The market in general had high hopes for Mini LED notebook computers in 2021. Although most brands were relatively unenthusiastic towards the adoption of Mini LED displays, the release of Mini LED products by Apple will likely generate a copycat effect and inject fresh momentum into both demand and shipment for the Mini LED notebook market. Apple did, in fact, release two brand new MacBook Pros with 14.2-inch and 16.2-inch displays, both of which are equipped with Mini LED backlights as expected. However, these Mini LED notebook displays did not receive as much marketing and publicity as the Mini LED displays used for the iPad Pro models, which had been released about six months prior.
During the unveiling of the 12.9-inch iPad Pro in 2Q21, Apple made special mention of improvements brought about by the Liquid Retina XDR display technology thanks to the company’s adoption of Mini LED backlights. Conversely, perhaps because the new physical dimensions and processors took most of the spotlight, Apple was surprisingly quiet on its new MacBook Pro models’ Mini LED displays as it announced the release of these new computers during its October event. Not only did the Mini LED iPad Pros completely replace the previous edge-lit models, but these new tablets also featured a mere US$100 retail price hike, which basically entirely accounts for the cost of the new displays. Subsequently, the market began eagerly anticipating the release of the new Mini LED iPad Pro models. In contrast, whereas the 14.2-inch and 16.2-inch models of the new MacBook Pros also feature Mini LED displays exclusively, their retail prices saw significant jumps owing to the integration of multiple updated components and designs, in turn refreshing the enthusiasm of the market for Mini LED displays.
Thanks to the release of the two new MacBook models, annual Mini LED notebook shipment for 2021 reached 2.2 million units, representing a 1% penetration rate in the total notebook market. Regrettably, apart from MacBooks, the shipment volume of Mini LED notebooks released by non-Apple brands was rather insignificant. Looking ahead to 2022, given the all-out effort by Apple to ramp up MacBook shipment throughout the whole year, annual Mini LED notebook shipment for 2022 will likely undergo a staggering 360% YoY increase to eight million units for a 3.4% penetration rate. However, judging by notebook brands’ adoption of display solutions at the moment, most non-Apple brands will still gravitate towards OLED panels in 2022, with minimal adoption of Mini LED displays.
If Gen 8.5 OLED panel production lines are able to kick off mass production from 2024 onwards, will Apple transition its MacBook displays to a different solution much like it did for iPad? TrendForce believes that Apple has historically held a receptive attitude towards OLED solutions. Furthermore, from a technology assessment perspective, notebook computers and tablets are relatively similar in their display technologies and, to a lesser extent, use cases. If Apple does decide to transition iPad displays from Mini LED to OLED, then the company will likely do the same for MacBook display as well, in principle. On the other hand, LCD panels are still expected to remain the mainstream display technology for notebook computers in 2025. It, therefore, makes competitive sense for notebook brands to differentiate their products with OLED panels in the high-end segment and with LCD panels and Mini LED backlights in the premium mid-range segment or even mid-range segment. At any rate, given the shrinking gap between the cost structures of Mini LED solutions and OLED solutions, only by continually optimizing the manufacturing costs of Mini LED backlights can suppliers convince Apple to continue adopting Mini LED displays.
Despite their similar physical dimensions, notebook panels and tablet panels entail drastically different market conditions. Being two of the strongest performers in the relatively oligopolistic tablet market, Apple and Samsung collectively possess a nearly 60% market share, thereby forcing other brands to adopt a relatively passive strategy that prioritizes conserving market share over adopting emerging technologies. In contrast, the notebook computer market has remained competitive throughout the years, with market leaders HP, Lenovo, and Dell holding the absolute advantage in the commercial notebook segment. Even so, Acer and Asus still enjoy some degree of dominance in the consumer segment, not to mention the fact that Apple has carved a niche market of its own thanks to the absolute differentiation of MacBooks from the rest of the field.
