Small pitch LED display report: showing trends

The birth of the small-pitch LED display marks the official entry of LED display technology into various indoor applications. The small-pitch LED display technology will quickly enter indoor applications in the next few years due to its advantages of seamless stitching, excellent display performance, continuous semiconductor technology advancement and cost reduction. In the next five years (2014-2018), the market-scale compound growth rate of small-pitch LEDs will reach 110%.

The essence of LED technology is a diode-based semiconductor technology that emits light self-illumination. In terms of material use and fabrication process, it has some differences from integrated circuit products based on CMOS (Complementary Metal Oxide Semiconductor) and the structure is also simpler.

LED is a kind of diode with PN junction structure. After adding a specific voltage between the two poles, it can make electrons transition from high energy level to low energy level. According to the law of conservation of energy, light energy will be released, and different materials have different The bandgap (Bandgap) determines the wavelength of light emitted when the mat has an energy level transition, forming visible light of different colors.

The history of LED has reached 100 years, and the breakthrough in technology and the large-scale commercial use are in recent years. Since the British Henry JosephRound first observed the electroluminescence phenomenon in the broken baby in 1907, LED technology has experienced long-term development and improvement, and has been widely used in the fields of liquid crystal display backlight source, indoor and outdoor illumination and information image display. .

LEDs have a wide range of downstream applications, with the highest proportion of illumination, backlighting and display, which can be seen in the subdivision of LED packaged devices. According to LEDinside's forecast, the global output value of high-brightness LED packaged devices in 2014 will reach 14.4 billion US dollars. In each downstream application, the proportion of packaged devices for LED display is 12%, and the corresponding output value is about 1.73 billion US dollars, corresponding to about 10.7 billion yuan. It is expected that with the advent of smaller-pitch LED displays, LED display applications will begin to move indoors from the outside, and the application field will be significantly broadened. The high growth rate in the next few years is expected to increase the proportion of LED displays in all downstream applications of LEDs.

The evolution of LED display technology

Compared with other display technologies, LED display has the advantages of self-illumination, excellent color reproduction, high refresh rate, power saving, and easy maintenance. However, the high brightness and large size can be used to determine the LED display in the past. The fundamental factor of high-speed growth, in the field of large-screen outdoor display, there is currently no technology to compete with LED display. However, in the past, LED displays also have their shortcomings, such as large spacing between packaged devices (light beads), resulting in lower resolution, only suitable for outdoor long-distance viewing; if you want to improve the resolution, you need to reduce the spacing between the beads. As the size of the lamp bead is reduced, although the resolution of the entire screen can be improved, the cost will rise rapidly, and the excessive cost makes the small-pitch LED display not have a large-scale commercial basis. However, this problem has been significantly improved now. Similar to LED lighting, the LED display of semiconductor properties has rapidly declined with the advancement of technology. At present, the price of display with smaller pitch has been reduced to a basis for mass popularization.

According to the display color, the LED display can be divided into a single primary color LED display, a dual primary color LED display, and a full color LED display.

In the field of LED display screens, the first appearances are monochrome (red or green) and two-color (red plus green) displays. The packaged lamp beads form a matrix screen, which is mainly used to display text information and simple graphics. It is still widely used in information displays such as trains, bus stations and other transportation hubs, banks, insurance companies and other business halls.

With the advancement of LED technology, a full-color display capable of displaying complex images has begun to appear. In a packaged device, three chips of red, green and blue light are included to form three primary colors, and the current of the three chips is adjusted. Achieve different levels of light from each chip, enabling thousands of colors to be displayed.

Due to the characteristics of LED display, it is mainly used for large-size and long-distance display, and most of them are used outdoors and are less used indoors. From the perspective of downstream applications, advertising accounts for one-third of the total, mainly installed in places with high traffic, such as large commercial centers, high brightness of LED display and excellent color reproduction, making it suitable for outdoor advertising. Promotion can get a good visual effect.

The second largest application area is stadiums, such as the football league stadium and the display screen of the NBA. In addition to advertising, it can also be used to achieve score display and lens playback. The LED display is used for stage performances, and its high brightness, high color gamut and contrast provide a good atmosphere. In addition, as the cost has decreased year by year, the conventional information display has also begun to adopt LED display screens on a large scale.

Small pitch LED display

With the shrinking of the LED full-color display package device and the rapid decline of the whole screen cost, the products with smaller spacing continue to enter the market, and the application of the LED display begins to enter the room from the outside.

The outdoor display and the indoor display have different requirements for the display screen due to different application environments, and the resolution, that is, the pixel pitch is an important factor. For the LED display, each self-illuminating packaged device, the lamp bead, is a pixel, so the distance between the two bead determines the resolution of the LED display per unit area. Generally, the industry will indicate the model number of the product by the distance between the beads. For example, the P10 product indicates that the distance between the two beads of the screen is 10 mm (mm).

