This analyst opinion piece describes the Qualcomm-BOE collaboration combining Qualcomm’s TFT-based ultrasonic 3D Sonic solution and BOE’s flexible AMOLED displays to increase value for displays, adding FoD and fingerprint sensors.
- Owing to the US-China trade war, Chinese smartphone brands are still concerned about Qualcomm’s 3D Sonic solution for further adoptions. On the other hand, when Chinese smartphone brands adopt BOE’s AMOLED displays, the solution may benefit from their adoptions through the collaboration.
- As most panel makers’ smartphone display shipments focus on the “display module assembly” business, which include many related parts such as touch and cover lens, adding Qualcomm’s 3D Sonic fingerprint-on-display (FoD) solution can increase the average selling prices (ASPs) of BOE’s AMOLED displays.
Qualcomm and BOE announced their collaboration on April 14, 2020, which will combine Qualcomm’s 3D Sonic solution, a thin-film-transistor (TFT)-based ultrasonic technology, and BOE’s flexible AMOLED displays to increase add-on values for the displays. Qualcomm will provide its FoD sensors through the collaboration, and BOE will offer integrated display assembly with Qualcomm’s 3D Sonic fingerprint sensors to its customers.
In addition to the smartphone application, both companies expect the synergy of combination can be extended to new fields, such as wearable computing, medical equipment, XR (extending reality beyond augmented reality [AR] or virtual reality [VR]), Internet of Things’ (IoT) applications, and so on. BOE has recently extended its business coverage as a system integrator role, which expands beyond the display manufacturer role, to some emerging commercial applications. The products delivered from BOE can have the flexible displays’ advantages, such as the comfortability of foldable form factor, and advanced biometric recognition.
Qualcomm’s 3D Sonic FoD solution
Qualcomm’s 3D Sonic solution uses the ultrasonic principle. Compared with TDK’s microelectromechanical sensors (MEMS)-based ultrasonic solution, which is based on the silicon wafer process and previously by InvenSense, Qualcomm’s solution has low-temperature polycrystalline silicon (LTPS)-TFT circuits to drive the sensor material, which is made of a specific piezoelectric material. Qualcomm’s 3D Sonic sensor can be bigger with the cost-effective TFT-based sensor manufacturing process. The latest sensor sizes produced are 4x9mm and 8x8mm. A much bigger option of 20x30mm, known as 3D Sonic Max, were demonstrated in December 2019.
The sensor’s major components include Century’s LTPS-TFT backplane, electrodes, and the copolymer coating by GIS or OFILM, which is the piezoelectric material to generate and receive ultrasonic waves as transmitter (Tx) and receiver (Rx) functions. The module thickness depends on the glass substrate with TFT circuits; adopting a bigger LTPS-TFT backplane can enlarge the sensor area. However, a larger sensor area may result in issues of yield rate and sensor capacity. Qualcomm hosts the supply chain and provides the ASIC (QBT2000), which drives the sensor circuits and critical for fingerprint imaging and recognition.
The 3D Sonic solution is only feasible on flexible AMOLED displays. Any air gap or layer in the transmission path blocks the ultrasonic waves. Rigid AMOLED displays, such as glass-based substrate and encapsulation, usually have the nitrogen gas filled to remove the oxygen, which damages OLED materials. On the other hand, flexible AMOLED displays have condensed thin film encapsulation (TFE), and it can work as the transmission medium for ultrasonic waves, including Tx and Rx. Samsung Display’s flexible AMOLED displays have been using Qualcomm’s 3D Sonic solution for Samsung Galaxy S10, S20, and Note 10 series. BOE is one of the major flexible AMOLED panel makers, next to Samsung Display. Therefore, Qualcomm considered BOE as an option for collaboration.