With greater diversity of brands comes greater competition in the market. As such, companies must now continue to refresh their product specs and product ranges in order to stay competitive. In this regard, Mini LED products would appear to be likelier to see adoption in the notebook computer market than in the tablet market. It should be pointed out that SDC (Samsung Display Co.) holds the sole patent for OLED tablet panels – the main competitor of display solutions featuring Mini LED backlights and LCD panels. Although SDC is still figuring out its medium- and long-term strategies in the tablet market, it has been relatively aggressive in capturing share in the notebook market. For instance, SDC’s OLED notebook panels have been gradually cannibalizing market shares from LCD notebook panels since 2021. To date, more than four million notebook computers featuring Samsung’s OLED panels have been shipped, accounting for a nearly 2% market share. In addition, almost all mainstream notebook brands have started carrying their respective lineup of OLED notebooks.
The meteoric rise of OLED models in the notebook market this year can primarily be attributed to SDC, which is the sole supplier of OLED notebook panels. Whereas SDC previously allocated most of its production capacity for OLED (Rigid OLED) panels to smartphone displays, the successive ramp-up of Gen 6 production lines for OLED (Flexible OLED) panels in China has resulted in a hypercompetitive market with plummeting quotes that both placed significant downward pressure on the existing price band of rigid OLED panels and negatively affected demand for rigid OLED panels. Given that the aforementioned factors are unlikely to reverse course, SDC has therefore decided to reallocate their production capacity for rigid OLED panels from smartphone displays to notebook displays instead, since the former has continued to decline as an added value while the latter appears to have much more potential for growth.
Incidentally, SDC has spent considerable time cultivating its presence in the notebook computer market. The company formerly positioned its OLED solutions exclusively in the flagship market segment, with UHD/4K being the only resolution available on its OLED notebook panels. The adoption of these products was lukewarm at best due to OLED panels’ prohibitive prices and the very limited target audience for UHD models. Moving to 2020, however, SDC adopted a more ambitious approach to the notebook market and subsequently released a host of OLED panels featuring Full HD resolution in accordance with the mainstream market’s demands. By doing so, SDC was able to not only substantially lower its OLED notebook panel quotes, but also align its products with the enormous total addressable market of mainstream notebook consumers, in turn skyrocketing notebook brands’ willingness to adopt OLED panels.
Not only have OLED displays enjoyed a longstanding presence in the high-end smartphone and TV segments, but most consumers also generally understand that OLED panels are superior to traditional LCD panels with respect to such specifications as color saturation, contrast levels, and even physical thickness. For notebook computer brands, adopting OLED panels in their displays allows said brands to cut down on costs that would otherwise have to be spent on either educating the average consumer on popular science topics related to display technology or marketing the brands’ display solutions, as OLED displays’ superior specs are already widely known. That is why almost all mainstream brands, ranging from Asus to HP and Dell, have released OLED-equipped notebook computers, some of which even boast consumer-oriented product positions and consumer-friendly retail prices.
On the other hand, although the integration of Mini LED backlights significantly bolsters LCD panels’ traditionally weak contrast levels, significant marketing costs are required to ensure consumers understand the benefits of this new backlighting technology. While OLED solutions are already widely recognized in the market, Mini LED products’ vast marketing costs represent a significant competitive weakness against OLED products. Furthermore, manufacturing costs of display solutions that feature Mini LED backlights and LCD panel modules are about 30-50% higher than those of equivalent solutions featuring OLED panel modules due to the former’s complex design, high number of components, and limited economy of scale. Hence, high manufacturing costs are yet another obstacle preventing brands from investing in Mini LED development.
TrendForce expects global notebook shipment for 2021 to reach 244 million units, with 49% and 51% of the annual shipment taking place in 1H21 and 2H21, respectively. This distribution would seem to indicate that, although the growth momentum of consumer notebook models that began in 1H21 has gradually waned, strong performances from the commercial notebook segment are able to provide some upward momentum for the notebook market’s shipment performance in 2H21.
The first half of the year saw tight supply of materials, strong upside demand, and a market driven primarily by consumer models
Despite the shortage of materials from the supply chain, global notebook shipment for 1H21 still reached 119 million units. During this time, the COVID-19 pandemic caused considerable worldwide impact. Given the important role played by notebook computers in bringing business, education, and entertainment from the real world to the virtual world, shipments of commercial notebooks, Chromebooks, and gaming notebooks, which respectively fulfill the three aforementioned functions, remained strong.
