Compared to the aggressive investments in the Micro LED business by Taiwanese and Chinese companies, South Korean panel manufacturers could slow their efforts in Micro LEDs due to high production costs, insufficient application demand, and overheated competition leading to a lack of profitability.
According to South Korea's Money Today, Samsung Display (SDC) and LG Display (LGD) are adjusting their Micro LED business strategies. SDC plans to continue investing in R&D to secure its technology, but it will determine when to expand its business based on market conditions. LGD has started reducing staffing in its Micro LED task force and is discussing various personnel deployment plans.
Industry sources noted that SDC and LGD are slowing down their Micro LED business plans primarily because the market potential has fallen short of expectations. One example is Apple reportedly canceled its Micro LED smartwatch collaboration with ams OSRAM at the beginning of 2024.
Micro LED technology requires the technology to "mass transfer" LEDs onto a substrate. Due to low yield rates and high costs, Micro LED devices are rather expensive. Without clear customers, achieving mass production is difficult.
Additionally, the current application of Micro LED is mostly limited to TVs, making investment more difficult. In major IT devices such as monitors, smartwatches, and smartphones, almost no products incorporate Micro LEDs. The global annual sales of Micro LED devices is only about 1,000 to 2,000 units, far below LCD TVs (200 million units) and OLED TVs (8 million units).
Some analyses also suggest that Chinese companies may gain an advantage with low labor costs. Even with low yield rates and technical insufficiencies, they can still gain Micro LED market shares through low-cost competition. BOE is building a Micro LED factory in Guangdong with an annual capacity of approximately 60,000 units, and TCL CSOT is also conducting R&D on Micro LED technology.
In this context, Japan's Sony, Taiwan's AUO and Innolux, and France's Aledia are working to expand the range of products that Micro LEDs can apply, reflecting that even though the market scale is relatively small, the number of competitors continues to increase. This situation has led SDC and LGD to take a cautious stance on expanding their investments.
Display industry sources pointed out that SDC and LGD believe it is currently difficult to achieve profitability in the Micro LED business. They may consider expanding their investments when the demand for products suitable for Micro LED, such as wearable devices or virtual reality (VR) devices, increases.
Article translated by Jack Wu
