OLED Archives - Counterpoint

Share of OLED Smartphones at Record High

OLED smartphones share reached 49% in Q1 2023.
iPhones switching to OLED was the inflection point for the tech adoption.
5G penetration in lower price bands limited OLED adoption and slowed the growth rate.

The share of OLED display smartphones in global smartphone sales reached a record high of 49% in Q1 2023, up from 29% in Q1 2020, according to Counterpoint Research’s Global Handset Model Sales Tracker, published in March 2023.

The screen or display has been one of the main factors influencing consumers to purchase a smartphone. OLED display provides a better viewing experience than LCD in several aspects by offering better viewing angles, deeper blacks and increased battery life along with other features. Brands also pushed OLED displays as a differentiating factor due to the leaner and more flexible panels that allow slimmer phones with curved displays in mid-priced and premium segments. Notably, the share of OLED displays in the above $250 wholesale price band reached 94% in Q1 2023.

The launch of the iPhone 12 with OLED display was the inflection point for OLED adoption in smartphones. All iPhones launched since, apart from the SE versions, have been equipped with OLED panels and the adoption of this display technology has increased with each iteration of the device.

In Q1 2023, almost half of all smartphones sold had OLED displays. The rate of adoption reached its highest ever mark in February 2023. However, beyond that the growth rate plateaued due to the following reasons:

5G smartphones penetration has been consistently increasing. Over half of the smartphones sold in Q1 2023 were 5G capable. A push to bring 5G to lower price bands, especially in emerging markets, is a key driving factor for this growth. However, adding 5G also meant increasing BoM costs. Due to increasing costs, certain OEMs have used LCD displays to optimize BoM costs for 5G smartphones, especially in the lower price bands. Close to half of the 5G smartphones sold globally were from the sub-$400 wholesale price band, of which 50% had LCD displays. Meanwhile, in the over $400 band, the share of 5G phones with LCD displays was just 1% in Q1 2023.
Although 5G is advancing, LTE still accounted for over 40% of the total market with a higher presence in price-sensitive developing economies. The use of OLED displays in LTE smartphones has almost halved over the past three years as iPhones, which use OLED, have shifted to 5G, leaving the LTE market mostly to Android devices, which mostly use LCD. The best-selling LTE devices are all entry-level Android smartphones that are mostly equipped with LCD displays. This has played a major role in dampening OLED demand.

Among OEMs, Samsung has been consistently lowering its use of OLED over the years, reaching 41% in Q1 2023, its lowest level in the past three years. This was due to the rise in popularity of Samsung’s LCD-equipped A series smartphones in the entry-level segment. Among major Chinese smartphone players, only Xiaomi increased its OLED adoption, rising to 51% in Q1 2023 from just 18% in Q1 2021, helped by its popular Redmi Note series smartphones with OLED panels. OPPO’s employment of OLED displays decreased slightly YoY during the quarter while that of vivo remained flat. Devices with LCD panels accounted for more than 60% of their sales in Q1 2023. Meanwhile, realme, in its endeavor to deliver 5G smartphones at lower prices, opted for LCDs over OLEDs, thus lowering its OLED adoption to 36% in Q1 2023 from 45% in Q1 2021.

Going forward, smartphones will increasingly adopt OLED, which will cross the 50% mark driven primarily by the launch of new iPhones. Increasing popularity of foldable smartphones, which are all equipped with flexible OLED displays, will also be a contributing factor.

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Harshit Rastogi

Climate Change Concerns Aid LG Electronics’ Q1 Numbers

The revenue for Q1 2023 stood at KRW 16.26 trillion, a 5.7% YoY decline.
The operating profit of the company declined by 15% YoY.
The revenue from the vehicle solutions segment grew 27% YoY to reach KRW 2.4 trillion.

LG Electronics has generated relatively steady Q1 2023 earnings results thanks to the stabilization of material costs and the continued sales of high-end home appliances. The heat pumps and energy storage devices helped it earn more as the climate change restrictions tightened.

The company’s revenue declined 5.7% YoY in Q1 2023 to KRW 16.26 trillion ($12.75 billion), while the operating profit declined 15% YoY to KRW 1.36 trillion ($1.06 billion) owing to sluggish global demand. Although the profit dropped YoY, it was a considerable improvement over the losses in the previous quarter.

The business portfolio is experiencing growth through qualitative measures, particularly in expanding B2B segments such as vehicle components and system air conditioners. Besides, non-hardware business revenue continues to increase. The vehicle component solutions segment raked in high profits, contributing almost 15% to the total revenue, up from 11% in Q1 2022.