Take Chromebooks as an example; shipment of these products reached 25.94 million units for 1H21, primarily thanks to a wave of procurement demand for educational notebooks, which are primarily produced and sold in response to tender offers, by the US, Japanese, and western European governments in an attempt to immediately kick off distance learning initiatives. The bullish Chromebook market also incidentally resulted in a 70% increase across the 1Q20-2Q21 period in the ASP of 11.6-inch notebook panels, which are used in mainstream Chromebook models.
Shifting demand and stabilizing supply of materials in 2H21 mean commercial notebooks have now become the primary driver of market growth
As the supply chain’s availability of materials gradually stabilizes in 2H21, global shipment of notebooks for the period will still likely reach 125 million units, a 5.7% increase compared with 1H21. Regarding quarterly shipments, market demand peaked in 3Q21, during which a total of 62.73 million notebooks were shipped. Following this peak, demand has remained mostly unchanged in 4Q21, reaching a forecasted 62.71 million units in shipment for the quarter. This slight decline can primarily be attributed to an estimated shipment of 11.62 million Chromebooks for 2H21, which is a 55.2% decrease from 1H21. The downturn of Chromebooks indicates that the educational notebook market, which is mostly driven by Chromebooks, no longer has sufficient momentum to keep up its high shipment in 2H21. Instead, demand has now shifted to commercial notebooks as the pandemic’s slowdown resulted in a corresponding return to physical offices and schools for work and study, respectively.
Fortunately for notebook manufacturers, commercial notebooks, which are primarily aimed at servicing enterprise customers, are able to shore up the weakening demand for other product categories in time in 2H21. On average, up to 34% of the product mixes offered by notebook brands such as Dell, HP, and Lenovo now consist of commercial models during this period. As such, TrendForce expects commercial notebook shipment for 2021 to reach 65.61 million units and account for 26.9% of total notebook shipment for the year.
Owing to persistently strong demand for notebook panels and increased supply of such upstream components as ICs and TCONs, quarterly notebook panel shipment reached yet another historical high in 3Q21, with 72.27 million pcs shipped, representing an increase of 7.1% QoQ, according to TrendForce’s latest investigations.
TrendForce indicates that the proliferation of the stay-at-home economy resulted in record-setting performances from the notebook panel market, in which quarterly shipment reached historical highs for three quarters consecutively across the 1Q21-3Q21 period. Nevertheless, market demand for panels has shown partial signs of weakening. Demand remains strong for commercial notebooks but has begun plummeting for consumer notebooks and Chromebooks. Alongside this drop in Chromebook demand, 11.6-inch panels, which are the mainstream size of Chromebook displays, have also dropped in terms of shipment volumes, reaching only 10.88 million pcs shipped in 3Q21, a 28.3% QoQ decline. Quarterly shipment of Chromebook panels is expected to undergo a further decrease in 4Q21. In addition, given the aforementioned strong demand for commercial notebooks, panel suppliers have quickly transitioned their focus towards 14-inch and 15.6-inch panels in response, and the combined quarterly shipment of both of these sizes reached 46.45 million pcs in 3Q21, a 20.2% QoQ increase. The bullish performance of these sizes of notebook panels thereby became the key reason behind the historical high in notebook panel shipment in 3Q21.
Due to panel suppliers’ swift response to changes in the market, notebook panel shipment for 2H21 is not expected to be overly impacted by the weakening demand for Chromebooks and consumer notebooks. For now, TrendForce projects notebook panel shipment for 4Q21 to reach 71.15 million pcs, while shipment for the entire 2021 is expected to reach 278.1 million pcs, a 23.2% YoY increase. Looking ahead to 2022 and regarding the supply side of the panel market, most panel suppliers will be aggressive in their shipment plans for notebook panels due to the massive growth in notebook panel shipment across the 2020-2021 period. As such, panel suppliers are planning to ship about 330 million pcs of notebook panels in 2022. However, if a corresponding demand for notebooks fails to emerge next year, the notebook panel market may enter into an oversupply situation, thereby placing downward pressure on panel prices. Regarding the demand side of the panel market, demand for Chromebooks and consumer notebooks will likely continue to slow down next year, but this slowdown will be accompanied by a corresponding growth in commercial notebook demand due to the persistent growth of the overall economy, along with the global digital transformation also taking place. Taking these factors into account, TrendForce expects annual notebook panel shipment for 2022 to reach 279 million pcs, representing a slight growth of 0.3% YoY.
