Trendforce

TrendForce says that microLED-based optical communication, offering low power consumption and low error rates, is emerging as one of the three major short-distance, high-speed intra-rack transmission solutions for scale-up data center networks, alongside active electrical cables (AEC) and VCSEL-based near-packaged optics (VCSEL NPO). 

The high demand for AI datacenter communication solutions, will drive fast growth, and Trendforce projects that microLED co-packaged optics (CPO) will start to scale up in the second half of 2028, and will quickly ramp up to $848 million by 2030. 

MicroLED-based optical interconnects are getting a lot of attention lately, as AI datacenters demands drive innovation and funds into the optical interconnect market.

According to TrendForce, microLED-based optical interconnect solutions are drastically more power efficient compared to copper-base solutions - in fact the overall microLED I/O system power consumption can be reduced to around 5% of the consumption of copper based systems.

Trendforce analysts say that microLED chip revenues is set to grow from around $27.5 million in 2023 to $489.5 million by 2028, driven by adoption of microLED displays in automotive and AR applications.

The industry still suffers from technology challenges and high production costs, which means that demand for microLED displays is weak. Trendforce actually reduced its previous estimation (just a few months ago, it estimated that sales will reach almost $580 million in 2028).

Trendforce estimates that the microLED market is set for fast growth in the near future, as companies continue to invest in large display applications, wearable products (mainly AUO) and AR and automotive applications. Trendforce says that microLED chip sales will increase from around $62 million in 2024 to $580 million by 2028 (a CAGR of 84% from 2023 to 2028).

Trendforce acknowledges that the inability to reduce costs and technical challenges are major factors behind the cancellation of Apple’s Micro LED watch project, and so continuous optimization of production processes remains critical for the development of the Micro LED industry. 

Market Research firm Trendforce predicts that microLED chip sales will reach $27 million in 2023, a growth of almost 100 compared to 2022 ($14 million). Trendforce says that the market is expected to actually accelerate its growth, and grow at a CAGR of 136% from 2022 to 2027, reaching $580 million in 2027. 

Of course not just the LED chip market will grow - the entire ecosystem, including production equipment, backplanes, and more.

Apple has been developing microLED displays for wearable devices for many years, but the company and its production partners are not yet ready to initiate mass production. It was reported before that the company planned to launch the first microLED-powered watch in 2023, but this was delayed several times.

According to a new report by TrendForce, Apple delayed its microLED plans again, now hoping to introduce the first device in 2026. The main problem, as always, is the high production costs.

Market research company TrendForce estimates that the market for microLED chips used in large-area displays will grow from $54 million in 2022 to $4.5 billion in 2026, a CAGR of 204%. The market will continue to grow and by 2030 TrendForce sees revenues of tens of billions of dollars.

There are still obstacles to overcome - technical challenges in both backplane technologies, transfer technologies and driving technologies, and the high cost of the microLED chips themselves.

Market analysts from Trendforce estimate that the market for microLED chips used in the TV market will grow from around $23 million in 2021 to over $3.4 billion by 2025.

Trendforece acknowledges the many challenges facing the display industry before microLED TVs are mass produced - the high cost of microLED chips (most of the cost of current microLED TVs lies in the LEDs). But the large investments by TV brands, the ability to create tiled displays and the high quality and sizes enabled by microLED technology, will all contribute to the market growth in coming years.

Market research company TrendForce says Micro LED displays still face several challenges. Commercialization of LED displays with small pitch sizes, which TrendForce calls "Micro LED-like" displays are expected by 2018.

TrendForce defines Micro LED displays as displays with LED size smaller than 100 microns. There are still several challenges ahead - with a major one being the the mass transfer of micron-size LEDs to a display backplane. Companies are now aiming to commercialize 150 micron displays as early as next year, and then will follow to develop processes to support small LED sizes.