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In the afterglow of the setting sun, Xiamen Sea World, adjacent to the Xiamen Cruise Home Port, looks like a commercial "giant ship".

"Micro-LED is the first time that China has truly taken the lead in the world in the field of display." Zeng Yu, CEO of Xiamen Sitan Semiconductor, told the Pengpai News reporter that in the field of optoelectronic display industry, China used to rely more on reference, but now, it has unknowingly reached the top of the global industry, and has transformed from a follower to a leader.

In 2022, the main R&D and design links of Sitan Technology will be located in Huli District, Xiamen. As the birthplace of Xiamen Special Economic Zone, Huli District has a cluster of optoelectronic industries, especially the new display industry with Micro-LED as the future direction. Xiamen is the birthplace and industrial center of LED in China, and it is also the only pilot city for optoelectronic display industry cluster in the country. There are representative enterprises in epitaxial growth, chip manufacturing, and Micro-LED display panels.

As a new generation of display technology, Micro-LED uses micron-scale LED as the light-emitting pixel unit, with the characteristics of small chip size, high integration and self-luminescence. Compared with traditional display technologies such as LCD and OLED, it has obvious advantages in brightness, resolution, contrast, energy consumption, service life, response speed and thermal stability, and is even considered to be the ultimate solution for future display. As one of the earliest teams in the world to carry out Micro-LED technology research, Liu Zhaojun, the founder of Sitan Technology, is one of the earliest researchers in the world engaged in gallium nitride Micro-LED technology.

Sitan Technology's 0.13-inch Micro-LED micro display chip. Photo provided by the interviewee

The difficulty in commercializing Micro-LED lies in the high difficulty of mass production, and the yield determines the cost. In 2019, Sitan Technology built the first pilot line in China and achieved mass production at the end of June this year. It is one of the few companies in the world that can mass produce Micro-LED.

Before the establishment of the special economic zone, Huli, located in the northwest of Xiamen, Fujian, was just a fishing village with about 2,300 people. In October 1980, the State Council approved the establishment of the Xiamen Special Economic Zone on a 2.5 square kilometer piece of land in Huli Agricultural Brigade, Xiamen City. Huli has thus become the birthplace of the Xiamen Special Economic Zone. In May 1984, the State Council decided to expand the scope of the Xiamen Special Economic Zone to the entire island (including Gulangyu). Over the past 40 years, Huli has transformed from a small fishing village to a modern urban area, becoming a true portrayal of the rapid development of the Xiamen Special Economic Zone and a vivid epitome of China's reform and opening up.

In 2023, the output value of the electronic information industry in Huli District will be close to 130 billion yuan, of which the output value of flat panel displays will be about 73 billion yuan. As an important carrier of Xiamen's optoelectronic display industry, the degree of industrial agglomeration is gradually increasing. It has enterprises in the optoelectronic display field represented by Lingyang Huaxin, Xinying Display, Sitan Technology, and TPK, involving key links in the industrial chain such as driver chip design, Micro-LED semiconductor display technology research and development, touch screen and module manufacturing.

From LED lighting

Xiamen's optoelectronics industry has a long history. It can be traced back to the Xiamen Light Bulb Factory founded in 1958, which was also the predecessor of Xiamen Topstar Co., Ltd. On July 1, 1958, Topstar produced its first incandescent light bulb, which also allowed Fujian Province to have its own light bulb production company. Since then, companies such as Hualian Electronics and Sanan Optoelectronics have gradually grown in Xiamen.

The optoelectronics industry has a strong foundation in Xiamen, which allowed the founder of Lidaxin to get in touch with this industry in the process of international trade in the 1990s. In 2000, Lidaxin Import and Export Company was established. Just one year later, Lidaxin's first energy-saving lamp factory came into being.

In 2003, Xiamen proactively cultivated three emerging industries: optoelectronics, software, biology and new medicine. In July 2003, the semiconductor lighting research team of the Ministry of Science and Technology came to Xiamen, which marked the beginning of the development of Xiamen's LED industry.