Financial highlights

The consumer electronics segment’s revenue fell 5.5% YoY to reach KRW 11.38 trillion ($8.9 billion). However, the operating profit increased by 92% owing to lower logistics costs, efficient management of raw material supply, improved spending efficiency and active measures to enhance cost structure. The contribution of this segment to LG’s Q1 operating profit rose to 89.7% from 40% in Q1 2022.
The revenue of the vehicle solutions segment grew 27.1% YoY to reach KRW 2.39 trillion ($1.87 billion) driven by high order backlogs and the electric vehicle (EV) boom in the automotive market. Supply chain management improvements for key components, like semiconductors, played a crucial role. The operating profit grew to KRW 54 billion ($42.3 million), compared to the loss of KRW 6.7 billion ($5.6 million) in Q1 2022. Although the segment contributed just 4% to LG’s Q1 operating profit, it is touted as the future growth driver.
Revenue from other businesses, which include business solutions, kept declining YoY to reach KRW5 trillion ($1.95 billion), falling 25%. The operating profit dropped 91% YoY to KRW 85 billion ($66.7 million). The segment’s contribution to LG’s Q1 operating profit was only 6.3% compared to 61% in Q1 2022.
LG Innotek’s revenue grew 10.7% YoY to KRW 4.4 trillion ($3.43 billion). The operating profit decreased by 60.4% to KRW 145 billion ($114 million). This brought LG’s consolidated revenue to KRW 20.4 trillion ($16.01 billion).

Market outlook

Amid declining consumption due to economic downturn concerns, consumer electronics revenue is expected to fall while profits will remain sluggish in the next quarter. The decreasing IT demand will also have negative impacts on yields. The huge order backlog (KRW 80 trillion) and the ongoing transition to EVs will drive the vehicle solutions segment revenue. Based on the high growth within EV markets, it is expected that the EV component business will continue to take up a larger share in the future. A reliable portfolio of in-car infotainment systems, e-powertrain, headlights and unique solutions will maintain LG’s competitive advantage.

LG Electronics is going aggressive on increasing its technological advantage over competitors. This year, the company plans to invest over KRW 5 trillion ($4 billion) in its most significant capital expenditure in 10 years, mainly in the automotive electronics business. This move aligns with the business strategy of focusing on long-term growth and prosperity. The R&D spending has also been increased by 10% this year. LG wants to sustain growth and ensure consistent profitability by proactively and adaptively addressing shifts in demand across various regions and segments. It also aims to expand eco-friendly enterprises in pursuit of revenue growth through energy-efficient and environment-friendly products.

*LG Innotek’s numbers are not included in the total revenue and have been mentioned separately.

Related reports

LG Electronics Operating Profit Stumbles in Q4 2022

The operating profit of LG Electronics* declined by 133% YoY in Q4 2022.
The revenue for Q4 2022 stood at KRW 15.47 trillion, a 1.6% growth YoY.
The revenue from the vehicle solutions segment grew 44.6% YoY to reach KRW 2.4 trillion.

LG Electronics’* total revenue in Q4 2022 was KRW 15.47 trillion ($11.37 billion), a mere 1.6% YoY growth. This brought the company’s 2022 total revenue to KRW 64.71 trillion ($50.3 billion). Although LG registered a positive YoY revenue growth during Q4 2022, the operating profit declined by 133% YoY, causing losses of KRW 104 billion ($76.6 million). This was primarily due to increased marketing expenditure, increased raw material prices, and currency devaluation compared to the US dollar. The business was also impacted by the extension of geopolitical risks in Europe and interest rate hikes in many nations to reduce inflation. The worsening macroeconomic conditions weakened consumer sentiment, leading to a decline in consumer electronics sales. The vehicle solutions segment stood as a bright spot due to strong demand and order backlog from auto OEMs.

