Capital is pouring into the market. How can the extremely expensive Micro LED be commercialized?

21st Century Business Herald reporter Wu Jianan reported in Shenzhen

"Micro LED technology is slowly brewing a huge market in the future." said Qiu Yubin, senior deputy general manager of research at TrendForce Technology.

He told the 21st Century Business Herald reporter that it is expected that by 2029, with cost reduction, design optimization and application development, the industry chip market can reach an output value of more than 461 million US dollars.

Since the second half of the year, the Micro LED industry chain has been frequently dynamic in terms of technology research and development, product promotion, production capacity planning and capital injection, and continues to attract market attention.

In September, meta officially launched the meta Ray-Ban Display, the first consumer-grade AR glasses equipped with a display screen, triggering a rush to buy around the world and even being priced at a sky-high price of 16,000 yuan in the domestic market.

The AR track in the Micro LED field has become the focus of capital investment, with multiple rounds of financing worth hundreds of millions of dollars one after another. In terms of production capacity, many projects such as Rokid, Shenzhen Tianma, Thunderbird Innovation, and Safulus have also made new progress.

Industry insiders said that although Micro LED still faces severe challenges in the market in terms of cost control, yield improvement and large-scale transfer, its business path is gradually becoming clearer.

Capital is rushing to enter Micro LED

Micro LED micro-display technology is recognized as the next generation of new display technology.

The industry believes that it has the advantages of high pixel density, ultra-high brightness, low response time, low power consumption, long life, high color saturation, high reliability, small size, etc., and can be widely used in near-eye display, micro-projection, vehicle display, optical communication and other fields. Unlike OLED, which has taken over the field of flexible displays due to its bendable and foldable characteristics, Micro LED technology is penetrating into small-size scenarios such as AR/VR and smart watches due to its advantages in brightness and power consumption.

The Fenix 8 Pro smart watch released by Garmin this year introduces Micro LED technology and is used in the Sony Honda Afeela 30-inch automotive display expected to be released at the end of the year, marking the beginning of Micro LED coverage in various major fields. The technology is currently showing market adaptability in a wider range of fields such as smart glasses, smart watches, vehicle displays and optical communications.

"For Micro LED, it is no longer just focused on display applications in the past, but has begun to branch out." Qiu Yubin said that Micro LED is currently widely used in the fields of adaptive headlights and optical communications, including Volkswagen, Porsche, Audi, NIO, SAIC and other manufacturers have implemented Micro LED adaptive headlights in mass-produced cars.

TrendForce Research Report pointed out that the launch of these iconic products will gradually promote the Micro LED chip market output value, which is expected to increase to US$461 million in 2029.

The capital market’s enthusiasm for Micro LED technology continues to rise, and many companies have received large amounts of financing. In October this year, Shanghai Jianyao Display (JBD) announced that it had completed a B2 round of financing of over one billion yuan. The funds were mainly used to accelerate the innovation and product iteration of Micro LED technology. This amount set a new single financing record in the global Micro LED microdisplay field.

On the end product side, Thunderbird Innovation, which focuses on Micro LED AR glasses, completed a C++ round of financing in August, Yingmu Technology completed a 150 million yuan B2 round of financing in July, and Rokid completed a C+ round of financing in September last year.

In addition, from the perspective of production capacity layout, panel companies including BOE, TCL CSOT, Visionox, Shentianma, AUO, and Innolux have launched layout in the Micro LED field, and some have entered the product delivery stage. In December last year, Chenxian Optoelectronics, invested by Visionox, officially lit up the first TFT-based Micro LED mass production line in mainland China it built, entering the mass production and shipment stage; in March this year, BOE Huacan Optoelectronics' 6-inch Micro LED mass production line achieved product delivery in Zhuhai.

However, the industrialization process of Micro LED technology is not smooth, and its large-scale mass production still faces core challenges such as yield and cost.

Qiu Yubin said that although Micro LED microdisplays have made great progress, the process cost of similar-sized OLED is still several times higher, with the cost of chips accounting for more than 80%. Therefore, for the supply of Micro LED terminal equipment, cost reduction is still a top priority. In addition, the high brightness of Micro LED is based on high power consumption, and there is still a lot of room for improvement in power consumption in the future.

How to improve Micro LED production efficiency and reduce production costs?

"Larger size means lower cost and better CMOS process compatibility, and the Micro LED industry will develop in the direction of larger sizes." Guo Xiao, an expert in GaN epitaxy process on silicon substrate of Jingneng Opto, said that large-size GaN on silicon substrate is the mainstream route of Micro LED. At present, the company has taken the lead in breaking through the 12-inch silicon substrate GaN-based RGB three-color Micro LED epitaxy, and large-size ultraviolet, blue light, and green light have been mass-produced.

