Market Insight

First Micro LED mass production facility in China planned through joint venture between Leyard and Epistar

January 07, 2020  | Subscribers Only

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On December 25th 2019, Leyard Group and the Taiwanese LED chip manufacturer, Epistar Group, announced their collaborative efforts to build the world’s first Micro LED mass production base in Wuxi, China.

Leyard and Epistar will invest 1 billion RMB ($143 million), and will focus on design, research, development, production and sales in mainland China.  This announcement states initial production starting in 2020, with the objective of mass production in 2023.

Our Analysis:

The number of display brands entering the fine pitch LED display market continues to rise, especially as demand surges for videowalls within digital signage applications spanning a wide array of vertical markets. The evolution of fine pixel pitch products below 1mm promotes innovation and new avenues for collaboration and partnerships among brands for both Mini and Micro LED displays. IHS Markit defines Mini LEDs as RGB LED whose “size” of sub pixel chip is greater than 100μm, whereas Micro LEDs is defined as RGB LED whose “size” of sub pixel chip is equal to or less than 100μm.

The Micro LED display market is still in its infancy and many verticals are not ready to adopt this expensive technology. Demand for Micro LED displays is currently limited, due to its extremely high cost and low uniformity. However, its key advantages are smaller pixels, high contrast ratio, lower power consumption, high luminance efficiency and quick response time.

The announcement from Leyard and Epistar validates our previous market insight regarding Leyard’s unveiling of their 54” 1920 x 1080 Micro LED display last year at InfoComm China. As one of the leading LED video manufacturers, Leyard ranks third in 2019 global shipments, according to IHS Markit’s LED Video Displays Market Tracker for Q3 2019. Moreover, Leyard leads global sales of <=0.99mm pixel pitch category, nearly doubling shipments in one year, largely driven by the China region.

A few days before Leyard and Epistar’s announcement, Liantronics also signed a strategic cooperation framework agreement with Konka to establish a joint venture aimed at accelerating the commercialization of Mini and Micro LED solutions. Under this joint venture, the companies plan to invest 100 million RMB ($14.3 million), a tenth of the amount Leyard and Epistar are planning to spend. In their announcement, Liantronics and Konka expect their joint venture to generate over $1 billion of sales revenue in the next 5 years from 2021 through 2025.

In fact, Konka showcased their Micro LED TVs “Smart Wall” displays in both 118” 4K TV and 236” 8K TV with 0.6mm pixel pitch at the Consumer Electronics Show (CES) 2020 in Las Vegas. Konka's Smart Wall TVs use more than 100 million Micro LED chips to reach a brightness of 2,000 nits and high contrast of 10 million:1 with 147% of DCI-P3. 

Source: IHS Markit - CES 2020

BOE Technology Group Co. Ltd. also just announced a partnership with Rohinni, a micron-scale electronics company, to launch BOE Pixey, a joint venture focused on development and innovation opportunities for both Mini and Micro LED technology. BOE Pixey will manufacture LED backlights for LCD displays, direct emission displays and sensors for videowalls, TVs and other products. The combination of Rohinni's Mini and Micro LED manufacturing process, along with BOE's industry expertise of display panels, will allow the companies to manufacture ultra-thin displays with its Mini LEDs.

These announcements strengthen further industry consolidation and growing investment in Micro LED products. IHS Markit expects similar announcements to be released as Integrated Systems Europe 2020 draws near. As the LED video market matures, brands involved at different levels in the supply chain or even experts in different verticals will be required to collaborate with one another to achieve new technology advancements, develop their presence in new markets, and diversify their products to set themselves apart from competing brands.

IHS Markit does not currently track shipments by LED chip size, but we believe <=0.99mm represents the Micro/Mini LED market size to some extent. Based on the latest iteration of our LED Video Market Tracker, IHS Markit forecasts revenue for <=0.99mm LED video displays to reach nearly $600 million by 2023, largely driven by strong growth in China through the longer-term forecast. Currently, <=0.99mm market demand is limited to specific high-performance applications in corporate, control room, public space and retail sectors. In Q3 2019, the corporate vertical market captured nearly 65.5% of global revenue share. In the longer term forecast, IHS Markit expects corporate and control room applications to continue to claim the largest portion with a combined global revenue share of 82.2% in 2023.

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