FoD market grew remarkably to 228 million units in 2019, compared with 29.5 million units in 2018; Omdia estimates that it can be more than 400 million units in 2020. Despite the notable FoD market demand, Qualcomm’s 3D Sonic sensors did not have the same growth because it is limited to a single customer, which is Samsung, along with its few smartphone models, such as the Galaxy flagship series. The shipments were not more than 50 million units. Chinese smartphone brands should be Qualcomm’s priority after Samsung. However, the 3D Sonic solution did not have any design-in projects in China last year. In addition to the US-China trade war, its higher module ASP, which was $12 in the first quarter of 2019, concerns these brands.
BOE’s flexible AMOLED displays
Most AMOLED capacity, which increased recently in China, is prepared for flexible AMOLED displays. Despite its lower yield rate compared with Samsung Display, BOE is still the most critical flexible AMOLED panel maker in China. BOE is busy improving its essential yield rates of flexible AMOLED display manufacturing, such as LTPS backplane, fine metal mask (FMM) evaporation, and TFE, for effective capacity. On-cell touch with Youm On-Cell Touch AMOLED (Y-OCTA) approach, which uses direct sensor patterning on TFE instead of the cyclic olefin polymers (COP) film substrate, will be prioritized very soon.
If BOE can optimize its flexible AMOLED display production, Chinese smartphone brands will increase their adoptions of AMOLED displays instead of being limited to Samsung Display and poor leverage on price negotiation. BOE is also approaching Apple for its certification and adoption for future iPhone models. Balancing the risk of AMOLED display sources is also beneficial to Apple. So far, Samsung Display is the major supplier. Despite LG Display joined the supply chain last year, its shipments were apparently lower than Samsung Display. BOE expects to be the third supplier in 2020 or 2021.
Panel makers’ smartphone display businesses are quite different from those of larger-sized IT and TV applications. Smartphone display modules require more effort. Besides embedded touch display supply (in-cell or on-cell touch), smartphone brands request panel makers to take care of cover glass bonding, profiled cutting such as notch and four round corners, and hole-drilling in the display active area for front-facing cameras. The aim is to shorten the supply chain flow for smartphone brands’ procurement.
The integration service, from display to module assembly, lowers panel makers’ gross margins, but it also increases displays’ ASPs and revenue. If FoD sensors can be assembled and included, the final display module ASPs and values can be higher. BOE has contacted GIS for the details on assembling Qualcomm’s 3D Sonic solution. Both companies have factories in Chengdu, and the locations are very close to each other. While Samsung Display is responsible for the assembly of 3D Sonic solution for the Galaxy flagship series, GIS and OFILM supply the sensors to Samsung Display.
Mutually benefited from each other
All in all, this collaboration is mutually beneficial to Qualcomm and BOE. So far, Qualcomm has a difficult time in introducing its solution to Chinese smartphone brands. The reasons include the Qualcomm as the single supplier, the US-China trade war, and expensive flexible AMOLED displays, dominated by Samsung Display. BOE’s production can make flexible AMOLED displays more affordable.
Along with BOE’s flexible AMOLED displays, Qualcomm’s 3D Sonic solution will have a stable outlet instead of the difficulty in approaching Chinese smartphone brands as a US supplier. This collaboration has nothing to do with the investment, thus, the Committee on Foreign Investment in the United States (CFIUS) will not be concerned. In addition, sensor production can have multiple sources, but only Qualcomm’s ASIC can drive the sensors.
The 3D Sonic solution has some advantages over the popular optical imaging CIS solutions by Goodix and EgisTec. Its module thickness, sensor area potential, and live-body detection may be better. This can create add-on values and differentiations to BOE’s flexible AMOLED displays as well to increase BOE’s display ASPs and revenues.
Additionally, Omdia estimates an optimistic situation—BOE is expecting an outcome with Apple. If Apple adopts both BOE’s flexible AMOLED displays and Qualcomm’s 3D Sonic solution to replace its Face ID, BOE can provide the assembly integration service, including display, FoD sensor, cover glass bonding, and touch lens. Once Apple adopts 3D Sonic solution for its future iPhone models, the demand may be more than 150 million units; this volume is more than what GIS and OFILM can deliver. BOE can be the third FoD sensor supplier. This will also be beneficial for BOE to consume its LTPS capacity.