The Zhitong Finance App learned that Guojin Securities released a research report saying that Micro OLED has outstanding advantages (small size, light weight, low power consumption, high pixel density), benefiting from XR industry demand, and rapidly expanding market size. The bank expects global XR micro OLED shipments to exceed 23 million units in 2027, with a penetration rate of 30%, a market size of 4.1 billion US dollars, and a five-year CAGR of 136%. Currently, Sony has the highest share in the industry, and domestic manufacturers are expanding production at an accelerated pace. According to the estimated investment amount of 1 million micro OLED devices and 80% capacity utilization, the additional investment is expected to reach 5.6 billion yuan from 2023-2026, and equipment investment can be expected in the future.

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Guojin Securities's views are as follows:

Demand side: Benefiting from Dongfeng in the XR industry, the micro OLED market is expected to reach 30 billion in 2027

The micro OLED display device structure consists of a driving backplane and an OLED display front end. Manufacturing includes silicon-based IC design and manufacturing (CMOS process), OLED manufacturing, OLED packaging process, system development and module engineering. Micro OLED technology has the advantages of small size, light weight, low power consumption, high pixel density, high contrast, and fast response speed. It is mainly used in near-eye displays and projection display systems. In the early days, the downstream micro OLED was mainly for military use, and the industry is expected to develop rapidly along with the development of the VR and AR industries.

The Vision Pro released by Apple in 2023 uses 2 Sony 4K Micro OLED screens. The cost is 700 US dollars, and the BOM cost accounts for 46%, making it the most valuable part. The future Meta Quest 4 is also expected to use a micro OLED screen.

According to Wellsenn XR, XR shipments are expected to be around 7.6 million units in 2023. According to Counterpoint, benefiting from the release of Vision Pro, an additional 3.9 million XR units are expected to be shipped in 2024, corresponding to 11.5 million XR shipments in 2024, an increase of 51%. The bank expects to ship 38.81 million XR units in 2027, with a five-year CAGR of 30%. According to Qunzhi Consulting, global XR micro OLED panel shipments totaled 430,000 pieces in 2022, doubling year-on-year, with a penetration rate of 3%, benefiting from the release of new products such as Apple and Meta. The bank expects the micro OLED penetration rate to continue to increase, reaching 30% in 2027. The global market size of micro OLED for XR will be US$26 million in 2021, corresponding to the increase in the share of high-end product shipments, 2023, 2024 The bank expects the average price of the industry to decline after 2025 due to the increase in yield and scale effects. The global micro OLED market for XR is expected to reach US$4.1 billion in 2027, with a five-year CAGR of 136%.

Supply side: Japanese and South Korean companies account for the largest share. Chinese manufacturers are speeding up the deployment of the Micro OLED industry chain, including upstream raw materials, assembly parts, manufacturing and testing equipment, midstream Micro OLED panel manufacturers, and various downstream terminal applications.

The equipment and raw materials for the upstream array and evaporation process mainly rely on foreign manufacturers such as Japan, South Korea, and the United States, and a small number of Chinese manufacturers have replaced domestic products. Micro OLED midstream display manufacturers have entered the market earlier and are technologically mature. Japanese and South Korean companies represented by Sony account for the largest share, and Chinese manufacturers have accelerated their layout and continued to expand their market share.

According to Qunzhi Consulting, Sony's largest share of global micro OLED shipments reached 65% in 2022. Domestic manufacturers Shiya Technology, BOE, and Guozhao Optoelectronics accounted for 10%, 8%, and 3% respectively. Sony accounted for 78% of the global XR micro OLED shipment share in 2022, while Epson and Shiya Technology accounted for 20% and 1% respectively. Judging from the current domestic production capacity, Shiya Technology, BOE, and Qingyue Technology currently have the largest production capacity. Judging from the planned production capacity, Xitai Technology, BOE, and Lakeside Optoelectronics have high targets.

In terms of investment amount, with reference to Hefei Shiya's investment of 1.28 billion yuan, the 12-inch wafer design production capacity reached 9,000 pieces/month, BOE invested 3.4 billion yuan, and the 12-inch wafer design production capacity reached 10,000 pieces/month; according to 1-inch screen cutting, considering 50% yield, 1 12-inch wafer can cut 56 screens; the corresponding investment amount of 1 million XR reached 400,000 yuan.

Risk warning: New technology updates and iterations; supply of some raw materials and equipment falls short of expectations; market competition intensifies; downstream demand falls short of expectations.