The tl;dr version: Taiwanese display manufacturers are not going to be able to go toe-to-toe with Chinese competitors, so they’re looking to emulate the South Koreans and move into higher-end markets. In this case, it is MicroLEDs and the promise of enticing Apple as a future customer. AUO’s maneuvers are expected to drag along the rest of the island’s display industry and strengthen the country’s position in MicroLED manufacturing as a strategic imperative.
The Taiwanese display industry is experiencing changes in high-level personnel that could impact the trajectory of a number of companies locally. According to Caixin, this year will be crucial for AUO Chairman Shuang Lang (Paul) Peng. Ennostar’s chairman is on the way out meanwhile, Peng announced that he would step down as CEO of AUO and become the chief strategy officer of the group. Since Peng is also the vice chairman of Ennostar, he is said to be hoping to have a bigger role in the integration of the company into the group.
Now, in the face of growing competition from Chinese rivals, Ennostar is looking to abandon LEDs all together, and move into the high-end MicroLED market. The Taiwanese feel that there is a MicroLED era coming – everything from smart watches to automotive displays – with South Korean companies, chiefly Samsung, beginning to commercialize the technology and separating themselves from the threats of Chinese manufacturers. This is seen as creating opportunities for AUO and Ennostar also to jump ahead of the Chinese and avoid being eaten alive in direct competition by moving into higher-end manufacturing. AUO holds 8% of shares in Ennostar, which owns Lextar, a subsidiary responsible for packaging, and has invested in Nitron, a company with key MicroLED technology. AUO and Ennostar are eyeing opportunities to win Apple’s business but much may depend on how AUO and Ennostar can integrate, or possibly merge, to position themselves as having the capacity to succeed.
Only last week, Foxconn and Ennostar announced the joint development of a new 0.12-inch micro-display featuring MicroLED technology. The display boasts a pixel density of over 6,500 ppi and blue light brightness of 200,000 nits. This product has potential applications in smart glasses, virtual, and augmented reality. Epistar, an Ennostar subsidiary, has invested $20.1 million in a Zhunan Science Park plant for MicroLED development that is expected to be ready within 2-3 years.