Because the outdoor space is large, the viewing distance of the audience is generally far, and the human eye has a certain resolution limit. Therefore, even when the distance between the LED display screens is far away, the requirements can be met. Since the indoor space is limited, the viewing distance is generally smaller than that of the outdoor. Therefore, a display with a smaller dot spacing can satisfy the user's requirement for resolution, otherwise the viewing effect will be affected.

Since the human eye has a certain resolution, it is theoretically possible that the minimum pixel pitch that can be resolved by the human eye at a certain viewing distance can be calculated by the human eye imaging principle.

In the case of normal brightness and contrast, the limit of the human eye's ability to resolve pixels is about 1' (1/60 of 1 degree angle, called 1 point), assuming that the screen height is H, the viewing distance is D, and the screen height When the direction resolution is n, the pixel pitch is H/n, and the angle of view formed in the human eye is arctg(H/n/D). If the angle of view is less than 1', it exceeds the resolution limit of the human eye.

Conversion based on angle and radians:

In fact, the "retina" screen used on the Apple iPhone is based on this principle. The pixel spacing of the LCD screen exceeds the limit of the pixel distance of the human retina in the distance of the conventional viewing mobile phone.

In different indoor applications, there are different viewing distance requirements, so the demand for LED display dot spacing is generally different, but after a certain distance from the human eye's resolution limit, a smaller pitch product will have no practical significance.

Since the advantage area of ​​the LED display is a large screen display of 110 inches or more, and even if the 4K high definition display effect is achieved on the 110 inch, the 0.634 mm dot pitch product can meet the requirements, so we believe that

0.634mm is the limit spacing of the small-pitch LED display determined by downstream demand, and smaller spacing will have no practical significance.

Since the farthest viewing distance in the room is generally 10 meters, and the product with a dot pitch of 4mm (P4) can meet the viewing requirements, in the following research, we define the LED display products with a dot pitch of less than 4mm as a small pitch LED display. Screen, its mainstream models include P4, P3.5, P3, P2.5, P1.9, P1.6, P1.4 and so on.

The global LED display market pattern is accompanied by the advancement and maturity of LED technology. The global LED display market has expanded rapidly. Although it experienced near-zero growth due to the global financial crisis in 2009, the growth rate soon returned to more than 20% in 2011. . In 2013, the global LED display market was about 40.5 billion yuan.

Among them, China's LED display market has the highest proportion in the world. In 2013, China's LED display market reached 19 billion yuan, accounting for nearly 50%, and in the past few years, China's LED display market growth rate has always been higher. Global growth rate.

We believe that with the advent of small-pitch LED displays, LED display technology will move into indoor applications from outdoor applications, opening up a new broad market. It is expected that the scale of China's and global LED display market will continue to grow rapidly in the next few years.

Looking at the world, the market concentration of LED displays is low. The largest global LED display manufacturer is the US company Daktronics, but its market share is no more than 10%, and 82% of its revenue comes from North America (2013 data). The second-largest LED display sales in Barco, Belgium, is only slightly higher than that of China's leading domestic companies.

According to the total regional output value, China's LED display manufacturers have already occupied the highest share in the world, benefiting from cost advantages and responsiveness, and relying on the huge market of mainland China. At the same time, from the perspective of market share changes in recent years, Chinese display manufacturers are using their advantages to squeeze the market share of overseas companies. China's leading LED display companies, Liard, Ai Biesen and Chau Ming Technology, are not only growing faster than foreign competitors, but their overseas business accounts for an increase in operating income.

In 2012, 44 LED display manufacturers in mainland China earned more than 100 million yuan, an increase of 4 from 2011. Among the 44 companies, 26 companies have revenues of more than 200 million yuan, and 5 companies have revenues of more than 500 million yuan.

China's LED display companies have significant global competitive advantages

In order to better understand the competitive advantages of China's LED display companies, we will implement the scale of the two leading enterprises of Daktronics and Barco and the leading Chinese companies such as Liad, Ai Biesen, Chau Ming Technology and Lian Jian Optoelectronics. And the comparison of profitability and other aspects.

By comparing the annual revenue scale and revenue growth of LED display manufacturers at home and abroad, it can be seen that the growth rate of China's LED display companies such as Liard, Ai Bison and Zhou Ming Technology is higher than that of the global industry leader. The gap with foreign giants is narrowing and market share is shifting to domestic companies.

In 2010, the sum of the income of the two overseas companies was 2.4 times that of the four Chinese companies; by the first half of 2014, this number had become 1.4 times. From the perspective of revenue growth, Daktronics and Barco's revenue growth rate for the three years from 2011 to 2013 were 8.8% and 3.2%, respectively, while Liard, Ai Biesen, Chau Ming Technology and Lianjian Optoelectronics were domestic. The three-year revenue growth rate of enterprises is as high as 26.7%, 40.2%, 9% and 21% respectively.

