need to be addressed. We expect Apple’s entry into the mini-LED device space will help to legitimize dedicated mini-LED production capacity and will go a long way toward improving process. The sooner the better.
What makes this unusual, is that phase 2 construction has begun, which is about 6 months early than originally planned, indicating Sana’s willingness to up the stakes in the mini LED battle. Sanan has been working with Samsung (005930.KS) and Apple on developing mini-LED product and when the project is completed (both phases) it will be able to produce 1.6m GaN, 750k GaAsN, and 84k of packaged product for 4K mini-LED displays. We estimate completion of phase 2 production by the end of this year.
As we noted earlier, China is making a big push to become the de facto source for mini-LEDs and is competing directly with Taiwan for share. As can be seen in the table below (see 12/08/20) a number of Chinese mini/micro LED projects were started in 2019, including the Sanan project. While we expect Sanan is likely the most aggressive of China’s LED producers, other projects should be coming on line this year, with the new capacity creating more competition for this developing market. Such competition will go toward reducing prices for mini-LED backlight arrays, but there are still process bottlenecks that need to be addressed. We expect Apple’s entry into the mini-LED device space will help to legitimize dedicated mini-LED production capacity and will go a long way toward improving process. The sooner the better.
Sanan Mini/Micro Project Entrance Poster - Source: Sanan
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