Fucai: MicroLED is gradually being introduced into the terminal market and is expected to contribute revenue this year

LED manufacturer Fucai will be affected by the off-season in the first quarter of this year. It is expected that the revenue of the sensing and lighting businesses will decrease slightly. However, the demand for backlight products will have a high single-digit quarterly growth, and the revenue of automotive products will also have nearly double-digit growth in the first quarter. As it gradually enters the peak season, and the proportion of value-added products increases, overall, the outlook for all businesses this year is relatively optimistic.

In terms of Fucai's sensing business, the growth of the wearable device and NB application market this year is limited. However, thanks to the smooth introduction of new customer products and the contribution of new customers, the full-year sensing business revenue is positive. In the future, we can also look forward to new application fields of wearable products, such as blood pressure and blood sugar measurement, AI PC driving demand for NB sensing applications, etc.

In terms of the special lighting business, the first quarter is the off-season for lighting, and revenue will decrease slightly. However, there are new industrial lighting projects throughout the year, and plant lighting is also growing steadily. The special lighting business is expected to grow steadily throughout the year. In terms of display signage, revenue in the first quarter also declined quarterly due to the off-season. However, due to the smooth development of advanced display, the yield rate has increased significantly. Starting this year, Micro LED will also be gradually introduced into the terminal market, which can contribute to revenue. This shows optimism for the whole year.

Fucai's Micro LED layout includes displays, wearable watches, automotive applications, etc. The results of displays and wearable devices can be seen this year; the automotive part is expected to be gradually introduced next year before there will be significant growth. There have been significant breakthroughs in the yield rate of Micro LED production lines in the past few quarters, and good results have been achieved in customer verification and product introduction. Currently, in the process optimization stage, it hopes to use existing production capacity to increase output.

In terms of the backlight business, the demand in the first quarter will be higher than that in the fourth quarter of last year. TVs benefited from the subsidy program in mainland China in the second half of last year, which led to significant growth in the consumer market. The demand for large-size TVs is booming. Due to the larger size, the demand for LEDs has also increased; while IT's NB, Monit or, etc., there were many urgent orders in the first quarter due to geopolitics. In addition, due to the wave of phone purchases during the epidemic, about 4-5 years have passed and it is expected that the phone replacements will begin this year, which will help increase market demand. In the second half of this year, new customers will join the IT business, and the revenue contribution from new customers will be more obvious next year.

Fucai's unmanned factory in mainland China's backlight factory will be successfully completed this year, and it is expected to pass product certification by the end of the year. The revenue contribution next year is expected to be more obvious, and samples will be gradually released from this year.

In terms of the automotive business, the revenue in the first quarter is expected to grow by nearly double digits. After participating in the CES show at the beginning of the year, it began to have intensive contact with American car manufacturers and has a specific timetable to discuss the details of the project.