Financial highlights

The consumer electronics segment’s revenue fell 5.5% YoY to reach KRW 10.88 trillion ($8 billion). Its operating profit decreased by 127% due to rising marketing costs and fixed cost burdens. The contribution of this segment to LG’s Q4 revenue declined to 70.2% from 75.5% in Q4 2021.
Revenue from the vehicle solutions segment grew 44.6% YoY to reach an all-time high of KRW 2.4 trillion ($1.76 billion). This was primarily due to increased OEM orders and an improved automotive supply chain situation globally. Negative external factors like logistics costs and raw material supply chain are easing. Despite increasing expenses associated with running additional manufacturing subsidiaries, profits improved on increased sales. Vehicle solutions accounted for 15.5% of the total revenue in Q4 2022.
At the end of 2022, the vehicle solutions segment had a backlog amounting to KRW 80 trillion ($59 billion), underscoring the company’s position as a key supplier to the global auto industry. Infotainment accounted for more than 60% of the backlog value, xEV parts for 20%, and safety and convenience components for the rest.
Revenue from other businesses grew by 6.7% YoY in Q4 2022 to reach KRW 2.2 trillion ($1.62 billion). But low demand for IT products and global economic headwinds sent the operating profit down by 195% YoY.
LG Innotek’s revenue grew 14.4% YoY in Q4 2022 to KRW 6.5 trillion ($4.8 billion). The operating profit decreased by 60.5% to KRW 169 billion ($124 million). This brought LG’s consolidated revenue to KRW 21.8 trillion ($16.06 billion).

Market outlook

The anticipation of growing inflation, geopolitical uncertainties, mass layoffs and significant concerns about the economy weakening during the initial months of 2023 is likely to further impact LG’s profit in Q1 2023. LG aims to increase profitability by proactively cutting expenses and optimizing cost structures. LG stated that it would continue to improve the competitiveness of its premium goods like OLED TVs. Despite challenging financial conditions, LG is likely to invest around KRW 22 trillion this year in developing new sectors and broadening its business portfolio.

The vehicle solutions segment has the highest potential to earn high profits in coming quarters owing to a robust strategy to secure long-term product orders and the current order backlogs, despite uncertainties around vehicle demand in 2023. Besides, due to the high demand for infotainment and xEV components, this segment is likely to grow further, leading to a higher share of LG’s revenue.

*LG Innotek’s numbers are not included in the total revenue and have been mentioned separately.

Pandemic Pushes OLED Tablet Popularity, Jump in Penetration Expected in 2024

Samsung started making OLED tablets as early as 2014, but most of its competitors remained unconvinced about using OLED.
COVID-19 led to tablet displays coming under focus, bringing back OLEDs in contention.
Falling manufacturing costs and the introduction of new technologies are set to make OLEDs an attractive option.
Many OEMs have started using OLED display panels in their newest high-end devices.
Significant developments in OLED penetration will have to wait till 2024 when tandem OLEDs’ mass production is expected to start.

Unlike the mass adoption of OLED panels that has happened in other devices, the use of OLED in tablets has only been pursued by a handful of OEMs so far. Samsung, one of the earliest adopters of OLED in tablets, started in 2014 but the shift proved ineffective in convincing its competitors to adopt the same. However, with the start of the COVID-19 pandemic and its role in increasing the importance of multimedia, tablet displays have progressively gained prominence. The market, which still predominantly consists of LCD panels, is starting to show all the necessary prerequisites for the expanded adoption of OLED in the tablet industry.

Prominent 2022 OLED Tablet Launches

Source: Samsung, Asus, Huawei, Lenovo

The biggest technological difference between OLED and LCD displays relates to how the pixels are illuminated. LCDs rely on an LED backlight for illumination while OLEDs provide individual pixel illumination to offer better color contrasts and viewing angles. These advantages, however, do not come without their costs. Two distinct factors have hindered OLED adoption in the past. First, and most important, is the large cost disparity between OLED and LCD panels. OLED panels are considerably more difficult to produce and are yet to reach the manufacturing scale of LCDs, leading to a higher cost per unit. Second is the reliability of OLEDs, as burn-in and pixel wear are more prevalent compared to LCDs, making them less suitable for the longer lifespan of tablets. These two issues, however, are likely to be resolved in the near future with falling manufacturing costs and the introduction of new technologies, like the two-stack tandem OLED structure which provides 4x durability and 2x brightness when compared to existing OLED displays. Leading display manufacturers have already started increasing their OLED production capacities. LG Display is doubling its output by increasing the capacities at the Paju and Guangzhou plants. This will ultimately lead to a reduction in the per-unit cost of OLED panels.