Guo Xiao believes that with the evolution of GaN-based Micro LED technology on silicon substrates to 8 inches and 12 inches, and the development of various full-color technologies based on silicon substrate Micro LEDs, Micro LED will usher in large-scale industrial opportunities.

Qiu Yubin also said that Micro LED is expected to have a longer service life after improvement, which will reduce the need for subsequent maintenance and replacement in the commercial space, which will be beneficial to the overall cost, especially in addition to large-scale consumer displays, it will usher in better shipment results in niche markets such as transparent displays.

Chinese manufacturers accelerate the integration of AR glasses supply chain

In the usage scenarios of Micro LED, AR glasses are considered to be the main position for technology iteration and product implementation.

"AR glasses are mainly composed of optical display modules, processors, sensors, memory and batteries, among which the cost of optical display modules accounts for more than 40%." Guo Xiao said that Micro LED has more advantages than OLED and LCD in terms of brightness, lifespan and other indicators. Micro LED paired with optical waveguide micro-display modules is an ideal light engine for realizing lightweight AR devices.

Currently, in the AR track of Micro LED, upstream and downstream enterprises in the industry chain are competing for high brightness, full color, high pixel density and miniaturization technology. Shanghai Display (JBD) released the "Roadrunner" Micro LED micro-display technology platform in October, achieving an ultra-small pixel pitch of 2.5 μm; using a single-layer etched optical waveguide with a high-brightness Micro LED light engine, it was first used in the AR glasses Thunderbird X3 Pro; BOE began researching new packaging solutions in October to improve the light efficiency of Micro LED.

Technological progress has promoted the end product market. In the second half of this year, a number of new AR and AI glasses equipped with Micro LED will be released intensively.

In October, Waterfall Glasses, the AI glasses released by Waterfall Artificial Intelligence, is equipped with a full-color Micro LED light engine. INMO GO3 of Yingmu Technology uses a binocular single green Micro LED light engine and diffraction light waveguide. In September, Lipro Vision, Weiguang Technology, Qiushui Semiconductor, Leyard and other companies also launched new AR glasses products for athletes, industrial or consumer markets.

SVP Yinchuanxue, the co-founder of Yingmu Technology, said that Yingmu has released 5 to 6 models of AR and AI smart glasses, and the sales of the entire series of products have exceeded 100,000 units. The recently released INMO Go3 uses Micro LED + diffraction light waveguide binocular display, with an eye brightness of up to 1500nits, while also meeting user needs such as fashion and thinness.

The maturity of products is also driving large-scale production capacity construction. Since the second half of this year, multiple production capacity projects have made progress. Guozhao Optoelectronics announced the completion of the first phase of its OLED microdisplay device expansion project, which includes an 8-inch silicon-based Micro LED mass production line with an investment of 1 billion yuan. After completion, it will form an annual production capacity of 12-inch wafers and 8-inch wafers, and the annual display output will reach 4 million units.

StarKey Semiconductor’s Micro LED production line in Wuhan Optics Valley was officially put online, becoming the first domestic 8-inch gallium nitride on silicon Micro LED chip pilot line. The project can achieve a production capacity of 12,000 8-inch silicon-based gallium nitride wafers per year. At the same time, the production line is highly compatible with the 8-inch CMOS semiconductor chip process, and the products can be applied to AR/MR glasses.

Companies in the consumer end market are also accelerating “self-built factories.” In June, Thunderbird's innovative Micro LED light machine intelligent manufacturing factory was officially put into production, achieving independent control of core components. In September, Micro LED AR glasses company Rokid signed a contract to settle in Zhuhai to build its own production base, focusing on the Southeast Asian market.

Qiu Yubin said that China has become the core force in the development of the global AR glasses industry. Represented by brands such as Thunderbird, Yingmu, and Rokid, domestic AR glasses products are rapidly iterating, which fully demonstrates that China is not only supporting the entire industry. AR glasses manufacturing and design, and even supply chain integration are all radiating from China.

"The domestic AR glasses supply chain is currently turbulent. There are many companies in the field from light sources to light engines, optical components and systems. Next, we will gradually see horizontal cooperation or vertical integration, and many resources will be integrated into parts, allowing each manufacturer to have more concentrated resources to develop AR glasses products, make the design more refined, and reduce the cost." Qiu Yubin said.