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Aolaide/Photo provided by Chen Jinxing/Drawing

Securities Times reporter Wu Zhi

Display screens are almost everywhere, from mobile phones, computers, TVs to cars. People perceive the gorgeous changes in light and obtain information through small screens. In recent years, OLED (organic light-emitting diode) screens with better display effects, light weight, and foldability have gradually been popularized in various electronic products, bringing consumers a better user experience.

In fact, just a few years ago, OLED screens were exclusive to high-end electronic products, and most manufacturers only used them on flagship models. The reason behind the rise of OLED screens from high-end to popular is the rapid upgrade and iteration of OLED technology and products, and the joint efforts of the upstream and downstream of the panel display industry chain. Aolide (688378), a company on the Science and Technology Innovation Board from Jilin, is a key player in this field.

At present, the mainstream production technology route of OLED panels is vacuum evaporation. This method is to heat and evaporate the organic light-emitting material through the evaporation source in the vacuum environment of the evaporation machine, so that it can be smoothly evaporated onto the OLED substrate. The evaporation source is the core component of the evaporation machine, and its performance determines the thickness and uniformity of the coating during the evaporation process.

The OLED equipment industry has very high technical barriers. In October 2017, the linear evaporation source equipment developed by Aolite for the 6th generation AMOLED (flexible) panel production line was successfully mass-produced, and quickly occupied the market with excellent performance, breaking the foreign monopoly. To date, Aolite is still the only domestic manufacturer of evaporation sources, helping my country's OLED panel industry to achieve the localization of key components and solving the "bottleneck" technical problems of the domestic 6th generation AMOLED production line.

Recently, the Securities Times interview team of "A Real Exploration of Northeast High-end Equipment Manufacturing Industry Samples" visited Alight's production base in Jinshan District, Shanghai, to experience the "hard power" of this "hard technology" company on the spot.

OLED panels made by steaming

OLED is the third generation display technology. Compared with traditional liquid crystal display technology, OLED has the advantages of light and thin devices, high contrast, and low power consumption. In particular, OLED has the advantage of realizing flexible display. It is one of the current mainstream display technologies with the fastest market development and the best application prospects.

Unlike LCD screens that rely on backlight to emit light, OLED display is an active light-emitting display technology. The secret of its active light emission is a thin layer of organic light-emitting material attached to the substrate. When current passes through, these materials can emit light and realize display functions.

At present, the mainstream OLED panel production adopts vacuum evaporation method, that is, in the vacuum evaporation machine, the organic light-emitting material is vaporized and evaporated by heating the evaporation source and deposited on the substrate.

The vacuum evaporation machine consists of a vacuum pumping system and a vacuum chamber, and the evaporation source is placed inside the vacuum chamber. In the workshop of Oride, the Securities Times reporters saw the "real body" of the vacuum chamber. A single vacuum chamber is several meters high and looks like a "metal house". It is understood that a 6th generation AMOLED panel production line usually consists of multiple vacuum chambers, which is very large in scale.

In contrast to the bulky vacuum chamber, the evaporation source used to heat the organic light-emitting material is much smaller. In the workshop, the reporters saw the evaporation source equipment developed by Oride, which is a rectangular groove structure less than 2 meters long. The groove is surrounded by heating wires for heating the light-emitting material, and the top is a row of irregularly arranged nozzles. When the evaporation source moves back and forth in the evaporation machine, the organic material is evenly evaporated onto the substrate above.

The evaporation source is not heavy. In the words of Xuan Jingquan, chairman of Aolite, two adults can "carry it". However, this small device is not only the core component of the evaporation machine, but also has been monopolized by foreign manufacturers for a long time, becoming a "neck" in my country's OLED panel industry.

Xuan Jingquan told the Securities Times reporter that in the early years, some foreign manufacturers that mastered core technologies imposed a technology blockade on domestic panel companies, making it difficult for domestic panel companies to buy high-quality evaporation machines and evaporation sources, which directly led to the difficulty in improving the panel production yield. In 2012, after learning about the dilemma of the domestic panel industry, Xuan Jingquan led his team to start the research and development of evaporation equipment. He first set his sights on the core component evaporation source.

