Electronics

Under-screen camera technology will not make China's OLED industry profitable at once, but it is a springboard for China's OLED industry to become profitable.

The under-screen camera has become a fashion trend for smartphones in 2021. Entering August, brands such as Samsung, Xiaomi, OPPO, and ZTE have released new products or technologies in turn, and the popularity of under-screen camera phones is rising like summer temperatures.

Behind this, the OLED panels for under-screen camera phones of ZTE, Xiaomi and OPPO come from Visionox, TCL China Star, and BOE respectively. In the first half of this year, global OLED smartphone screen shipments increased by 50% year-on-year, and China's expanding OLED panel industry ushered in great opportunities. However, China's OLED panel industry is not yet profitable. Can under-screen camera products become a breakthrough point for profitability?

The screen iteration of smartphones has always been an important selling point. In order to reserve a place for the front camera and take into account the beautiful appearance, OLED mobile phone screens have evolved from notch screens and water drop screens to perforated screens. Since the full screen is the ultimate pursuit, the under-screen camera technology has high hopes.

The general principle of the under-screen camera technology is that the front camera is covered with a transparent OLED screen. This small transparent screen usually displays mobile phone information; when the user needs to shoot, the transparent screen becomes transparent, and the under-screen camera enables the shooting function .

Its biggest problem is that the screen needs to take into account the clarity of the display and the transmittance of the camera. For example, the current transmittance of the under-screen camera OLED panel of ZTE mobile phones is about 20%. Its partner Visionox has made it clear that the next transmittance target is 30%. In the future, it is still necessary to continue to improve the display effect of the under-screen camera area.

As technology improves, the penetration rate of under-screen camera technology will continue to rise. Sigmaintell expects global shipments of under-screen camera phones to be approximately 2.6 million units in 2021 and will exceed 3.5 million units in 2022. CINNO Research predicts that by 2025, the penetration rate of under-screen cameras in the Chinese smartphone market is expected to increase to 5%, and there will be room for 30 to 40 million units.

Higher costs increase the resistance to promotion. This year, ZTE and Visionox launched an upgraded product for the under-screen camera phone. Due to the use of special components and circuit design, plus research and development costs, the cost of the under-screen camera panel is 50% higher than that of ordinary products.

Even so, the tide of full screens is still swept, Xiaomi Mix4 pre-priced at 4,999 yuan, ZTE Axon 30 priced at 2,198 yuan. In the future, the under-screen will become a basic technology. In addition to the under-screen camera, it can also put under-screen components such as face recognition and under-screen ambient light sensing. The integration of mobile phones is higher. With the increase in transmittance and rich functions, it will further reduce costs and increase efficiency.

As one of the pioneers of under-screen camera technology in China, Visionox released its semi-annual report last week and revealed that its revenue in the first half of the year increased by more than 20% to 1.4 billion yuan, and the net profit attributable to its parent was 740 million yuan. Compared with BOE, TCL China Star, and Shenzhen Tianma, Visionox has no LCD panel business, only OLED panel business, which reflects that the domestic OLED panel business is still under pressure on profitability.

According to data from Qunzhi Consulting, in the first half of 2021, global OLED smartphone panel shipments were approximately 290 million pieces, an increase of approximately 52% year-on-year. Among them, Visionox ranked fourth in the world and second in China. According to a report by CINNO Research, Visionox's OLED smartphone panel shipments in the second quarter of 2021 ranked third in the world and second in China.

Visionox stated in the semi-annual report that the revenue of OLED products in the first half of the year increased by more than 80% year-on-year, and the gross profit rate of OLED products increased by 19.11 percentage points, achieving mass production and delivery of a new generation of under-screen camera technology solutions and 165Hz refresh rate AMOLED product solutions. In addition, Visionox also announced on August 23 that its Hefei Gen 6 flexible OLED production line was put into production.

Why is it still losing money? Visionox's OLED display business gross profit margin was only 2.06% in the first half of the year. At present, China has become the world's largest purchase market for smart phone OLED panels, but the degree of localization of upstream materials and equipment in the OLED panel industry chain still needs to be improved, and panel companies are required to upgrade technology and reduce costs through large-scale investment.

The share of China's OLED panel industry in the global market is constantly increasing, and upstream materials and equipment are also gradually making breakthroughs. According to data from CINNO Research, in the second quarter of 2021, Samsung’s global share of AMOLED mobile phone panels fell below 70% to 69.5% for the first time, and LGD’s shipments also declined from the first quarter. BOE and Visionox’s AMOLED mobile phone panels produced Cargo volume increased 36% and 44% from the first quarter to 14.28 million and 9.8 million, respectively. According to Aolaide's semi-annual report, it has provided organic light-emitting materials and evaporation source equipment to Visionox, TCL Huaxing, BOE, Tianma, etc.

Nowadays, the under-screen camera products are still in the early stage of growth, and the technical process is relatively difficult. Although major manufacturers have plans for under-screen camera products, whether they can win the favor of consumers is still full of uncertainty. On the one hand, the application scenarios of under-screen camera technology should be further enriched, such as extending to other fields such as tablet computers; on the other hand, it is also necessary to challenge the ultimate front camera image and display compatibility experience.

Of course, lack also means that there is space. According to Junhui, Visionox’s under-screen technology chief engineer building, under-screen camera technology will bring many new opportunities to China’s OLED industry chain, including increased demand for new materials such as transparent glue, increased requirements for display driver chips, and New cameras matching transparent screens and algorithm companies for cameras under the screen will also emerge one after another.

Under-screen camera technology will not make China's OLED industry profitable at once, but it is a springboard for China's OLED industry to become profitable.