It was reported today on September 21 that Chinese LED chip manufacturer Sanan Optoelectronics has progressed faster than expected with its Mini LED chip development and might begin to supply its product to Apple’s iPad Pro and MacBook in 2021. If Sanan joins the supply chain with lower price, the business of Epistar, the Taiwan-based LED supplier who is reportedly the major Mini LED chip supplier of Apple, may be impacted. However, TrendForce said that Sanan has yet made its way into the Apple supply chain and the low price may not be the first priority of Apple for building its new Mini LED-based products.
(Image: Apple)
TrendForce indicated that Apple usually collaborates with two or even more suppliers to ensure stable shipment and to negotiate the price. For LED products, Apple is working with Epistar, Osram, Seoul Semiconductor and Nichia, who own completed patent portfolio. China’s biggest LED chip maker, Sanan, continues to send samples to Apple aiming to join the supply chain as well.
According to the industry source of TrendForce, Sanan is still at the phase of providing examples to Apple and can hardly win the order only by lower the price. For Apple, using LED products with patent is essential. If Sanan plans to break into the Apple supply chain, providing products without patent issue would be indispensable.
TrendForce also pointed out that although Chinese manufacturers possess enormous production capacity and cost advantages in the upstream and downstream LED supply chain, the dispute between the U.S. and China is still an unstable issue for Apple to choose a more stable supply chain in Taiwan. In addition, Taiwan invested in LED R&D significantly earlier than China did, meaning it leads the latter in terms of both technological maturity and patents. These advantages means less uncertainty for Apple.
Moreover, based on the strategy of Apple, it is not likely that Apple use Mini LED chip solely from Epistar as previous rumors said.
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