On Jan. 5, Zhaochu shares received research from Changsheng Fund and Zhong Hong Hui Fu, disclosing production capacity and product layout, LED chip sales and other contents.
The specific contents are as follows.
(1) What is the current production capacity and product layout of Zhachi Semiconductor?
Chachi Semiconductor LED epitaxial wafer and chip project has been officially put into operation in the fourth quarter of 2019, and is now in full production, with a monthly production capacity of more than 500,000 4-inch wafers. In terms of products, at this stage, the main focus is on LED lighting general-purpose chips, supplemented by LED backlight chips. We plan to gradually upgrade to high luminous efficiency and high power in the lighting chip side in the future, and in addition, we will increase the proportion of backlight and direct display products. The backlight chip has been supplied to Zhachi Light Element and other companies in the same industry, and has also passed the Korean supplier certification, and will gradually enter the Korean supply chain in the future. 2020 invested in the construction of the red and yellow light chip project, is expected to gradually put into production in 2021.
(2) What is the company’s LED chip sales situation?
Chachi Semiconductor’s LED chip sales progress is relatively good, the shipment volume in the industry in the forefront, is currently full production and full sales status, part of the orders on hand because of production capacity also need to postpone supply, product prices recently according to market conditions have also been adjusted upward. In terms of customers, the current ratio of external sales is nearly 60%, and we continue to supply to domestic manufacturers and Taiwanese manufacturers, and have passed the factory inspection of Korean manufacturers and have started to supply.
(3) What are the main applications of Mini LED and what are our advantages?
There are two main uses of Mini LED, one is for Mini RGB display, the application is mainly indoor, such as traffic monitoring, TV walls, theaters, and other large displays with high resolution. This part of the market has a lot of market space, but it is expected that the application side will not be too fast, mainly because the current cost is more expensive, but his usage is very large, and once the cost drops will be a very large market. According to Yole data, the Mini/Micro LED display market is expected to grow from $2.6 billion in 2019 to $71 billion in 2030, corresponding to a CAGR of 29% from 2020-30.
Another use of Mini LED is as a backlight, which is now increasingly used in TVs, gaming screens, etc. Samsung and Sony abroad and TCL, Skyworth, and Hisense at home are also actively participating in this part of the market. According to a research report issued by CICC on December 2, 2020: “driven by Apple, Samsung and other head consumer electronics brands, the next three years Mini backlight market penetration is expected to usher in a rapid upward trend. The global backlight market is expected to achieve 61%/37% year-on-year growth in 2021/22, respectively. Overall, the backlight market is expected to grow from 22.3 billion yuan in 2020 to 64.3 billion yuan in 2025, with a CAGR of 24% in 2020-25.”
For Mini LED chips, the company has relevant technology, patent reserves, and the latest equipment in the industry available to produce Mini LED products. In terms of packaging, we have relevant utility models and invention patents, and our technical team is also senior in the industry. In addition, we also cooperate with international first-tier brands in research and development and strive to achieve the relevant technology level to international leading. The company’s Mini LED packaging products for backlight and direct display are currently in mass production, and cooperate with international and domestic well-known brand manufacturers, and will further promote Mini LED-related products in the future.
(4) Are there any patents involved in Mini LED backlight products? Are the patents restricted by the United States?
Mini LED backlight products have two light-emitting modes, one is a blue chip with QD film, which is relatively high cost and higher color gamut, and the other is a blue-chip with phosphor. The products do not involve patent issues in domestic sales, if export sales, the relevant phosphor patents are required, and there are two usual solutions, one is to buy phosphors with patents, or to obtain patent licenses. The cost of phosphor accounts for a very small percentage of the cost of Mini LED backlight products, even if there is a patent fee on the overall cost is not significant, and not subject to U.S. restrictions. Accordingly, OLED has a strong patent barrier.