This year, Xiamen began to pay a lot of attention and support to the LED industry. In June 2003, the "National Semiconductor Lighting Project" was launched. Three months later, Xiamen established the Xiamen Semiconductor Lighting Industrialization Base Coordination Group, led by the deputy mayor in charge of the municipal government. At that time, Xiamen was recognized as the city with the "earliest response, fastest reaction, and most solid organization" in the national LED industry. The city formed a craze and atmosphere of "everyone knows about optoelectronics and everyone talks about LEDs." Xiamen attaches importance to and strongly supports the development of LED, which has become a consensus in the industry at home and abroad. Overseas companies and Taiwanese companies have come to Xiamen for inspection and cooperation.

In 1993, Nobel Prize winner Shuji Nakamura and three other Japanese scientists invented blue LED, making it possible to use LED as general lighting. The complete set of gallium nitride LED processing technology developed by Shuji Nakamura and others at Nichia not only obtained blue LED based on wide bandgap materials that were previously difficult to obtain with other materials, but also opened the door to a series of direct bandgap semiconductor high-brightness LEDs. LED lighting has the advantages of energy saving, long life, strong color reproduction, and no flicker. As the technology gradually matures, Xiamen's lighting companies are gradually moving towards LED lighting.

Achieving technological breakthroughs and reducing costs have made LED semiconductors truly usable as general lighting. By hitting these technological breakthroughs, a group of optoelectronic companies in Xiamen Huli District, including Lidaxin, have developed rapidly. However, achieving mass production is not easy. In 2008, Lidaxin entered the semiconductor lighting industry and achieved mass production in 2012.

Lidaxin is determined to design a lamp that warms people's hearts. Photo provided by the interviewee

Since August 2011, with the approval of the Ministry of Commerce, the Xiamen National Energy-saving Lamps Foreign Trade Transformation and Upgrading Demonstration Base was established with the energy-saving lamps industry in Huli District, Xiamen, covering the entire city. The base was later upgraded to the Xiamen National Foreign Trade Transformation and Upgrading Base (Energy-saving Lamps). Xiamen was an early energy-saving lamp production base in China's lighting industry. After the emergence of LED, Xiamen became one of the regions with the fastest LED transformation.

Data shows that from 2009 to 2016, the total number of optoelectronic enterprises in Xiamen increased from more than 150 to more than 300, and the total industrial output value increased from 40.6 billion yuan to 120 billion yuan, an increase of nearly 3 times; among them, the direct output value of LED lighting reached 32.3 billion, a year-on-year increase of 20%. Xiamen's LED epitaxial chip output and LED lighting exports have ranked first in China for many years. The total output of LED epitaxial chips accounts for more than 60% of the domestic total; Xiamen occupies five seats in the top ten LED lighting export companies in the country. It is one of the world's largest high-end LED bulb manufacturing and export bases. For every 100 LED bulbs in the world, 30 are manufactured and exported by Xiamen.

Compared with previous lighting equipment, the threshold for semiconductor production equipment is higher. From front-end chips to packaging and applications, the industry chain is also more complex. How to produce efficient and reliable products involves multiple disciplines such as optics, electronics, structure, and engineering. Although it took a lot of effort to explore and run-in, Lidaxin finally mastered the core technology. Xu Jianxing, deputy general manager of Lidaxin Digital Education, told the reporter of The Paper that the company quickly became the "leader" in the LED lighting industry from an unknown small foundry of energy-saving lamps. This is related to the fact that the core technology is in its own hands and the judgment of environmental trends is more acute.

Light and color test of large-size products of Lidaxin. Photo provided by the interviewee

Among LED lighting companies, Lidaxin was one of the first companies to transform and deeply deploy in the direction of the Internet of Things. Around 2015, Lidaxin continued to invest in research in the field of the Internet of Things, independently developed software in conjunction with production processes, and upgraded from a pure hardware manufacturer to a company with both hardware and software capabilities. Today, the product structure has expanded from lighting to security, control, home appliances and other fields. In terms of application scenarios, since 2014, it has expanded from home lighting to campus eye protection lighting, and has taken the lead in the field of campus eye protection lighting.

