According to Zhitong Finance APP, Huajin Securities released a research report stating that the growing demand for smart wearable devices, along with the rise of generative AI large models, is pushing AI audio glasses into a broader market. In the short term, with a vague user profile for AR glasses, smart audio glasses can replace headphones and serve as a carrier in the form of glasses (for vision correction/decorative purposes), using AI to enhance the experience and selling points, potentially opening up a new avenue for audio products. It is recommended to pay attention to manufacturers that enter various product supply chains or have relevant technological reserves.

The main viewpoints of Huajin Securities are as follows:

The high brightness characteristics of MicroLED solve the problem of low optical efficiency in waveguide technology.

Optical waveguides have the advantages of being lightweight and having high transmittance, making them easy to form into glasses, and are considered the most promising optical solution for AR applications. However, optical waveguides also have the weakness of low optical efficiency, ranging from 0.1% to 10% (with diffractive optical waveguides at 0.1%-0.3% and array optical waveguides at 5%-15%). All-weather AR glasses require a peak brightness of 3000 nits at the eye, so the display brightness at the input end must be high. Calculating at 1% optical efficiency, to achieve 3000 nits at the eye, the luminous brightness needs to reach 0.3 million nits. If calculated at 0.1% efficiency, it should reach 3 million nits of brightness. Furthermore, due to the need to form a glasses shape, there are high requirements on the area and volume of the display screen, which typically should not exceed 1 cc (cubic centimeter), thus placing high demands on the volume and pixel density of the display screen, usually requiring a ppi of over 4000.

Monochrome MicroLED has mature mass production capability, while full-color technology has its own pros and cons.

Currently, the optical solution utilizing Micro-LED and diffractive optical waveguides has gradually become the mainstream choice for AR glasses. Among them, the single green Micro-LED display has already demonstrated mature mass production capabilities and has resulted in cost reductions, with Micro-LED AR glasses priced below 2000 yuan appearing on the market. Monochrome Micro-LED is the foundation for full-color display, and the differences in substrate materials for blue/green light and red light LEDs also affect the differences in bonding, substrate peeling, and other processes for monochrome Micro-LED. The current full-color solutions for Micro-LED micro-displays mainly include light combining methods, quantum dot color conversion, three-color stacking, and direct epitaxy on a single chip.

(1) Color mixing scheme: Comprising an R/G/B monochrome Micro-LED micro-display panel and a color mixing prism, which mixes the light from the red, green, and blue monochrome micro-display panels through the color mixing prism. (2) Quantum dot color conversion: The color conversion process of monochrome Micro-LED using quantum dot (QD) materials mainly includes inkjet and photolithography methods. (3) Tricolor stacking: Direct vertical stacking bonding of R/G/B on the Micro-LED epitaxial layer, which minimizes the size of each pixel. (4) Single-chip direct epitaxy: Growing R/G/B tricolor epitaxy on the same epitaxial substrate. Specifically, tricolor mixing is a relatively basic and mature route but still requires reduction of module size; quantum dot color conversion is currently the hottest direction in single-chip full-color research and is also the simplest process route in the laboratory stage, with the challenge of improving light conversion efficiency; tricolor stacking and single-chip epitaxy have high technical difficulty and are overall still in the experimental stage.

Collaborative development between industry and academia, with domestic manufacturers accelerating industrialization and research institutions continuing to achieve technological breakthroughs.

(1) Industry: ① Sitong Technology: In June 2024, the mass production plant covering approximately 0.02 million square meters in Xiamen will officially begin production. Sitong Technology has established a complete chain from chip design to mass production processes, with an annual production capacity of over 6 million sets from the Shenzhen pilot line and the Xiamen mass production line. ② TCL Huaxing: In October 2024, the Micro-LED pilot line co-invested by TCL Huaxing and Sanan has been completed and is expected to achieve small-scale trial production in 2025. ③ HC SemiTek Corporation: On November 6, 2024, HC SemiTek's 6-inch Micro-LED production line will officially begin operations in Zhuhai. This project is the first globally to achieve mass production of Micro-LED at scale and is also the world's first 6-inch Micro-LED production line, with an annual production capacity of 0.024 million Micro-LED wafers (6-inch chips) and 45,000 kk Micro-LED pixel devices upon full production.

④ Leyard Optoelectronic: On November 20, 2024, Leyard's first phase of fully self-developed next-generation advanced MIP production line (Note: Advanced MIP uses substrate-free Micro-LED chips with sizes less than 50μm, which are smaller than the chips used in the previous MIP) will officially go into operation at the Wuxi Lijing factory. ⑤ Chenxian Optoelectronics: On December 19, 2024, Chenxian Optoelectronics will light up its TFT-based Micro-LED mass production line, which includes automated intelligent production lines for transfer processes, backplane processes, and module processes, and will launch new 135-inch Micro-LED splicing screens, as well as Micro-LED transparent splicing screens and Micro-LED light field naked-eye 3D screens. ⑥ Tianma Microelectronics: On December 30, the "Tianma New Display Technology Research Institute Micro-LED production line" successfully achieved seamless process integration and is planned to start small-scale production in 2025.

(2) Academia: The Hubei Optics Valley Laboratory has collaborated with Huazhong University of Science and Technology to develop high-performance quantum dot photoresists, which are expected to bring breakthroughs to Micro-LED full-color display technology; the team from Hunan University, in cooperation with Nuo Vision Technology and Crystal Energy Optoelectronics, has developed a super bright Micro-LED micro-display chip and has achieved single pixel brightness of up to 10 million nits for green Micro-LED displays on a highly uniform silicon substrate GaN epitaxial wafer.

Related symbols

Optics: Zhejiang Crystal-optech (002273.SZ), Goertek Inc. (002241.SZ), OFILM Group Co., Ltd (002456.SZ), Will Semiconductor (603501.SH). ODM/OEM: Goertek Inc. (002241.SZ), Yidao Information (001314.SZ), Cosonic Intelligent Technologies (300793.SZ). Storage: GigaDevice Semiconductor Inc. (603986.SH), Bywin Storage (688525.SH). Camera: Will Semiconductor (603501.SH), SUNNY OPTICAL (02382).

SoC: Bestechnic (Shanghai) Co., Ltd. (688608.SH), Rockchip Electronics (603893.SH), China Science and Technology Blue News (688332.SH), Jucix Technology (688049.SH), Shanghai Fullhan Microelectronics (300613.SZ). Structural parts: Shenzhen Jame Technology Corp. (300868.SZ), Shenzhen Everwin Precision Technology (300115.SZ). Screen: BOE Technology Group Co., Ltd. - A (000725.SZ), HC SemiTek Corporation (300323.SZ), JBD (not listed).

Batteries: Haopeng Technology (001283.SZ), Shenzhen Desay Battery Technology (000049.SZ), Sunwoda Electronic (300207.SZ), ATL (not listed). Terminal manufacturers: Rokid (not listed), Thunderbird Innovation (not listed), Xreal (not listed), Yingmu Technology (not listed), Shanjij Technology (not listed).

Risk Warning

Risks of the technology evolution track and industrial ecology not being well-defined; risks related to insensitivity to the industrialization process of key forward-looking technologies; risks of the content ecosystem's construction not meeting expectations; risks of downstream demand not meeting expectations.