For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at firstname.lastname@example.org
Apple recently unveiled its newest lineup of 14.2-inch and 16.2-inch MacBook Pros, which represent the company’s latest effort to extend its application of display backlights with Mini LED technology from the 12.9-inch iPad Pro to the MacBook Pro range. TrendForce’s latest investigations indicate that, in light of Apple’s foray into the high-end notebook computer market with the latest generation of MacBook Pro, annual shipment of notebook computers equipped with Mini LED backlight for 2022 will likely reach five million units, a 213% YoY increase.
It should be pointed out that, due to OLED supplier Samsung’s aggressive efforts to capture shares in the notebook market this year, annual shipment of notebooks with OLED panels for 2021 will likely reach 2.5 to 2.7 million units, which represents a penetration rate of about 1.1%. OLED displays compete directly with Mini LED displays in the high-end notebook market, meaning the adoption of Mini LED displays by non-Apple notebook manufacturers has consistently been limited. In addition, Apple waited until 4Q21 to release the new MacBook Pro models. Taking these factors into account, TrendForce is therefore revising its forecast of annual shipment of notebooks with Mini LED backlight for 2021 from 2.4 million units down to 1.65 million units.
TrendForce indicates that Apple’s product planning regarding the newest MacBook Pro lineup marks a departure from its previous strategy of having only a 13.3-inch model for the entry-level segment and a 16.2-inch model for the high-end segment, since the newest 14.2-inch MacBook is positioned as a product for the mid-range segment. Regarding pricing, the 14.2-inch model at base configuration costs US$500 more than the 13.3-inch model and US$500 less than the 16.2-inch model, assuming all aforementioned models are equipped with a 512GB SSD. Regarding technical specs, not only do the new models feature an improvement in CPU/GPU, but their backlight has also been upgraded to Mini LED technology. With these advancements in both computing power and display performance, Apple will likely be able to erase any doubts from consumers regarding the merit of the price hike.
Both of the new MacBook Pro models are equipped with a Mini LED backlight, with about 8,000-11,000 Mini LED chips divided across 2,000-2,600 local dimming zones, resulting in a 1,000,000:1 contrast ratio. Mainstream Mini LED backlight-equipped notebooks from other manufacturers, on the other hand, generally feature about 240-512 local dimming zones, thereby showing Apple’s relative superiority in display technology. Furthermore, despite being a step up in terms of display size from the 13.3-inch model, the 14.4-inch model maintains a similar thin and light profile even though it contains a direct-lit Mini LED backlight, which requires additional clearance for light mixing and additional PCB substrate thickness.
Along with Apple’s continued adoption of Mini LED backlight technology, a plethora of new participants are expected to enter the Mini LED supply chain in 2022, in turn making this technology much more cost-effective and benefitting companies that are not part of Apple’s supply chain as well. Companies that are set to benefit next year include Mini LED chip suppliers (e.g., Ennostar and Osram), testing and sorting service providers (e.g., FitTech, Saultech, and YTEC), SMT suppliers (e.g., TSMT and Yenrich), backplane PCB suppliers (e.g., Zhen Ding Tech, Tripod Technology, and Apex), driver IC suppliers (e.g., Parade, TI, Novatek, and Macroblock), light source module suppliers (e.g., Radiant/ROE and GIS), and OEMs (e.g., Quanta and Foxconn).
For more information on reports and market data from TrendForce’s Department of Optoelectronics Research, please click here, or email Ms. Grace Li from the Sales Department at email@example.com