What Display Daily thinks: The good news for display manufacturers is that the US has no real plans right now to view displays as being technologies that would impact its defense or security. That is definitely not the case in Korea where the freedom of job movement was curtailed for one former Samsung employee under the guise of the importance of OLED technology to the country.
That may be a very short-sighted approach by Western powers because. the display industry can, and will, transition to being a semiconductor business in the coming decade. With the emphasis on semiconductors and memory chips, the CHIPS Act is more reactionary than revolutionary. The greater concern is empowering the development of AI, particularly in countries like China, where the US government feels that it would be a strategic asset to the country’s military.
But how is AI going to interface to the real world? Primarily through more integration of AI technologies in displays and the notion that a display is part of the Internet of Things (IoT), the window of AI onto the world and vice versa.
So. there is a threat of sanctions, which are very real as we see the impact on China’s ability to procure equipment for next gen display manufacturing, but the US is not doing anything to invest in its own display industry. Investment in MicroLED and NanoLED technologies should be a priority as a defensive measure, if nothing else, but that’s not likely to happen any time soon. Optoelectronics, in general, which touches on the display industry in many ways, is an essential discipline in quantum computing. Quantum dots, which got their moment in the spotlight at the Nobel Prize, is a strategic technology.
I am not advocating for sanctions. Far from it. I am, however, dismayed that the US is doing nothing about ensuring investment in future display semiconductor technology. It would require a fraction of the monies being meted out for other semiconductor manufacturing segments. Imagine how disruptive that would be to the industry and what opportunities could arise from more ventures and investment in next generation display and optoelectronics technology.
Department of Commerce Updates CHIPS Act Rules
Overall, the rules are aimed more at leading-edge logic and memory chips, but display technologies will be impacted depending on the specific semiconductors and applications involved as well as overseas operations. Compliance will be key for display companies seeking CHIPS incentives. Theoretically, as display technologies advance, newer generations of display driver ICs, backplane TFTs, LED/OLED materials and chips, and other components may eventually fall under the critical to national security criteria as resolutions, sizes, and capabilities improve.
The immediate threat, if there is any, is to certain advanced technologies like compound semiconductors or nanomaterials which may be designated as critical to national security and subject to stricter restrictions on foreign expansion and joint research. This could impact development and manufacturing for cutting-edge display applications.
However, legacy display semiconductors using mature fabrication processes like 28nm or larger CMOS may still be permitted some foreign expansion in countries of concern under the rules. This provides more flexibility for commoditized display chips. The other opening for the display industry is that restrictions on joint research with foreign entities of concern could limit collaboration on new display technologies like MicroLEDs or quantum dot displays but exceptions allow for standards development and outsourced manufacturing which is quite a broad remit.
Nevertheless, a display panel manufacturer with fabrication facilities overseas in countries of concern may need to limit capacity expansion and notify Commerce of significant transactions under the rules if receiving CHIPS funding. That’s not a lot of companies, if any, to be concerned about at this stage.
In general, the Department of Commerce’s recent and final rules on the CHIPS Act guardrails establish criteria to prevent beneficiaries of CHIPS funding from expanding semiconductor manufacturing in foreign countries of concern, including China, Russia, Iran, and North Korea. This includes barring expansion of manufacturing capacity by more than 10%. The definition of legacy semiconductors is narrowed to exempt fewer semiconductors and facilities from the foreign expansion prohibitions. Commerce will periodically re-evaluate and update the semiconductors designated as critical to national security and legacy semiconductors. And so we carry on with a policy that is still being criticized by the very companies that stand to gain the most from it.
