On January 13, Tianma responded to investors’ questions regarding the progress of its T19 and T20 production lines, as well as its Micro LED business, automotive display business performance, and future plans during an investor relations event.
The main contents of the communication are as follows:
1. Please introduce the company’s business revenue situation.
A: The company’s downstream application markets primarily include consumer display fields such as smartphones, IT, and smart wearables, as well as professional display fields like automotive, industrial, and medical displays. As of the first three quarters of 2024, the company’s overall revenue has remained stable, with the automotive display business accounting for about 35% of revenue, showing a year-on-year growth of over 40%. The structure of the smartphone display business continues to optimize, with revenue from the TM17 flexible AMOLED smartphone display business exceeding 20% of the total, showing a year-on-year growth of over 25%.
2. Please introduce the company’s performance and future plans in the automotive display business.
A: In 2024, although the terminal automotive market is under pressure due to intense competition and price challenges, the automotive display market continues to grow steadily with the active promotion of new energy vehicles, increasing penetration of intelligent cockpits, and growing demand for new scenarios. As of the first three quarters of 2024, the company’s automotive display business has continued to grow rapidly, maintaining the leading position in the global automotive-grade market, the instrument market, and even becoming the leader in the HUD head-up display field. The company’s automotive business revenue grew by more than 40% year-on-year, with the automotive electronic business for international automakers entering mass delivery. Additionally, the company’s share in leading new energy vehicle clients continues to increase, all of which strongly support the rapid expansion of the company’s automotive display business. Meanwhile, LTPS technology is rapidly penetrating the automotive display field, with the company’s LTPS automotive display revenue growing by more than 250% year-on-year. By the third quarter of 2024, the company has accumulated a significant number of new opportunities, covering OLED, Local Dimming, automotive electronics, new energy, and other business areas, as well as cutting-edge products such as panoramic head-up displays.
3. What are the company’s future plans for AMOLED flexible smartphone displays?
A: The company has a strong customer base in the flexible AMOLED smartphone display field and continues to deepen its partnerships. With the further release of its high-end capacities in HTD, folding, and other areas, the company aims to strengthen its technological innovation capabilities for flagship and high-end products, expand its coverage of key client flagship projects, increase the share of high-end products, and continuously improve product competitiveness.
4. What is the progress of the company’s Micro-LED business?
A: Currently, the company’s Micro-LED business is focused on automotive display and splicing display applications, while also exploring large-sized screens, consumer displays, wearable displays, and professional display applications. The company has begun innovative project collaborations with leading automotive companies, PID terminal manufacturers, and consumer brand customers. It has also launched its first product in the PID field in collaboration with partners. The company’s Micro-LED production line achieved product lighting on June 26, 2024, and completed full-process integration by the end of 2024, with small batch production expected by the end of 2025.
5. Please introduce the progress of other new production lines.
A: The construction of the company’s new production lines is progressing steadily. The TM19 and TM20 production lines are actively advancing product development and customer integration, with various types of products already in the pipeline. The first batch of MNT modules was shipped on November 29, and automotive module products have been delivered to customers. The company will continue to steadily release production capacity and ramp up operations.
6. How is the company performing in non-display businesses?
A: The company is actively developing non-display application technologies based on panel processes and TFT drive technology. It has established the MPG platform (Multi-Project Glass Substrate Technology Platform) and is steadily advancing technological development and cooperation with industry partners in areas such as panel-level metamaterials, microfluidics, intelligent dimming, large-area fingerprint recognition, and flexible sensors. These technologies are expected to expand into broader applications. Currently, the relevant businesses are still in the incubation and nurturing phase, with some technologies already in small batch production. The company will continue to explore market demands and optimize product solutions.
7. With the company’s improving profitability, there is still room for growth in gross margin and net margin. What measures is the company taking?
A: As of the first three quarters of 2024, with the continuous refinement of product specifications, ongoing optimization of product structure, and rigorous cost reduction efforts, the company’s overall gross margin has shown a quarter-on-quarter increase. Notably, the flexible AMOLED smartphone display business, which has a significant impact on profits, has seen a quarter-on-quarter improvement in profitability, with the TM17 flexible AMOLED smartphone display business achieving a positive gross margin in Q3. Additionally, the scale development and value enhancement of the company’s automotive business has further expanded the profit scale of the automotive display business, driving continuous improvement in the company’s gross margin. The company will seize industry opportunities, continue technological innovation, increase the proportion of high-value-added products, accelerate the development of new product lines such as medium-size displays, strengthen cost optimization efforts, and continuously optimize the product structure to enhance its overall competitiveness.
8. Please introduce the company’s development plans.
A: The company adheres to the “2+1+N” development strategy, focusing on mobile display and automotive display as core businesses [2], IT displays as key areas for rapid growth [1], and industrial products, horizontal sub-segments, non-display businesses, and ecosystem expansion as value-added businesses [N]. The company is committed to strengthening the display business and expanding it. In response to future technological upgrades and market growth potential, the company is continuously making long-term strategic layouts. In 2022, the company announced the investment in the automotive display R&D center (Wuhu), the 8.6 generation panel production line (TM19, Xiamen), the new display module production line (TM20, Wuhu), and the full-process Micro-LED line (Xiamen), covering the company’s advantageous fields in automotive, industrial, and IT displays, as well as the future blue ocean market in Micro-LED. By responding to market demand, the company is actively expanding production capacity and improving product specifications, while also making forward-looking arrangements in new products and technologies, aiming for medium- and long-term growth. These efforts will further strengthen the company’s long-term competitiveness in the new display field and solidify its competitive advantage in the small- and medium-sized display market.
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