The advantages of China's manufacturing industry are fully reflected in the profitability of LED display companies at home and abroad. Compared with Dakoo and Barco, the leading overseas companies, the profit margins of the four large LED display companies in China are significantly higher. The average value of the gross profit margin and net interest rate of the four domestic companies in the first half of 2014 are respectively 33% and 12%, while Daktronics' gross margin and net profit margin were only 25% and 3%. Barco's LED display business suffered a loss. In the first half of 2014, the gross profit margin was only 10%.

The difference in the level of profitability of domestic and foreign companies also explains why Chinese display companies can still obtain considerable profit margins in overseas markets, that is, using products below the price of foreign leaders to sell products to seize the market. We believe that low cost and high efficiency together create the global competitive advantage of China's LED display manufacturing industry.

In addition, we also see that the sales price of LED display screens in overseas markets is higher than that of China's domestic market. The profit margin of LED display companies based on overseas markets is higher than that of domestic market-oriented enterprises. Taking Abbyson Optoelectronics, which operates both domestic and overseas markets, for example, during the period 2011-2013, the gross profit margin of overseas sales remained at around 40%, while the domestic market was only around 22%. The same or similar supply chain and raw materials correspond to different profit margins of the products, indicating that the LED display screens are sold at higher prices in overseas markets.

We believe that with the cost advantage, high efficiency production and competitive supply chain response speed, China's LED display manufacturing market share will continue to increase in the world.

Under the impact of Chinese enterprises, there are two development directions for foreign LED display giants in the future. One is to transform into channel vendors and integrators, divest manufacturing and purchase products from advantageous enterprises, such as Danish old LED display companies. ProShopEuropeA/S is the way to go. Since 2010, the company has purchased from China's LED display companies.

Another way out is to gradually withdraw from the highly competitive and low-margin LED display market, which is also the direction that some foreign companies are considering.

LED display industry chain

From the perspective of the LED display industry chain, the core components from upstream to downstream mainly include RGB three-color optical chips, full-color package devices, driver ICs, multi-layer PCB boards, cabinet kits, and display cards (send/receive cards). And video control systems, etc., involving more related companies.

Among all components, the highest cost ratio is the packaged device, that is, the lamp bead. According to the product spacing specification, the lamp bead can account for 20% to 70% of the total cost. The second component is the PCB board that carries the lamp bead, the driver IC that controls the lamp bead display (shading, grayscale), the cabinet material, the power supply, and the control system.

According to different packaging technologies, the packaging process of LED display bead can be roughly divided into three categories:

1. In-line package: The bracket is used as the main material of the package. One end is a spherical structure for placing the lamp bead, and the other end is a pin for inserting on the mold. The in-line packaged device is mainly used for outdoor display products with a pitch of more than 8mm. The advantage is that the brightness is high, and it is easy to achieve waterproof and dustproof. However, the disadvantages are also obvious, and it is difficult to achieve high-density display.

2. Dot matrix package: The LED chip is formed into a matrix, soldered on a PCB board to form a module, and then connected with external devices. The advantages are good flatness, high reliability and excellent protection level. The disadvantage is that the production process is slightly complicated and the material quality is high. Can be used for outdoor display and indoor display, generally used for display with density greater than P3.

3. Surface-mount package: The biggest feature is high degree of automation, can be directly used in SMT high-speed placement machine, and has advantages in the production process of high-density display, so it is mainly used for high-density indoor display. The advantage is that the color consistency is better, but it needs to be strengthened in the degree of protection.

The small-pitch LED display screens, which are mainly used in the indoor field, generally use surface-mount packages, because the number of beads to be processed increases geometrically with the pitch reduction, and the surface-mount package can be automated using a high-speed placement machine. produce.

As the pixel pitch of the LED display is reduced, the number of lamp beads per unit area is increasing, which makes the proportion of the lamp bead in the whole screen increase. According to our calculations, in the small-pitch LED display P1.9 and smaller pitch models, the cost of lamp beads has reached more than 70%.

It is worth noting that the price difference between different levels of components is very large, up to double or even several times. Therefore, the display screens of the same specifications of different enterprises often have different cost and price, such as P2.5 size small pitch LED display. Products with imported high-end components such as lamp beads and driver ICs can be sold twice as long as the same specifications of low-end components.

At present, among the core components of LED display, the high-end market of chips and packaged devices with the highest technical content is still occupied by foreign manufacturers, and the low-end products belong to the main market of Chinese enterprises; the driver ICs and PCB boards with slightly lower technical barriers The degree of localization is higher. We believe that the mainland LED display industry chain enterprises are rapidly catching up with foreign leaders in terms of both production capacity and technological advancement. With the rapid rise of China's LED display industry chain, the localization of various components is becoming higher and higher. .

