KUO, MING-CHI, an analyst for the TF International Securities Group, has noted on the latest report released on the 11th that Zhen Ding, Avary Holding (reinvestment by Zhen Ding), and Flexium should be Apple’s key PCB suppliers in the years 2019-2020. As for the upper antenna (UAT) on the new 6.1-inch LCD iPhone that will be marketed in the second half of 2019, the mixed design of MPI and LCP may still be maintained and the shipping of FPC for MPI by Avary/Zhen Ding and Flexium is expected to be better than the current market expectations. 

KUO, MING-CHI additionally pointed out that the market has been worrying in the past month and the re-adoption of the LPC as FPC on the upper antenna of the 6.1-inch LCD iPhone has significant production problems. News of these production problems is also likely to generate negative impacts on the key MPI suppliers such as Avary and Zhen Ding. Nevertheless, manufacturing preferences have continued to resort to the mixed design of MPI and LCP (the ratio of Avary/Zhen Ding and Flexium would each amount to about half).

KUO, MING-CHI further stated that Flexium would benefit from both the upgrade of the antenna specifications of NFC FPC for the new iPhone and the boost of supply proportions in the second half of the year. It is also expected that the antenna of NFC FPC will be upgraded from a 2-layer to a 4-layer board, with expectations in a significant price increase. As for the supply proportions, Flexium is likely to enjoy an increase from its previous ratio of 30-40% to 50%.

KUO, MING-CHI expects that Avary/Zhen Ding and Flexium will begin the supply of the LCP FPC for Apple’s iPhones from 2020. Since the new iPhone in the second half of 2020 will support 5G, the demand in LCP will increase significantly and Apple would need more LCP suppliers to reduce their supply risks. As such, Avary/Zhen Ding is expected to become the LCP supplier for iPhone LCP. On the other hand, Flexium will begin to ship LCP FPC for the new iPad Pro (10-layer board) from the fourth season in 2019 to the first quarter of 2020. Moreover, since the current sample yield is positive, it is expected that products can be successfully shipped and will result in Flexium becoming the new LCP supplier for the iPhone in the second half of 2020.

KUO, MING-CHI also pointed out that the new OLED iPhone to be released in the second half of 2020 will adopt the Y-OCTA touch technology and COP (in place of external touch and 2 metal COF), which is expected to result in reduced costs, reduced panel and frame thickness, and is advantageous for the product design. In addition, it is anticipated that Avary/Zhen Ding may be one of the suppliers of the OLED iPhone. It is predicted that the new design of outlook is considered as one of the main selling points for the new OLED iPhone in 2020. Since Y-OCTA needs COP for its realization and the production process of COP includes rigid-flex soft board, SMT, lamination and others, Avary/Zhen Ding is arguably expected to play a part in the supply chain of COP for Y-OCTA.

Furthermore, Flexium is the exclusive backlight PCB supplier for Apple Mini-LED/Mini-LED products. After Apple announced its adoption of the 32-inch Pro Display XDR with Mini-LED technology, we have become more convinced that Apple will launch a high-end iPad and MacBook with Mini-LED in the fourth quarter of 2020. It is also estimated that Flexium is the exclusive backlight PCB supplier for high-priced Apple Mini-LED/Mini-LED products. As a result of the Mini-LED of iPad and MacBook using more than 10,000 LEDs (vs. 576 LEDs of Pro Display XDR), backlight PCB used for SMT would include higher specifications and Flexium is expected to significantly benefit from this new product category in medium and long-term prospects. (News source: LTN)