FitTech, a provider of LED probing, testing, and sorting equipment, has expanded its footprint in new industries such as compound semiconductor and laser diode testing, where it anticipates double-digit revenue growth in the coming year.
Samsung Electronics anticipates a recovery in the terminal market in 2024 and reportedly plans to increase the production of televisions and smartphones by 10% annually, potentially driving the recovery of markets such as semiconductors, components, and displays.
In the global TV market for the third quarter of 2023, Samsung Electronics maintains its top position based on sales with a nearly 30% market share, while LG Electronics holds a similar leading position in the OLED TV market.
In the burgeoning Micro LED display market, wearable devices are proving to be a focal point for growth, and forecasts indicate that by 2028, the market scale for Micro LED in wearables is poised to surpass that of TV-use Micro LED, with Apple Watch adoption expected to materialize in 2026 at the latest.
Amid a decline in consumer electronics demand triggering a collapse in the LED backlight supply chain, Taiwan-based Advanced Optoelectronic Technology (AOT) is navigating challenges by diversifying into Mini LED automotive backlights. With in-vehicle displays contributing 10% of revenue for the first time and poised for higher double digits in 2024, AOT's strategic shift is enhancing operational and profit performance.
With the conclusion of the strikes at US automotive plants, the shipment visibility of LED manufacturers in the fourth quarter of 2023 regarding automotive products has gradually cleared up, allowing them to prepare for new vehicle launch shipments in the following year. Despite ongoing uncertainties in the overall economic environment, the industry believes that purchases in the automotive market can recover in 2024, and customers will be more active in placing orders. Although the first quarter is traditionally the slack season, it's expected to perform well due to shipment demands from US customers.
China's recent relaxation of export controls on semiconductor materials like indium and germanium, effective from November 1, has alleviated the challenges faced by LED makers such as industry player EPI LEDS Technologies. The move comes after a three-month struggle for export permits, particularly impacting the acquisition of gallium arsenide (GaAs), a crucial substrate material for epitaxial growth of four-element LED chips.
Taiwanese panel maker AU Optronics (AUO) is making a significant foray into the automotive market with innovative smart cockpit solutions featuring MicroLED display technology. The company's recent acquisition of Behr-Hella Thermocontrol GmbH (BHTC) and its upcoming inaugural appearance at CES 2024 are key milestones in this strategic expansion.
Contrel Technology, an LCD equipment specialist, has received orders for microLED and panel-level packaging from Taiwan's top-two panel makers, AUO and Innolux, which will drive revenue growth in 2024.
Global microLED production capacity has been tight due to burgeoning demand. AU Optronics (AUO) and PlayNitride Display, a subsidiary of PlayNitride, have signed a cooperation agreement where both firms will jointly establish a 6-inch microLED chip-on-carrier (CoC) production line. The agreement is expected to boost PlayNitride Display's revenue, significantly reduce microLED production costs for AUO, and make AUO's microLED products a lot more competitive due to the lower costs.
Samsung Display and LG Display have either exited or are exiting LCD manufacturing, yielding the market to China-based competitors. It remains uncertain whether the South Korea-based display giants can maintain their technological lead in the four remaining areas of OLED for IT and automobile, transparent OLED, and Microdisplay.
AU Optronics (AUO) has been actively positioning itself in the automotive market as automotive applications becoming the third largest product line at AUO, surpassing LCD monitors and reaching more than NT$10 billion (around US$309.87 million) in single-quarter revenue.
Industry sources have revealed that Apple is rolling out new iPad Pro models and both the new 12.9-inch iPad Pro model and the new iPad Air are designed with traditional LCD backlights, rather than the mini-LEDs Apple introduced to its premium 12-9-inch iPad Pro model two years ago. However, component changes might have postponed the production of the 12.9-inch iPads to early 2024 at the latest. It was originally slated to start in early November.
After acquiring StrongLED Lighting System, Tons Lightology (Tons) will start accounting for the new entity's revenue starting this November, which is anticipated to bump up the firm's revenue in the fourth quarter. Nonetheless, rising energy prices from the regional wars and the slack economy present challenges for the firm post-acquisition.
With market demand weak, LED manufacturers in both Taiwan and China are facing declines in revenue and profits in 2023. Although Chinese LED makers started to initiate price hikes in the second quarter, the slow inventory clearance of LED backlights and display applications has caused many Chinese LED packaging companies to experience losses. Suppliers like MLS and DSBJ have raised prices again in September with increases ranging from 5-15%, marking the fourth round of price hikes since the beginning of 2023.
With Micro LED applications diversifying their development, PlayNitride chairman Charles Li stated that not only do they have two to three new mass-production orders right now, but the volume of sample orders from other customers is also significant. With their existing production consistently operating at full capacity, PlayNitride plans to expand its capacity by over 50% in 2024 and will seek more strategic partners, potentially expanding production beyond Taiwan to overseas markets.
Apple's MacBook Pro devices will continue using miniLED as sources of backlighting for their screens until 2026, according to industry sources. In the fourth quarter of 2023, miniLED suppliers are expected to ship new modules of backlighting that can increase the display brightness by 10% compared to the first-generation specifications, the sources said.
Market research firm Omdia projects the shipment of large-sized displays, including both LCD and OLED, will see a drop of 7.3% in 2023 compared to the previous year. This comes as the result of reduced demand for large-size displays and the operational adjustments made by panel manufacturers.
Darwin Precisions Corporation (DPC), an AUO subsidiary, is undergoing transition and actively expanding into applications in different fields. Outside of continuing to cultivate its semiconductor packaging and fine metal mask (FMM) businesses, it hopes to produce more high-end models and expand its market with innovation strategies in four areas: high-efficiency backlight and light guide plates, manufacturing service optimization, integrated services, and precision metal components.
Due to the pursuit of Chinese LCD panels, the South Korean display industry has shifted its focus to the OLED business. As demand for large-sized TVs increases and OLED applications expand to sectors like tablets, monitors, and notebooks, OLEDs are expected to improve the revenue performance of South Korean panel makers in 2024.
Taiwan's leading LED manufacturer Ennostar has reported that downstream channel inventories have been successfully cleared, but there are no immediate signs of an uptick in demand. The company is optimistic that shipments of miniLED automotive displays will enter a growth phase in the second half of the year, thanks to increasing adoption by car manufacturers. This rapid growth momentum is expected to continue in the next two years.