Global Tablet Market Share by Display Type

Source: Counterpoint Global Tablet Market Tracker

Global Tablet OLED Market Share by Brand

Source: Counterpoint Global Tablet Market Tracker

Tablets with OLED displays consisted of around 8% of the global tablet market’s shipments in Q3 2022 and are likely to grow incrementally with every quarter, reaching an estimated 15% in Q2 2024. Although OLED adoption rates showed only modest growth in the previous year, OEMs have started using OLED display panels in their newest high-end devices. Due to the gradual diversification of model lineups, market leader Samsung dropped by 11% points YoY in Q3 2022, while Lenovo and Huawei gained 8% and 3% points respectively. OEMs like Lenovo are expected to further increase their OLED tablet market share with newer models slated to release in mid-2023.

Despite the increasing OLED tablet launches from leading OEMs, significant developments in OLED penetration will likely remain dormant in 2023 due to the likelihood of OLED displays remaining costly. Mass production of tandem OLEDs is slated to begin in 2024 with LG Display expected to start production as early as Q1 2024. Apple, the market mover in the tablet industry, is also predicted to announce OLED iPads in a similar time frame and expected to take a considerable market share of 21% in Q2 2024. With Apple’s adoption of OLED tablets, other OEMs will likely follow suit, accelerating the shift to OLED displays as the new tablet standard.

OLED Adoption by Smartphones to Slow Down in 2022

LCD, which once used to dominate smartphone displays, is now gradually giving way to OLED. Widely recognized as a more advanced display, OLED has steadily increased its share in the small panel market for the past several years. However, in 2022, the pace of OLED’s growth is likely to slow down. According to Counterpoint Research’s Smartphone Sales Forecast by Display Type, the share of OLED in smartphone display types globally is expected to increase only by 2% points YoY in 2022 to 44%. It had risen by 10% points YoY in 2021 to 42%.

This slowdown in OLED penetration is directly connected to the downward pressure on the average selling price (ASP) of 5G smartphones. Although prices of key components such as chipsets are rising due to supply shortages, OEMs have been forced to lower the shipping prices of finished products due to intensifying competition in the market and stagnation in consumption caused by the ongoing global economic slowdown. Therefore, manufacturers desperately looking to cut costs appear to be compromising on the display. According to Counterpoint’s Handset Model Tracker, the OLED adoption rate for 5G smartphones in Q4 2021 was 80%, a YoY decrease of 2% points. This is particularly noteworthy considering that 5G models have mainly driven the expansion of OLED adoption so far.

The recent demand-supply and price trends of OLED panels themselves have also become obstacles. OLED is divided into relatively inexpensive ‘rigid OLED’ and high-end ‘flexible OLED’ that has increased flexibility and strength. In the low-end to mid-end smartphones, the panel that can directly replace LCD is rigid OLED, but its global supply has now reached its limit. This is because display makers are focusing their investments on flexible OLEDs instead of the low-margin rigid OLEDs. On the other hand, the price of flexible OLED, which is preferred for premium models, dropped so much around 2020 that its adoption rate soared. Recently, however, even this downward trend in prices has come to a standstill.

Still, from a long-term perspective, the trend of OLEDs taking the place of LCDs in smartphones does not seem to change. This is closely related to the 5G market growth. Since 5G phones consume battery faster than LTE phones, OLEDs are preferred for them as they are more power-efficient than LCDs under normal conditions. Comparing smartphones sold during Q4 2021 by network type, the adoption ratio for LCD and OLED panels in LTE smartphones was 82:18, but for 5G smartphones, the ratio was 20:80.

In conclusion, the shift to OLEDs in smartphones will continue in the long term, but its pace will depend on various factors — recovery of the consumer economy, supply stabilization of key parts and reduction of flexible OLED prices. As the above conditions are unlikely to be met in 2022, it will be difficult for many smartphone manufacturers to aggressively expand OLED adoption in the near term.

Top 10 Automotive Announcements in CES 2021

Like the past few years, automotive players used the 2021 edition of the Consumer Electronics Show (CES), organized from January 11 to 14, to showcase new technologies, launch products and announce partnerships. This year’s CES, which went all-digital due to the COVID-19 pandemic, was majorly focussed on electric vehicles (EVs), 5G connectivity, digital cockpit, artificial intelligence (AI) and autonomous vehicles (AVs). Moreover, COVID-19 has failed to dent the OEMs’ (original equipment manufacturers’) plans.

Here are Counterpoint analysts’ top 10 automotive announcements from this year’s CES:

1. Mercedes-Benz unveils a 56-inch ‘Hyperscreen’

As the cars are becoming smart, the need for a bigger screen is increasing for communicating and checking all the real-time vehicle data. Moreover, this 56-inch OLED Hyperscreen provides various functions like infotainment and personalized display. The screen is supported by eight CPU cores, 24GB RAM and 46.4GB/sec RAM bandwidth which helps reduce screen response times. In the era of the digital cockpit, MBUX (Mercedes-Benz User Experience) will slowly become the backbone of Mercedes-Benz vehicles, making the car more intelligent.