Make a good screen

As LED lighting enters thousands of households, the market size continues to expand, giving rise to new applications, extending the display industry, and continuously extending to the high end of the value chain.

Huang Kai, vice dean of the School of Physical Science and Technology at Xiamen University, told The Paper that from the end of the last century to the beginning of 2000, before localization, the price of an LED was $6, but now it costs less than a cent. "The Chinese are particularly good at making something very cheap." The characteristic of the semiconductor industry is that while costs are reduced, performance is generally steadily improved.

The opening of the general lighting market has driven the growth of the entire LED industry chain. When LED full-color displays first appeared, the screen resolution was low due to the large spacing between packaged lamp beads, which was only suitable for large-screen displays and only suitable for viewing from a distance. Therefore, it first began to penetrate into outdoor large-screen displays. As LED costs decrease and packaging technology continues to mature, the size of packaged devices has gradually decreased, and the spacing between pixels has gradually decreased. LED small-pitch displays have moved from outdoor to indoor.

The size of LED chips is getting smaller and smaller, and the pixel density is getting higher and higher. In addition to the optoelectronic lighting industry, the optoelectronic display industry chain in Huli District, Xiamen is also constantly extending. Since 2000, companies such as TPK Technology, AU Optronics, and AOC Display Technology have successively settled in Xiamen, gradually establishing an optoelectronic display industry cluster in Xiamen. Among them, TPK Technology, a leading manufacturer of touch technology, settled in Xiamen Huli Information Optoelectronics Park in 2004, and officially mass-produced multi-point projected capacitive touch screens in 2007, and applied them to the first generation of smartphones of internationally renowned brands. Since then, the touch revolution of human-computer interaction in the consumer electronics industry has begun, and capacitive touch technology has gradually extended from mobile phones to more fields.

As a pioneer in capacitive touch technology, TPK has established R&D centers in Taiwan and Xiamen to fully leverage the advantages of industry talents on both sides of the Taiwan Strait. TPK's vertically integrated production process has built a 1-110-inch touch display module production line. Its core technologies include touch sensor technology, material design and development capabilities, high-precision full bonding technology, glass surface treatment technology, display open cell process and downstream system integration capabilities.

"We invest a lot of money every year in the research and development of touch technology. We have more than 4,000 patents worldwide, covering touch panels, sensing electrodes, control circuits, protective covers, sensing electrode materials and their manufacturing methods, equipment and machines, etc. These patents not only enable us to lead the industry, but also protect the rights and interests of our customers and partners. As a result, we have been awarded the honor of a national intellectual property demonstration unit." Dai Haichang, senior manager of the TPK Board Office, told The Paper.

In order to meet the strict requirements on product quality, TPK invested more than 100 million yuan to establish an advanced quality assurance laboratory, which was rated as "Xiamen Touch Screen Key Laboratory", including physical analysis laboratories, material laboratories, electrical laboratories, optical laboratories, environmental simulation laboratories, etc.

TPK Technology production workshop. Photo provided by the interviewee

"We obtained national laboratory accreditation in 2009 to ensure that we can provide reliable, high-quality touch products to customers and end users. In recent years, TPK has also actively shared the laboratory's testing and analysis capabilities with the industry to promote the high-quality development of the optoelectronic industry in Xiamen and even South China," said Dai Haichang.

With more than 20 years of manufacturing experience, TPK is also accelerating its transformation, providing product development verification, manufacturing and mass production solutions for customers in the fields of e-paper, additive manufacturing, automotive electronics, etc. In the field of e-paper, TPK cooperates with the industry's leading cholesterol color liquid crystal e-paper technology manufacturer, and its product applications include e-book readers, electronic tags, commercial displays, electronic billboards, etc. In the field of automotive electronics, it launched an in-vehicle display assembly system; cooperated with the world's leading LiDAR technology company and became its exclusive mass production supplier for the next generation of in-vehicle LiDAR sensors.

