Taiwan-based polarizer maker BenQ Materials is pushing to prepare for microLED and OLED products, eyeing the business opportunities from the emergence of microLED application, according to company president Ray Liu.
In terms of OLED, penetration rates across mobile phones, notebooks, and automotive applications are increasing, with demand for OLED applications continuing to rise. Liu noted that the verification cycle for automotive products is lengthy, leading to slow revenue growth. BenQ Materials is not only targeting panel manufacturers but also developing relationships with Tier 1 automotive suppliers, expecting continued growth in automotive revenue in 2025.
Regarding OLED products for mobile phones and notebooks, BenQ Materials has already entered the supply chains of first-tier brands in China and anticipates an increase in clients among mobile phone and notebook brand manufacturers in 2025.
Liu mentioned that corresponding products for both microLED and OLED have been developed, while no plans exist for augmented reality (AR) glasses.
Polarizer pricing trends and market outlook
On the pricing trend for polarizers, Liu pointed out that overall prices declined in 2024, and he remains cautious about them in 2025.
Chairman Z.C. Chen commented on the uncertainties brought about by US President Trump's administration, noting that geopolitical and economic factors have increased uncertainty in the overall environment. The trade war could lead to a decrease in global demand; however, improvements in AI technology are expected to drive demand for AI PCs. Additionally, since it has been five years since many PCs were replaced during the pandemic, a replacement demand is expected to emerge in the next one to two years, positively impacting the display industry.
While the potential for AI PCs may stimulate replacement demand, challenges remain due to ongoing price competition and inventory pressures. The key to moving forward lies in whether the consumer market can stabilize and how inflation might affect subsequent conditions.
As for the impact of Trump's tariff policies, Chen stated that while some products from BenQ Materials are sold in the US, they primarily provide materials and components rather than end products, thus the tariff issue has minimal impact. However, any influence on consumer demand needs careful observation, as it could affect products globally.
Growth in the medical sector and future outlook
Chen highlighted that 2024-2025 will be a transformative period for the company, which is increasing capital expenditures on high-margin products while expanding customer applications, resulting in noticeable synergies.
Furthermore, demand related to healthcare has risen, with international medical companies adopting their products, thereby increasing the proportion of BenQ Materials' medical business. They are cautiously optimistic about the medical sector's performance in 2025, expecting investments made over the past few years in transformation technologies and capital expenditures to yield results.
In 2024, BenQ Materials' medical business grew by 20% year-over-year, with all product lines showing growth, particularly in the US and Southeast Asian markets. Web-Pro also saw significant growth in professional fields. The medical revenue share for BenQ Materials reached 30%.
Looking ahead to the first quarter of 2025, Chen estimates that the medical business will maintain a similar share of around 30%. However, seasonal factors may impact this, including fewer working days and disruptions in logistics during the Lunar New Year, potentially reducing medical revenues, though the overall effect is expected to be limited.
Despite a challenging overall market, the e-commerce consumption market in China is still projected to grow in 2024. Changes in distribution channels have slightly increased costs, but strategies are in place to manage these expenses without visible increases.
Chen noted that BenQ Materials' contact lenses have reached the top five in Taiwan, focusing on traditional optical stores and major retailers like Watsons, Cosmed, and Poya, along with availability in FamilyMart convenience stores, indicating sustained growth momentum in Taiwan.
Interactions with key customers in Japan suggest expansion opportunities in the coming years. In Southeast Asia, sales have begun in countries like Vietnam, the Philippines, and Indonesia, although contributions to overall revenue remain modest.
Article translated by Charlene Chen and edited by Jack Wu