2. GM reveals an ambitious EV plan and a flying car concept

With the concept of flying Cadillac eVTOL, GM has joined the race for capturing the flying car market with other automakers like Hyundai, Toyota and FCA Group. Flying car testing projects have just started around the world and we will have to wait till after 2025 to get a good perspective on the topic.

GM launched BrightDrop, a new business unit for commercial EVs, aiming to build a first-to-last-mile EV ecosystem for logistics companies. This concept is not new, but there is huge potential for this market. GM may face stiff competition from other players working in this segment, like BYD, Rivian and Workhorse Group.

After a poor performance in the past few years, GM is repositioning itself and just changed its logo to reflect its EV focus. The company is spending $27 billion on EVs and AVs, targeting to launch 30 EV models by 2025. GM is also working on a battery technology called Ultium. These moves show GM’s seriousness towards its electrification goal and signal its strong comeback in the automotive market.

3. Panasonic unveils augmented reality (AR)-based heads-up display (HUD)

Panasonic unveiled an AR-based HUD which utilizes PRISM (positioning, reflection, intuitive, zonal UX and mission control) process to provide accurate situational awareness. A 3D imaging radar captures full 180° forward vision up to 90 metres while the 4K resolution provides a crystal-clear video of highways. Eye-tracking technology and AI-driven positioning accuracy are the key features of this HUD, which is expected to enter the market in 2024.

4. Mobileye showcases plan for AV rollout

As a part of its plan to commercialize AVs, Intel subsidiary Mobileye is expanding its testing of AV fleets to Shanghai, Paris, Tokyo and New York (pending regulatory approval) after a successful run in Tel Aviv, Munich and Detroit. Mobileye is also working on new Lidar silicon chips (SoC), which are expected to enter the market by 2025. This SoC can simplify computing and reduce cost by a significant amount.

5. Here Technologies brings a new mapping-as-a-service offering and 3D city models for vehicles

Here Technologies introduced a unique mapping-as-a-service offering where enterprises will be able to create their own maps. EV players can personalize their route maps through this service to reduce the range anxiety problem among stakeholders.

Here also launched 3D city models for vehicles while announcing a partnership with Leia and Continental to bring cutting-edge experience to automotive players. 3D maps with AR/VR applications will increase accuracy in location mapping, will be more engaging and help in taking better decisions while driving.

6. Harman redefines in-car experience in the 5G era

Harman is aiming to put a gaming console, a recording studio, or even a concert hall experience into the vehicle to provide the best user experience. High-resolution OLED or QLED displays, 5G enabled TCU and TBOT, Harman’s audio technology and advanced haptics will come together to give the user an immersive experience.

Harman is also offering a creator studio experience inside a car. Automatic background noise cancellation, virtual assistant, user-friendly video set-up, interactive lighting and publishing tools are leveraged here to create content even while driving.

With the help of 5G, premium audio quality, cloud service and partnerships with concert organisers, Harman is bringing live concerts to the car. More partnerships are expected with content creators, service providers, app developers, OEMs and module players to improve the experience.

7. Gentex reveals full display rearview smart mirror

Gentex demonstrated an LCD-based industry-leading Full Display Mirror (FDM) with the bimodal functionality of acting as a mirror and display. FDM is a rearview mirror which can capture surroundings with better angle and stream on display. It can be easily integrated with a camera monitoring system (CMS). In the smart mirror mode, it can record video, which helps in avoiding accidents and in finding the reason for an accident in case it happens. FDM is still a key feature for premium vehicles. However, with the rising awareness of advanced driver-assistance systems (ADAS), we will witness more penetration of FDM into mid-priced vehicles.

Gentex also exhibited a dimmable glass system, HomeLink car connectivity, Integrated Toll Module (ITM), an in-cabin sensing unit, and a smart lighting system. HomeLink is an embedded connectivity solution for vehicles which can perform functions like door lock, garage door opening, security, smart outlets, smart lighting and appliances. A vehicle integrated ITM helps users manage toll bills through a single solution, thus reducing traffic and improving efficiency in toll management. It has already entered partnerships with automakers and technology service providers for creating innovative solutions for customers. Gentex, one of the leading connectivity providers to automakers, is trying to bring a new concept to the digital cockpit and the coming autonomous age.