"The mass production manufacturing, product engineering design and automation capabilities that TPK has accumulated in touch screens can be expanded to more diverse fields. In the future, TPK will not only be a professional touch screen technology manufacturer, but also an advanced manufacturing partner," said Dai Haichang.

Towards Micro-LED

Recently, Sitan Technology's 0.13-inch micro display chip made its first public appearance at the CES 2024 exhibition. It is the Micro-LED micro display with the highest PPI currently released in the world and won the 2024 International Consumer Electronics Show (CES) Innovation Award.

The industry usually refers to displays smaller than one inch as micro displays. Currently, Sitan Technology is the first in the world to achieve the research and development, pilot test and mass production of micro displays. Because the market is in short supply, the production line operates 24 hours a day.

In 2022, the display panel production capacity of mainland my country will account for about 60% of the global production capacity, and the production capacity scale will rank first in the world. In terms of scale, my country has an advantage in the LCD market. In the field of OLED (AMOLED), the gap between China and South Korea is gradually narrowing. Mini-LED has the initial industrialization capability in my country, and the industrialization of Micro-LED is the next breakthrough direction.

As the core of the next generation of display technology, Mini/Micro-LED has opened a new chapter in the development of the LED industry, with industry giants such as Huawei, Apple, Samsung, BOE, and TCL competing to make their presence felt. Optoelectronic semiconductor companies in Xiamen, such as Shenzhen Tianma, Sanan Optoelectronics, and Qianzhao Optoelectronics, have also accelerated their transformation and upgrading to the new display industry and developed in the direction of Mini/Micro-LED.

In the era of LCD and OLED, many technologies were based on the industrial technologies of Japan and Taiwan. Micro-LED has become an opportunity to lead the field. The three founders of Sitan Technology all graduated from the Hong Kong University of Science and Technology, one of the world's "three major birthplaces of Micro-LED", and then engaged in display-related research at the Southern University of Science and Technology.

"As an international port city and the earliest special economic zone, Xiamen attaches great importance to the construction and development of high-tech and hard-tech. Entrepreneurs here have a broad vision and are committed to building a new industrial chain with high barriers," said Zeng Yu.

After Sitan landed in Xiamen, it placed the design and development team of driver chips and process routes in Huli District, and mass production in Tongan District. "Xiamen has industrial chain advantages and layout determination in new display and semiconductors, which is in line with Sitan's development vision." Zeng Yu said.

The mass production base of Stan Technology located in Tong'an, Xiamen, has an annual production capacity of nearly 10 million sets of Micro-LED display chips.

Since Apple acquired Luxvue, a Micro-LED technology company, in 2014, the pace of global innovative companies in deploying Micro-LED has continued to accelerate. Sitan Technology has been focusing on this technology since 2006 and has been deeply involved in it for nearly 20 years. Years of technological accumulation have given its Micro-LED technology a first-mover advantage in this field worldwide. "Leaders must bear the uncertainty of the future and the current situation where there are no cases to learn from."

Sitan cooperates with equipment manufacturers to develop lithography machines in the field of optoelectronic semiconductors, and produces optoelectronic chips and driver chips by itself. "We use semiconductor technology to make displays, and the core is definitely our core process technologies such as high-precision bonding integration and single-chip full-color." Unlike integrated circuit lithography machines that require continuous improvement in precision, the difficulty of Micro-LED lithography machines lies in improving the photoelectric conversion efficiency and durability during the production process. Because from the perspective of components, optoelectronic chips do not need to be so small, but they also have unique needs. Optoelectronic chips are heterogeneous gallium nitride, and integrated circuits are homogeneous gallium nitride. The epitaxial growth is also different, and quantum wells are required for energy conversion to emit light rather than store computing power.

To ensure the yield of mass production, it is necessary to ensure the yield of optoelectronic chips and driver chips, and the bonding process between the two is also a key factor in the yield. At present, Sitan Technology has applied for nearly 800 intellectual property rights in the field of Micro-LED related technologies. It also reserves patents for the mass transfer technology required for large-size screens.

