Changhua Technology successfully developed Mini LED lead frame, which can increase brightness by 30%

Changhua Technology, a major lead frame manufacturer, has successfully developed the MiniLED lead frame, which is highly recognized by the market because it can be used for LED lighting and the brightness is increased by 30%.

Huang Jianeng, chairman of Changke, said that due to limited initial production capacity, priority will be given to supplying applications such as automotive lighting, monitors, and laptop panels. In the future, with the gradual expansion of production capacity and cost reduction, there will be opportunities to enter the huge high-resolution TV backlight market.

Changke is a major supplier of lead frames for semiconductors. Especially after acquiring the lead frame business of Japan Sumitomo Mining Co., Ltd., its market share has increased rapidly. This year, it has benefited from the shortage of lead frames. Its revenue has hit record highs one after another, and its profits have set a record high for the fifth consecutive quarter.

Faced with variables such as semiconductor inventory adjustments and power cuts in Sichuan, Huang Jianeng, chairman of Changhua Group and Changke, said that Changke’s revenue in August and September will indeed be affected by power cuts in Sichuan. However, since the Chengdu factory accounts for less than 6% of Changke’s overall revenue, and the production schedule can be adjusted through inventory or adjustment, the overall impact is expected to be slight. However, it will still be necessary to continue to observe whether Sichuan’s power supply is restored to stability in the future.

Huang Jianeng analyzed that the weakening of consumer demand caused by high inflation has indeed caused a decline in the sales of Quad Plane No-lead (QFN) chips used in consumer product-related chips. However, as automotive and industrial demand is still solid, Changke's revenue target for this quarter remains unchanged.

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As for the fourth quarter, due to the current high global environmental variables, visibility is not high, but the general tendency will be revised downwards. However, he believes that if it is revised, the fourth quarter will also be the bottom of the lead frame, because it is expected that after the semiconductor inventory adjustment comes to an end, the demand for consumer products will recover, and the semiconductor lead frame will soon fall into a shortage state.

Earlier, Changke raised its third-quarter consolidated revenue forecast at the press conference to be between 3.68-3.87 billion yuan (NT$, the same below). Assuming an average exchange rate of 29.8 yuan to 1 U.S. dollar, the gross profit margin is estimated to be 29.5% to 31.5%; the operating profit rate is 21.5% to 23.5%. If it approaches the lower edge, it is expected to decline slightly from the second quarter.

Huang Jianeng said that currently clients have different views on this wave of semiconductor inventory adjustments. The most pessimistic ones believe that it will be in the second quarter of next year, but it is generally believed that the adjustment will be completed in the fourth quarter of this year and the first quarter of next year.

Huang Jianeng is still optimistic about the lead frame market next year. The main reason is that in addition to the fact that semiconductor lead frames will soon be out of stock again, he also revealed on the 24th that Changke has taken the lead in the world in developing Mini LED lead frames and has entered European automotive lighting manufacturers and monitor and laptop panel backlight applications.

Huang Jianeng emphasized that Changke has successfully developed the MiniLED lead frame, which can increase the brightness of MiniLED by 30%. Therefore, in addition to entering the European automotive panel manufacturers, it has also been introduced by Taiwanese LED manufacturers for monitor and notebook panel backlight applications, and has the opportunity to quickly replace the material business opportunities controlled by BT carrier boards.

In order to expand the scale of the Mini LED supply chain and accelerate the penetration rate of Mini LED, Huang Jianeng also plans to form a Mini LED material supply alliance, combining material factories, LED module factories and LED factories to leverage the collective power of the group to expand business opportunities.