The news that Apple has decided to suspend its Micro LED screen supply chain project has pushed market concerns about the commercial prospects of Micro LEDs to the forefront. Recently, it was reported that Apple has suspended its supply chain project for smartwatch Micro LED screens. At the same time, related supplier AMS OSRAM (Ames Osram) announced on its official website that it has decided to reassess the company's Micro LED strategy after learning of the unexpected cancellation of a cornerstone project of its Micro LED program.
Some argue that this is just the cancellation of the collaboration between Apple and Ames Osram, but others point out that this is evidence of Apple's cancellation of the Micro LED screen smartwatch development plan.
Anyway, the development and application of the current Apple Micro LED smartwatch project have been stalled, and the industry has also evaluated Apple's initiative. Some industry insiders believe that Apple's suspension of this project will have a significant impact on the entire Micro LED industry, which may not only delay the time for Micro LED technology to achieve large-scale commercial applications, but also weaken the possibility of leading and promoting the rapid maturity process of the industry chain through well-known brands.
A reporter from China Business Daily noticed that on one hand, international manufacturers have stranded the popularization of Micro LED on smartwatches, while on the other hand, other manufacturers are continuing to promote the commercial implementation of Micro LED. Recently, Hisense's B2B division, Hisense Commercial Display, has launched a new generation of flagship Micro LED products, and TCL's 163 inch Micro LED giant screen TV, priced at 799000 yuan, has also attracted attention from the outside world. Earlier, the Thunderbird X2 released by Thunderbird Innovation also used Micro LED technology as the screen.
Micro LED and watch were once favored
Although Micro LED is still in the early stages of commercialization, it has been regarded by many industry professionals as the "next generation display technology". Due to its self illumination and extremely small size of luminescent chips, Micro LED can bring low power consumption, high brightness, ultra-high resolution, and color saturation. With outstanding performance such as faster response speed, longer lifespan, and higher efficiency, Micro LED is considered a display technology that is expected to enter the To C consumer market.
Apple has been laying out Micro LEDs for nearly 10 years. In 2014, Apple acquired LuxVue, a micro LED startup, and later invested billions in the Zhuke Longtan Park in Taiwan, China, China, to set up a display technology research and development laboratory, mainly for the research and development of Mini/Micro LEDs. In addition, Apple has collaborated with manufacturers such as Wafer Optoelectronics, Youda Optoelectronics, and TSMC to develop and produce Mini/Micro LED screens.
It has been exposed that Apple has launched the Apple Watch Ultra with a Micro LED display, which is widely regarded as Apple's first hardware product to use a Micro LED display. Micro LED is not only believed to be used by Apple for larger screen sizes such as iPhones, iPads, and Macs in the future, but it is also considered a touchstone for popularizing Micro LED technology in the industry chain.
It is worth noting that Samsung has also been revealed to have plans to incorporate Micro LED display technology into its smartwatch series to challenge Apple's next-generation Apple Watch Ultra. South Korean media ETnews stated that Samsung Display is moving the production equipment for Micro LED test lines to the A2 line in Yashan, Chungcheong nam do, which is expected to be put into operation in the first half of 2024.
The two major smartwatch brands, Apple Watch and Samsung Galaxy Watch, account for 40% of the global smartwatch market. According to the forecast from TrendForce Consulting, the estimated global shipment of smartwatches in 2023 is 130 million units, with Apple leading with over 30% of the market share, followed by Samsung with nearly 10% of the market share. Smartwatches are also considered as the starting point for the large-scale commercialization of Micro LEDs.
In 2023, Hou Lin, a senior analyst in the GfK mobile phone industry, said, "From the characteristics of Micro LED technology, the smartwatch product is currently the easiest to implement. The screen size used in smartwatches is smaller, which can better ensure product yield. Moreover, the overall shipment volume of Apple watches is relatively small, so the long-term practicality of the screen can be tested using the watch first."
However, with the uncertain future of the Apple Watch Micro LED version project, it has also cast a shadow over the short-term application of Micro LED screens in smartwatches.
"Ames Osram, a major LED chip manufacturer, is the only chip supplier for the Apple Watch Micro LED version." TrendForce Consulting pointed out that Apple Watch's previously confirmed suppliers included AMS OSRAM using Malaysia's 8-inch factory to provide Micro LED vertical chips, and LG Display, a major Korean panel manufacturer, responsible for glass drive backboards and mass transfer production processes. Nowadays, the failure of chip supply cooperation means that the originally planned listing plan for 2026 may be difficult to achieve.
Who is the market leader for Micro LED?
TrendForce Consulting further analyzed that the Micro LED version of the Apple Watch is currently facing several tricky challenges: firstly, the limited supply chain size has led to high costs for Micro LED panels, which may reach 2.5-3 times higher than similar sized OLED panels; Secondly, AMS OSRAM provides smaller Micro LED vertical chips. Although it helps to reduce chip costs and design backup circuits, it requires higher transfer accuracy and has become another obstacle to smooth mass production; Thirdly, Micro LEDs still lack a dedicated driver architecture, and Micro IC or TFT solutions are still an unresolved issue.