The only domestic manufacturer of evaporation sources

Founded in 2005, Aolite has been committed to the research and development of OLED luminescent materials. The company is one of the few companies in China that can independently produce organic luminescent materials. It is also the deep accumulation in organic luminescent materials that has helped Aolite achieve a breakthrough in the research and development of evaporation sources.

Xuan Jingquan told the Securities Times reporter that the indicators for evaluating the performance of the evaporation source include uniformity of evaporation, coating thickness, continuous evaporation time, material utilization rate, etc. The mainstream AMOLED panel requires more than ten layers of organic materials to be evaporated. The materials used in the evaporation source, temperature settings, nozzle angles, etc., will affect the evaporation effect, and thus affect the panel's luminous efficiency, display color, and yield rate.

"Only companies that have a thorough research on the performance of organic light-emitting materials can truly make a good evaporation source." Xuan Jingquan said that compared with pure equipment manufacturers, Alight has unique advantages in the research and development of evaporation sources.

In 2012, Aolite gathered the company's core personnel in materials, equipment, machinery, and marketing to form a research and development team and started the evaporation source development project. After years of hard work, the 6th generation evaporation source was designed and officially put into production in October 2017.

The breakthrough of Alight has broken the foreign technical barriers and solved the "bottleneck" technical problems of the domestic 6th generation AMOLED production line. In 2018, Alight's evaporation source equipment achieved revenue of 156 million yuan. In recent years, among the 6th generation AMOLED linear evaporation sources purchased by domestic panel manufacturers through bidding, Alight is the only domestic supplier, and its market share has long ranked first.

It has been seven years since Alight's evaporation source was put into mass production and launched on the market. Xuan Jingquan introduced that many performance indicators of the company's equipment are still leading. "For the thickness and uniformity of evaporation, we can achieve nanometer-level precision; for the continuous evaporation time, we can achieve 260 hours of stable evaporation, and there is no need to shut down for more than ten days." For panel manufacturers, this means higher production yield and efficiency.

Chewing the toughest bone

Display technology is developing rapidly. From the plasma display that was popular in the early days, to the LCD display that was regarded as "synonymous with high-end" ten years ago, to the OLED that is rapidly penetrating today, display technology has made great progress in the past few decades. Technological iteration means a better experience for ordinary consumers, but it also puts pressure on the upstream and downstream of the industry chain that "if you fall behind, you will be eliminated."

Xuan Jingquan told the Securities Times reporter that Aolite has been firmly implementing the business strategy of "digging deep holes and storing up food" for many years. "After breaking the monopoly, the company's materials and equipment modules must be able to withstand technical iterations, which requires us to continue to dig deep in advantageous projects and form our own advantages."

Both of Aolite's main businesses have high technical barriers. Among them, the technical barriers of organic light-emitting materials calculated by "Lun Ke" are high patent barriers, high R&D difficulty, high purity requirements for terminal materials, and complex production processes; while the technical barriers of evaporation sources are high technical barriers, large R&D investment, and high manufacturing precision requirements.

In order to maintain its technological leadership, Oride has maintained a high intensity of R&D investment in recent years. In 2023, the company's R&D investment reached 122 million yuan, accounting for 23.64% of its operating income. This investment ratio exceeds the industry average and is not inferior to the Science and Technology Innovation Board, which is known as a "R&D highland".

Past financial reports show that Oride has more than 20 research projects underway each year. In 2023, the company has as many as 26 R&D projects around OLED display. By the end of 2023, Oride has applied for 799 invention patents and obtained 325 invention patents.

Xuan Jingquan told the Securities Times reporter that the company's current research and development can be summarized into two major directions: materials and equipment. In terms of materials, the company insists on "iteration" plus "increment" and solving production line pain points as development goals. With the acceleration of the process of domestic substitution, the company has proactively laid out the next generation of materials on the basis of iterative updates of existing materials.

