From its origins in high-end applications to its gradual expansion into the mass market, Mini LED technology has made significant strides not only in consumer electronics but also in a wide range of industries. In 2024, this technology continues to grow robustly, with explosive growth in sectors ranging from the television market to automotive displays, showcasing its vast potential.
However, behind this surge, is it the result of a subsidy-fueled boom or the beginning of a new era of technological innovation? Can Mini LED carve out a space in the high-end market traditionally dominated by OLED?
Vertical Integration of the Mini LED Supply Chain: Driving Down Costs Across the Industry
Mini LED technology has enhanced traditional backlighting by using smaller chips and tighter pixel pitch, which improves display quality. With technological advances, production costs have decreased, further promoting widespread adoption.
The Mini LED industry spans multiple stages, including upstream LED chips, driver ICs, downstream backlight modules, and final end products. As the demand for Mini LED grows, a clear trend toward vertical integration has emerged within the industry, with backlight modules becoming the most valuable and technically advanced part of the supply chain.
Upstream Chips: Rising Technical Barriers and Soaring Demand
Mini LED chip sizes have been reduced to 100-300 microns, demanding higher precision in production, testing, and sorting processes. The growing demand for these chips has prompted manufacturers to scale up production.
In recent years, significant progress has been made in reducing costs for key components in Mini LED backlighting, particularly Mini LED chips and PCBs:
- Mini LED Chips: By improving the Pitch/OD value, manufacturers can reduce the number of Mini LED chips while maintaining brightness, thus achieving cost reduction. Current cost-saving solutions include:
- Increased light angle: Domestic chip manufacturers have incorporated Distributed Bragg Reflector (DBR) structures into LED chips, using optical designs such as mini-lenses and large-angle lenses.
- High-voltage chip solutions: These improve power, reduce driving current, enhance luminous efficiency, increase the number of LEDs in series, and simplify PCB layout to reduce costs.
- PCBs: In traditional Mini LED backlighting, PCBs account for about 30% of the total cost, providing significant opportunities for cost reduction. Two widely adopted cost-reduction methods include:
- Using more affordable materials, such as aluminum-based PCBs for TVs.
- Implementing custom-shaped PCBs to improve board utilization, such as optimizing designs from full-size PCBs to fishbone or strip shapes to save manufacturing costs.
Industry data shows that Mini LED chip prices have continuously decreased since 2019 and are expected to maintain an annual decrease of around 20% in the coming years.
Midstream Packaging: COB Technology Leads, POB Offers Cost Advantage
In the packaging segment, COB (Chip On Board) technology has become one of the leading techniques in the Mini LED display field. By directly mounting LED chips on a board, COB can achieve higher pixel density and smaller pixel pitch, making it suitable for high-precision, high-density display applications. Compared to traditional SMD (Surface-Mount Device) packaging, COB offers significant advantages in display quality and cost control.
However, POB (Package On Board) packaging also offers certain cost advantages. POB simplifies the packaging process and optimizes existing production capacity to deliver competitive parameters at reasonable costs, making it more suitable for large-scale, mid-to-low-end product production.
Downstream End Products: Product Upgrades and High-End Trends
s consumer demand for larger and high-end TVs continues to rise, Mini LED TVs have shown a clear market trend toward larger screens and premium features. In the first three quarters of 2024, the domestic Mini LED TV market penetration rate surpassed 10%, showing a rapid growth trend with sales up 4.4 times year-on-year.
Domestic TV brands like Hisense and TCL have continuously upgraded their product structures by incorporating Mini LED technology, offering higher brightness, more refined images, and thinner designs to attract a large number of consumers. With the further maturation of Mini LED technology, prices are becoming more affordable, lowering the barrier for consumers to purchase Mini LED TVs. The future development of Mini LED TVs in China will likely face challenges in cost reduction and image quality improvement as the upstream and downstream supply chains work together.
Subsidies and Technological Advancements Drive Faster Mini LED Penetration, Facing OLED Challenges
In 2024, Mini LED technology has benefited from both technological advancements and government subsidies, accelerating its market penetration. The Chinese government’s subsidy policies, especially those promoting trade-in programs for home appliances, have accelerated the adoption of Mini LED TVs. As the cost of Mini LED backlighting technology decreases, the price is gradually falling, making it accessible to the mid-to-low-end markets and attracting more price-sensitive consumers.
It is expected that by 2024, the penetration rate of Mini LED TVs will reach 12%, with companies such as BOE and Samsung integrating upstream and downstream resources to further reduce production costs and push Mini LED to become the mainstream TV technology. As the technology matures and prices continue to decline, Mini LED will see further market penetration across various sectors.
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