However, Guo Minggui, an analyst at Tianfeng International Securities, stated that Apple has cancelled its development plan because Apple believes that Micro LEDs cannot significantly enhance product added value, coupled with high production costs and lack investment benefits. It also revealed that Apple has disbanded most of the Micro LED development team.
However, TrendForce Consulting believes that the "setback" developed by the Micro LED version of the Apple Watch is only temporary. Firstly, from the perspective of the supply chain, South Korea currently has manufacturers with complete layouts in Micro LED chips, backboards, and related transfer processes. Secondly, Apple has applied for many patents related to Micro LED in the past few years, including the integration of display and sensing components, as well as flexible displays built on Micro LED. They have rashly abandoned innovation equivalent to abandoning display specifications, which contradicts the value that Apple has always emphasized; Finally, as a new display technology focused on by the market, Micro LED not only has the opportunity to be further applied in watches, but also in applications including head mounted AR devices in the future. For Apple, it is still a new technology that needs to be relied on in the medium to long term product diversification layout.
On the other hand, other manufacturers are actively showcasing the implementation of Micro LED technology.
At the ongoing 2024 China Home Appliances and Consumer Electronics Expo (AWE), the reporter saw that TCL showcased a 163 inch Micro LED giant screen TV, Samsung showcased a 114 inch Micro LED product and transparent Micro LED technology, and Thunderbird Innovation also showcased AR glasses with Micro LED screens to the public.
From the perspective of market prospects, the industry is still optimistic about the development of the Micro LED market. RUNTO predicts that by 2028, the global market size of Micro LED displays will exceed 10 billion US dollars, reaching 10.2 billion US dollars, with a compound annual growth rate of nearly 50% over five years.
From the current technology of Micro LED, Zheng Haiyan, the Research Director of the Public Information Display Research Business Group of Lotu Technology, told reporters that Micro LED is currently in the stage of research and development, and has not been mass-produced on a large scale. In the short term, it will mainly be applied as a case in the commercial field, such as LED all-in-one machines, monitoring and command screens, etc. Micro LED is divided into direct display and backlight products, and the commercial field is mostly direct display products, which are the case applications mentioned above; TV and AR, as representatives of backlight products, are currently in the mass production stage. Micro LED is developing in multiple sub sectors and will accelerate its commercialization in TV, AR, car, and other fields, promoting the formation of a new channel for market growth.
Meanwhile, there are still many industry professionals who are optimistic about the prospect of smart watches driving the commercial popularization of Micro LEDs.
According to Sima Qiu, the research director of McGill Consulting, Apple may not have completely stopped the supply chain cooperation of the Micro LED screen project for smartwatches, and will also work together with some supply chains to promote the Micro LED screen project for smartwatches. However, Apple's suspension of cooperation with some Micro LED manufacturers may directly cause losses or layoffs to the partners. Some laypeople or investors may have doubts about the prospects of Micro LED watch applications, and even cause short-term cooling of investment in the Micro LED smartwatch industry chain.
But Sima Qiu believes that as technology matures and costs decrease, Micro LED is expected to be the first to explode in the ultra large screen market. At the same time, there are still unique application advantages in the smart watch, car display, outdoor display and other application markets. Silicon based Micro LED is currently the best solution for AR, and the display industry chain enterprises have not given up due to Apple's suspension of some smart watch Micro LED cooperation. Instead, they continue to invest in Micro LED, which has a bright future.
During an interview with reporters, Liu Xiaolan, Vice President of Marketing and Brand at TCL Huaxing, still believes that "smartwatches are the most important scenario to drive the commercial popularization of MicroLED. However, many problems need to be solved, such as transfer accuracy, cost, etc. Currently, the entire industry chain has not been fully formed, and there are many display technologies available. From a comparison of multiple technologies, it is necessary to choose to use this technology for this product, and the brand will also measure it."
Liu Xiaolan told reporters that TCL Huaxing is optimistic about the application of Micro LED technology in watches and cars. At the same time, TCL Huaxing is also developing the application of this technology in these product fields. However, there is currently no mass production, but Micro LED is one of the trends, and TCL Huaxing will continue to invest in technology and research and development.
"Apple is constantly promoting technological innovation, but it also faces the challenge of not finding a particularly good breakthrough in the application of Micro LED in watches in a short period of time. It also needs to face technological breakthroughs from upstream ecological manufacturers." A panel industry insider told reporters, "On the technical level, we cannot guarantee which technology will definitely succeed or which technology will not succeed. Perhaps we feel that the bottleneck of Micro LED is very big today, and perhaps it will be solved quickly in a year. The technical difficulties are difficult to explain."