Recently, according to DIGITIMES, industry sources revealed that the largest LED chip manufacturer in mainland China has lowered its quotation by 10-15% to compete with Taiwan's Epistar for Mini LED chip orders for LCD panels.

In response, Sanan Optoelectronics responded: "I don't know the situation, I need to confirm it, and the announcement shall prevail."

In March of this year, it was reported that Sanan Optoelectronics successfully passed the certification and is expected to join the Apple supply chain as soon as the second quarter, but the plan was delayed due to the epidemic closure and control in the eastern part of the country. This is also another Chinese Mini LED chip manufacturer successfully entering Apple's supply chain after Fucai.

The source pointed out that Epistar is currently Apple's largest supplier of Mini LED chips, and Austria-based ams-OSRAM is the second largest supplier. However, it is said that ams-OSRAM will stop supplying Mini LED chips and instead develop Micro LED chips.

Apple has adopted a policy of adding mainland Chinese manufacturers to its supply chain to improve bargaining power and diversify supply risks. In addition, Epistar's existing Mini LED chip production capacity will not be enough to meet Apple's demand in the short term. Sanan Optoelectronics has improved the yield of Mini LED chips and is increasing shipments to international suppliers.

Sanan Optoelectronics announced in March this year that it had received orders for Mini LEDs from important international customers, and started shipping. The order size exceeded RMB 170 million. Although Sanan Optoelectronics did not specify the name of the customer, the market believes that it is likely to be Apple.

The market believes that Sanan Optoelectronics has solved the patent problem and officially entered Apple. After Sanan Optoelectronics rushes in, it may start a low-price order grabbing strategy, which will challenge the market position of domestic Mini LED manufacturers.

As long as it can meet Apple's quality requirements for Mini LED chips, Sanan Optoelectronics will definitely enter its supply chain, and there is no need to reduce quotations to compete for orders. The quality of Mini LED chips is the key to production cost, and stable production of high-quality LED chips is more important than price.

However, the sources also said that as Mini LED chip yields improve and production volumes increase, chipmakers will be required to reduce prices by 5-10% in the second half of 2022.