Guotai Haitong Securities released a research report stating that if the Micro LED industry achieves continuous breakthroughs in two key areas—reducing large-scale production costs and advancing the technical feasibility for optical interconnect applications—it is expected that from 2026 onward, Micro LED will progressively expand its applications. Initial adoption in smartwatches and AR smart glasses is anticipated to evolve into ultra-large-size (over 100 inches) ultra-high-end TVs, commercial displays, and high-end automotive HUD displays. Furthermore, ongoing advancements in short-range communication technology within AI computing server centers are anticipated. The Micro LED industry is projected to gradually broaden its application scenarios and market scale over the coming years.
The primary viewpoints of Guotai Haitong Securities are as follows: Micro LED is hailed as the "ultimate display technology." With pixel sizes typically ranging from 5 to 100 micrometers, Micro LEDs achieve display effects by generating photoluminescence through electron excitation in semiconductor materials. Its advantages include: ① Ultimate performance, as each pixel emits light independently, enabling infinite contrast ratios and extremely high brightness; ② Exceptionally long lifespan, with aging rates significantly slower than OLED, completely eliminating the risk of "burn-in"; ③ Remarkable energy efficiency, as pixels can be completely turned off when displaying black, resulting in very low power consumption.
2024 marked the "darkest hour" for the Micro LED industry. Apple Inc. had been developing a Micro LED plan for several years, viewing the technology as the successor to OLED and ultimately intending to incorporate it across all its products, from the Apple Watch to the iPhone and Mac. As early as 2018, Apple believed it could equip the Apple Watch with a Micro LED screen by 2020, but this timeline was repeatedly postponed to 2024 or even later. In 2024, Apple ceased its internal efforts to adopt Micro LED technology. Its supplier, AMS-Osram, lost the related Micro LED contract and was forced to initiate layoffs, plunging the entire industry into its "darkest hour." The reasons behind Apple's decision to abandon its efforts include the significant challenges in Micro LED manufacturing, such as difficulties in mass production, the high complexity of mass transfer technology, exorbitant costs, and insufficient industry chain support.
The Micro LED industry is poised for a "rebirth" in 2025 and beyond. Key developments include: ① The challenge of transferring millions or even tens of millions of micron-scale LED chips from the growth substrate to the driver backplane with high speed, precision, and low cost is being progressively overcome. For instance, Q-Pixel introduced its Q-Transfer technology, achieving a transfer yield exceeding 99.9995%. ② In September 2025, Garmin launched the Fenix 8 Pro, the world's first Micro LED smartwatch, demonstrating that the technology has reached commercial viability for wearable devices. ③ As a light source for optical interconnects, Micro LED offers advantages like low power consumption, higher data transmission density, and superior temperature stability. Credo plans to advance the mass production of related technologies in the short term, while a Microsoft research team introduced the MOSAIC optical interconnect solution, which utilizes hundreds of low-speed, parallel Micro LED channels instead of a few high-speed channels for data transmission.
Risk warnings: The high difficulty of mass-producing Micro LEDs may keep costs elevated; downstream customers might not adopt Micro LED technology solutions, leading to slower-than-expected industry development; and research into optical interconnect light source technologies could decelerate or be abandoned entirely.
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