Apple - microLED status

Aixtron announced its financial results for Q3 2024, with solid orders and revenue, despite a slight miss on guidance due to a project delay. This project was a large order for a microLED customer, with tools shipments pushed to December instead of October.

Aixtron says that "despite the news from Apple and ams OSRAM" the microLED industry is continuing to work on the technology, and the company received orders from several customers building R&D and pilot production lines. Aixtron expects its microLED revenues in FY2024 to be at high double-digit million euros.

In March 2024, Apple decided to cancel its microLED project to develop and produce its own wearable display. Apple started developing microLED displays for wearable devices years ago, first aiming to launch the first product in 2023. The project was delayed several times, as the cost of production for microLED displays was too high for Apple, to the point where it was suggested Apple's goal is to launch the first microLED watch in 2027. But that project was cancelled.

Apple's decision made many people pessimistic about microLED displays, especially in the near term. We already posted an article speculating how Apple's decision may affect the industry. And as we also know, Apple has several other active microLED projects still under development.

A twitter account (@Jukanlosreve) that is new but said to be reputable under a different username, now suggests that Apple indeed has not given up on microLEDs. Apple is still developing an AR headset based on microLED microdisplays, which it hopes to release in 2026. The company also still plans to release a microLED smartwatch in 2026.

In February 2024, ams-Osram announced that it's cornerstone customer (Apple) cancelled its microLED project, which will have dire implications for Osram's own $850 million 8-inch microLED epiwafer factory in Malaysia. Back then ams-Osram estimated that it will have impairment charges of $650 to $900 million and it will also likely to cancel or delay some of its investments in Malaysia.

ams-Osram now announced its plans and strategy following Apple's decision to cancel its project. It seems as if the company has decided to pretty much withdraw from the microLED display market, and the only remaining microLED development efforts will focus on automotive lighting products. ams-Osram now believes that microLED displays will primarily play a role in several smaller applications that also will scale slower and later than previously expected. We also believe that microLED displays will take a longer time to mature than some in the industry have expected.

Last month Apple decided to cancel its microLED Watch project, which had very bad consequences for many microLED developers. Ams-Osram is still considering its options and it estimates its loss at $650-900 million, while Singapore-based electronics assembly solutions provider Kulicke & Soffa announced that it was also effected, to the tune of $110-130 million as it cancelled its own project with Apple.

KLA Corporation recently announced that it is withdrawing from the FPD market altogether. The company entered this market when it bought Israeli Orbotech for $3.4 billion, developer of inspection equipment for the semiconductor and display industries. 

Following Apple's cancellation of its microLED Watch project, Singapore-based electronics assembly solutions provider Kulicke & Soffa announced that its own so-called Project W (probably referring to the Watch) is cancelled, following a project cancellation by a strategic customer, likely to be Apple. 

K&S says it expects charges, including impairments, in the range of $110-$130 million, most of it due to inventory write-downs and impairment charges relating to long-lived assets.

A few days ago, Apple decided to cancel its microLED project with ams-Osram, a development that took the display industry by surprise (or at least parts of the industry). MicroLED developers are now looking to understand how Apple's decision will shape the industry, and a couple of days ago two China-based developers, Tianma Microelectronics and Konka, said that they are continuing their own microLED developments projects, as the companies are still optimistic about the future of microLEDs.

Konka has vertically integrated its supply chain and is producing its own microLED chips using Aixtron's MOCVD systems. Back in 2019, Konka announced it is building a $365 million micro-LED R&D center in Chongqing, as the company believes that Micro-LED will become the leading technology for ultra-high quality consumer TVs. Earlier that year, Konka launched tiled large micro-LED displays called APHAEA brand. Konka demonstrated several possible configurations - including 118" 4K and 236" 8K. The price of a 118" 4K display was around $240,000 while the 236" 8K TV had a price tag of $1.25 million. Click here for more information on Konka's APHAEA micro-LED TVs. 

A few days ago, Apple decided to cancel its microLED project with ams-Osram, a development that took the display industry by surprise. It certainly surprised ams-Osram, which announced it will have to re-assess its microLED strategy and incur $650-900 million in impairment charges. It is currently unclear whether Apple's decision was to completely abandon microLED technologies, or if it still in the microLED race, perhaps with different technologies and suppliers. It is likely that Apple does not have any immediate plans to introduce microLED displays, though. In this article, we'll try to analyze the reasons which led to Apple's decision and the probable implications for the microLED industry. 

Summary:

• Apple cancels its microLED project with ams-Osram
• We estimate that the main reasons are Apple's technology choice and strategy
• MicroLED production will require next-gen technologies to succeed
• MicroLEDs still pose the best route for the future display technology, but companies will need to realign their strategies

Apple worked on microLED R&D since 2014, with a first target of producing microLED smart watch displays to replace the currently-used AMOLED displays. The Company had several partners, and decided to handle some of the process in-house. It seems as if even after almost 10 years of development and intensive R&D (estimates of Apple's total investment in microLED technology so far range between $1-3 billion USD), the technology was not ready for mass production - at least not at a price that Apple can accept.

Apple started developing microLED displays for wearable devices years ago, first aiming to launch the first product in 2023. The project was delayed several times, as the cost of production for microLED displays was too high for Apple, to the point where it was suggested Apple's goal is to launch the first microLED watch in 2027.

One of Apple's main microLED partners is ams-Osram, that is building a $850 Million 8-inch microLED epiwafer factory in Malaysia. Yesterday ams-Osram announced that its "cornerstone project" (it did not name Apple specifically) got unexpectedly cancelled. This triggered ams-Osram to re-assess its microLED strategy. As a first estimate ams-Osram believes it will have impairment charges of $650-$900 million and it will also likely to cancel or delay some of its investments in Malaysia (which may actually improve the company's cashflow in the next two years).

Apple started developing microLED displays for wearable devices years ago, first aiming to launch the first product in 2023. The project was delayed several times, as the cost of production for microLED displays is still too high for Apple.

Last year TrendForce estimated that Apple will not be able to introduce its first microLED watch until 2026 - and now we hear some new reports that suggest that this won't happen until 2027 at the earliest.