Ams Osram has big plans for small LEDs

When it comes to LEDs at optical component and sensor maker ams Osram, there could be a big future in going small, if the plans of CEO Alexander Everke come to fruition.

Speaking to analysts during a web call to discuss third-quarter results last month, Everke reaffirmed the eventual importance of micro LEDs to revenue, and stated that production will start in 2024.

Micro LEDs — much smaller than today’s standard LEDs and smaller still than the interim “mini LED” category — have been on the roadmap since before Premstaetten, Austria–based ams took over Munich, Germany–based Osram in July 2020. Former Osram boss Olaf Berlein used to mention them, although he was more adamant about nearer-term possibilities for mini LEDs.

Under Everke, the combined ams Osram has been constantly reviewing and recasting the business divisions and product lineup that it took on with the Osram acquisition. It has jettisoned many operations, most recently the remaining LED driver unit and before that Traxon Technologies, a sale that closed this month.

But Everke has been adamant that micro LEDs are a keeper. They are a major reason why the company last April committed nearly a billion dollars to expand its Kulim, Malaysia manufacturing facility, a move that came at the expense of closing other factories.

A new plant at Kulim will crank out micro LEDs and LEDs on 8-in. wafers, a step up from the 6-in. wafers in use since Osram opened the facility in November 2017, when the factory was heralded as state-of-the art. Larger wafers can be more economical because they yield more chips.

On last month’s analyst call, Everke revealed that Kulim production of micro LEDs will start in 2024. The company had not previously publicly committed to a timeframe. He emphasized that ams Osram will in general focus its LED efforts on segments where it feels it has a competitive advantage with differentiated products. He singled out micro LEDs along with horticulture, UV-C, and pixelated automotive headlights.

“Micro LED is certainly one of the prominent examples where we are clearly leading and that’s the reason why we are the first and only one building an 8-in. very differentiated manufacturing [facility],” he said, referring to the Kulim expansion. “The manufacturing side just building up in Malaysia will be able to ramp production in 2024.”

Some analysts believe that micro LEDs will play a big role in display technology. Although some say that advances and lower costs in other technologies such as OLED and LCD could curb their importance in televisions, they could be critical enablers of small screens in wearable devices such a smartwatches, AR/VR glasses and headsets, and the like. Everke has identified AR/VR as an important growth sector for ams Osram.

On last month’s call, he voiced confidence in a wide market for micro LEDs.

“We see more and more traction and interest in multiple areas of applications which goes from not only the consumer space, but also the automotive space (and) TV opportunities,” he said. “So we see a broader range of interest for this technology in multiple market segments.”

Everke also expressed trust in customer loyalty in the micro LED segment, compared to the more fickle situation in sensors. Ams Osram’s product stable includes sensors as well as laser chips and LEDs. The company in the recent past suffered from the loss of a major customer, believed to be Apple, which had been purchasing facial recognition sensors for smartphones.

“In micro LED, you can expect more longer term and more sticky business over the years,” he said.

In announcing third-quarter results, Everke said that one customer had agreed to make a “substantial pre-payment” for future deliveries of an “innovative technology.” The payment is believed to be for micro LEDs, although neither Everke nor outgoing chief financial officer Ingo Bank confirmed that on the call.

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).

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