The formation of new productivity requires focus and accumulation. "Dr. Liu Zhaojun, as the founder and chairman of Sitan Technology, is still our technical director and has been working on the front line of technology research and development." Sitan's core team of scientists are also doctoral supervisors in universities. Through the connection between schools and enterprises, they provide enterprises with "seamless" talents who can directly industrialize scientific and technological achievements, and have established their own talent training mechanism.

Planning for the future

The optoelectronic display industry chain is relatively complex. It is difficult for one region to fully cover all links in the chain, and there is often a lack of matching between upstream and downstream enterprises in the industry chain. It relies more on collaboration between regions or even countries.

From the upstream perspective, structural materials include substrates, liquid crystal materials, organic light-emitting materials, polarizers, cover plates, etc. Coating equipment includes vapor deposition machines, PVD, CVD, etc. Mini/Micro-LED requires mass transfer equipment and crystal bonding machines, etc. Production consumables include target materials, etching solutions, PI orientation solutions, special gases, mask plates, etc. Graphical equipment requires photolithography machines, dry etching machines, wet process equipment, etc. In addition, driver ICs, display chips, cell spacers, etc. are also very critical.

At present, the Micro-LED market still needs to be nurtured. The industry believes that it may take five to ten years for many cutting-edge technologies in the display industry to go from explosive growth to mass popularization.

As a leading company in the upstream driver chip design segment of the industry, Lingyang Huaxin was established in 2017 and located in Huli District, Xiamen City. It inherited the R&D capabilities and experience of Taiwan Lingyang, and its products focus on driver chips for Mini/Micro-LED display and high-density dot matrix lighting applications.

Micro-LED has almost become a must-win for all optoelectronic display companies in their future layout. Xiamen Xinying Display Technology Co., Ltd., founded in December 2020, is a company born in this industry context that focuses on the research and development of Micro-LED display technology. It was jointly established by TCL Huaxing Optoelectronics and Quanzhou Sanan.

Unlike Sitan Technology, which focuses on small and medium-sized displays, Xinying Display focuses more on the mass transfer, bonding, detection and repair technologies required for Micro-LED based on TFT drive backplane. The total investment of the project is 300 million yuan, dedicated to the research and development of new semiconductor display technology and the industrialization of Micro-LED display projects.

"It is mainly to solve the intermediate link from chip to display." Xie Xiangwei, deputy general manager of Xinying Display, told the reporter from The Paper that although the two shareholder companies have their own advantages in panels and chips, the mass transfer of Micro-LED is a new technology that neither shareholder company has. The technology needs to be optimized, the yield needs to be improved, and the cost needs to be reduced. It is not as easy as imagined.

Micro-LED chips are small in size and high in precision. All processes, including chip incoming materials and bonding, need to be inspected and repaired. Key parameters such as uniformity and consistency of optoelectronic parameters such as chip brightness and wavelength, as well as whether there are appearance defects, need to be inspected and judged, and the corresponding technical means to be taken for subsequent repairs are determined. Inspection and repair is another key technology to be conquered in Micro-LED display.

There is a huge difference between using LED for lighting and using LED for display. Since Micro-LED chips are extremely small, they cannot be transferred using traditional process technologies. In the past, there were many transfer technologies, but in the past two years, they have basically converged to using stamp transfer and laser transfer. There is also a big difference between the engineering process and the development of key node technologies in the laboratory.

"We need to aim for mass production, which is a very clear goal. Research and development or pilot testing is relatively easy to achieve, but the issue of mass production engineering still needs some time to verify." Xie Xiangwei said that cost reduction is very important, and each link must be carefully calculated. Material costs, manufacturing costs, professional management and other aspects must be optimized. Efficiency and scale are also the key to the success of engineering.

At present, Xinying Display's pilot verification line has been basically completed, and it is planned to start pilot production at the end of this year, and it is expected to expand production and achieve mass production in the next two years.

"Every step is not easy, but it represents the future and is worth a try," said Xie Xiangwei.