In terms of equipment, the company focuses on the technical development of high-generation evaporation sources, and in combination with industry development trends, has deployed silicon-based OLED evaporation machines and perovskite evaporation machines. Based on the technical advantages of evaporation source products, Oride has previously used this as a technical foundation to further develop small evaporation machines and perovskite equipment. It is reported that the company has completed the delivery of two small evaporation machines, and the overall design of the perovskite equipment has been completed, and the prototype production is being promoted.

"Since its establishment, Oride has relied on hard technology. Private technology companies are supposed to do 'difficult but correct things'." Xuan Jingquan admitted that real technology research and development is not only difficult, but also has a high risk of failure. However, in the next few years, the company's R&D investment will not decrease. After the current technology under development achieves a breakthrough, it is expected to carry out more new project research to maintain its technological advantage.

Embracing a broader market

In 2017, Apple used OLED displays for the first time on its first full-screen mobile phone, the iPhone X. Currently, all of Apple's flagship phones use OLED screens. In addition, Apple also equipped its iPad Pro tablet with an OLED display for the first time this year.

Apple's use of OLED screens is a microcosm of OLED's development and application. In recent years, with the maturity of technology and the reduction of costs, the application scenarios and market boundaries of OLED have continued to expand. Starting from small-sized mobile phone screens, OLED is gradually expanding to larger-sized tablet computers, notebook screens and other application areas.

According to data from market research firm CINNO Research, the global market shipments of AMOLED smartphone panels will be approximately 690 million units in 2023, a year-on-year increase of 16.1%. The penetration rate of OLED in smartphones has climbed from less than 30% in 2018 to 48% in 2023, and is expected to increase to 55% in 2024.

As market demand increases, leading panel manufacturers have accelerated their investment in higher-generation OLED production lines with larger sizes and higher production efficiency. According to public reports, BOE's 63 billion yuan investment in China's first 8.6-generation AMOLED production line project is already underway. Other manufacturers are also gearing up.

The higher generation production lines correspond to larger substrates, which also means higher processing difficulty. "As the substrate size becomes larger, the working mechanism remains the same, but the processing difficulty becomes greater and greater. For example, how to achieve uniformity of evaporation over a larger area, we have done a lot of optimization and research, and have made great breakthroughs in technology, and the technical barriers are also higher," said Xuan Jingquan.

It is understood that at present, Aolite has completed the production of 8.6-generation AMOLED linear evaporation source prototypes, and is currently conducting performance and parameter testing and market development to prepare for the upcoming climax of the 8th generation line construction. According to the company's preliminary estimates, the market size of the 8th generation line evaporation source is expected to reach 2 billion to 3 billion yuan. In the context of the current 6th generation line investment entering the final stage, the 8th generation line is expected to provide Aolite with new business growth.

In addition to equipment, organic light-emitting materials will also benefit from the growth of OLED market demand. According to the financial report of Oride, the company's organic light-emitting materials business has increased significantly in the past two years. In 2023, the company's organic light-emitting materials achieved revenue of 318 million yuan, a year-on-year increase of nearly 50%, and sales volume increased by 43.9% year-on-year.

"The company's increase in the volume of luminescent materials in recent years is due to our technological breakthroughs. In addition, the overall localization rate of downstream manufacturers is increasing, and the use of domestic materials can also reduce production costs." Xuan Jingquan told the Securities Times reporter.

It is understood that in addition to the luminescent materials, the "OLED thin film encapsulation materials" independently developed by Alight have been supplied in batches to downstream flat panel manufacturers, realizing the domestic substitution of this product; the company's independently developed and produced PSPI materials (photoresist for OLED display process) have also passed the mass production tests of downstream manufacturers and are supplied in batches.

In recent years, the development of my country's panel industry is obvious to all. However, Xuan Jingquan admitted that there is still a lot of room for domestic substitution in the upstream materials and equipment fields of my country's panel display industry. "Orient will continue to tackle the core key technologies in the fields of materials and equipment, follow the path of specialization, excellence and innovation, continue to enhance technical reserves, and contribute to the development of new quality productivity." Xuan Jingquan said.