In the small-pitch LED display market incubation period, the first companies to introduce small-pitch products mainly use the lamp beads of Taiwan's packaged device supplier Yiguang Electronics, and there is basically no other choice. With the outbreak of the market in the past two years, more and more domestic packaging companies have begun to enter the field. At present, China National Star Optoelectronics and Jingtai Optoelectronics, the monthly capacity of 1010 lamp beads for small-pitch LED displays are at or near Yiguang's production capacity will continue to expand according to market demand.

We believe that with the improvement of technology and production capacity of domestic packaging companies, the localization of packaged devices for small-pitch LED displays will be promoted in the next few years, which will effectively push smaller products to reduce costs and enter the market, replacing traditional indoor display technologies. . With the rapid expansion of market cakes, overseas packaging faucets are also expected to enter the field, forming a benign competition in the packaging device market, promoting technological progress and cost reduction.

Semiconductor properties of LED displays

The most important feature of semiconductor-based products is the continuous advancement of technology, including advances in process technology and advances in materials technology. The end result is improved performance and cost reduction of the final product.

Among all the cost components of LED displays, components closely related to semiconductors, including LED chips, packaged devices, driver ICs, control systems (transmit/receive cards), etc., have experienced rapid declines in cost over the past few years. trend.

For example, we use the full-color SMD3528 lamp bead widely used in the P5-P10 specification display in the industry. Its price has dropped by 36% from 2008 to 2014. The price of 1010 lamp beads, which are widely used in P2.5-P1.6 small-pitch LED display, also showed a rapid decline, with a compound annual decline of nearly 40%.

We believe that for small-pitch LED displays, the cost of the lamp beads is already high, so the rapid decline in the price of the lamp beads helps to promote product popularity.

In fact, the downstream applications of LED's two subdivisions – LED lighting and LED display – have benefited from the decline in LED chip prices, but this situation will begin to differentiate in the future. For LED lighting, on the one hand, the price of LED chips has dropped rapidly in recent years. On the other hand, the cost of other materials is slightly rigid. Therefore, in recent years, the proportion of chips in the final cost of LED lamps has dropped rapidly.

The LED display is different. With the introduction of the smaller pitch LED display, the number of lamp beads increases geometrically, and the LED chip is the largest part of the cost structure of the lamp bead, so the cost of the chip and the lamp bead is in the whole screen cost. The proportion of the increase is actually increasing. We expect that in the future, in the small-pitch LED display market, the trend of smaller and smaller spacing LED displays will be smaller and smaller.

The cost of LED display bead (especially for small-pitch LED display) is reduced by several factors:

1. The cost of LED chips, which account for a relatively high cost, has fallen. LED chip costs account for about 30% to 40% of the cost of the entire lamp. With the advancement of upstream LED chip technology, capacity expansion and MOCVD equipment production efficiency, the decline in chip prices will drive down the price of packaged devices.

2. The cost of advanced production and packaging technology has declined. LED displays currently have a tendency to develop to smaller pitch products, and it is necessary to develop smaller package devices to meet the requirements. At the beginning of new products, due to problems such as technology and yield, prices tend to be higher, and with large-scale Production, is expected to achieve technological progress, scale effect and thus reduce costs. Similar to integrated circuit packages, LED packaging technology has always been advanced, in terms of packaging and packaging materials, which will bring better performance, stability and lower cost to packaged devices.

3. Industry competition has intensified; the degree of localization has increased. On the one hand, we believe that with the rapid increase in the market size of small-pitch LED display, more and more global packaging leading companies will enter the field; on the other hand, Chinese LED packaging companies are also rapidly cutting into the supply of small-pitch packaging devices. chain. Compared with foreign companies, domestic LED packaging companies have cost advantages, efficiency advantages, and supply chain advantages, and domestic manufacturing companies can accept lower profit margins than their foreign counterparts. With the increase in production capacity of LED display packaging device suppliers at home and abroad, it is expected to push down the price of lamp beads. In addition to the lamp beads, among the core components of the LED display, the chips in the driver IC and the control system are all semiconductor products. With the progress of the process technology, the cost is rapidly decreasing, and the price of the structural parts such as the box is Relatively stable, because its main material cost has a certain rigidity.

We believe that the strong semiconductor properties of LED displays make their cost drop rapidly, and smaller pitch products are continuously introduced, which in turn stimulates potential market demand and achieves a steady and rapid growth in market size.

We expect that as the cost of LED display is gradually reduced, on the one hand, the original outdoor market will continue to grow steadily; on the other hand, products with smaller spacing will enter indoor applications and open up new broad markets.
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