8. NXP announces BlueBox 3.0 AHPC development platform

NXP announced a new BlueBox 3.0 Automotive High-Performance Compute (AHPC) development platform which supports Level 2+ autonomous driving. NXP’s Layerscape LX2160A processor helps improve processing performance two times the previous generation of the platform while the S32G processor provides secured vehicle networking. As automakers will incrementally reach the full AV stage, this platform will help find near-term applications in Level 2+ and Level 3 automated vehicles. Since this platform is flexible and scalable, it can be updated with rising levels of autonomy.

9. Magna firms up EV and AV plan with a series of strategic pacts

Magna launched the LED-based Mezzo Panel for the Fisker ADAS panel. Mezzo Panel is a micro-LED and sensor-based polycarbonate panel which can be integrated into a vehicle body without affecting body aesthetics. Magna is also working on the Magna Vision Panel which is set to be showcased at the 2022 CES. Magna and Fisker are collaborating on building unique ADAS features and EV-sharing platforms.

LG Electronics and Magna have created a joint venture to concentrate on the electric powertrain market. In the CES last year, Sony surprised us by unveiling an EV prototype, Vision-S. In this year’s CES, Sony showed new videos of the Vision-S. Magna is one of the major partners for the Vision-S.

10. John Deere showcases VR technology for tractors

John Deere highlighted seed planting with the help of virtual reality (VR), AI and a camera system. A VR-based tractor will help improve precision during planting and work seamlessly in different environments. With the rising applications of 5G and IoT in the agricultural field, John Deere is attending the CES for the past few years. Besides showcasing major products and services in the passenger and commercial vehicle segments, the CES is also becoming a stage for unveiling products for small segments of the automotive industry, like farm equipment.

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Pixelworks Iris 5: A Tiny Chip That Brings Premium Visual Experiences to Affordable Smartphones

As smartphones become an important part of our daily lives, the environment has got highly competitive as it is driven by a handful of brands with access to the same supply chain. This makes it difficult for smartphone makers to differentiate their devices from others. As a result, they are segmenting their portfolio by having different sub-brands, focusing on unique features for a particular segment.

Some OEMs operating on a thin hardware margin business model are trying to recoup the revenues from the ecosystem. This puts pressure on other brands to differentiate and add new features while keeping the Bill of Material (BoM) cost pressure in check. Smartphone makers are trying to innovate by adding multiple chips and software algorithms to enhance the overall user experience and save on BoM costs. Some brands are using innovative solutions from companies like Pixelworks to bring premium visual experiences to differentiate their affordable smartphones.

How Pixelworks is Helping OEMs Offer Better Display Solutions

According to Counterpoint Research (report) studying user behavior patterns, users spend more than five hours a day on their smartphones. The usage varies from surfing the internet to playing games.

Meanwhile, another report highlights that the consumption of video content from OTT streaming platforms is on a rise. Keeping the usage pattern and behavior in mind, OEMs are now focusing on improving the viewing experience on smartphones. Video is becoming an important medium from streaming, and communications point of view to short-form video platforms such as TikTok.

As video has become the key content consumed, OEMs are looking to add advanced displays for enhanced viewing and judder-free experience. But as we discussed earlier, the cost of adding these features is significant, and every dollar saved is important for brands in this cut-throat competitive landscape. Companies like Pixelworks with its long heritage in display and video processing for over two decades are offering solutions to drive BoM cost efficiencies and savings while enhancing the user experiences.

Pixelworks portfolio offers a couple of solutions – its “Iris 5” hardware chipset and a software-based “Soft Iris“ solution. The Pixelworks Iris 5 is a tiny low-power visual co-processor for image and video processing to enhance the smartphone display experience. Using this solution, OEMs can unlock a whole gamut of features from color accuracy, smooth and natural motion for high refresh displays, contrast and sharpness enhancements to SDR-to-HDR upscaling alongside a less expensive mid-tier SoC. The solution thus helps OEM offer visually perceptive experience while saving on the BoM costs.

Pixelworks Iris Visual Co-Processor Chip

Iris is Pixelworks fifth-generation visual co-processor, that sits between the SoC and the display driver IC. It supports displays with up to WQHD+ resolution, and up to 120Hz refresh rate. The Iris chip is currently optimized to work with Qualcomm Snapdragon SoCs and OEMs can leverage the power of this chip for Qualcomm powered smartphones.

Source – Pixelworks

The latest generation Iris 5 key capabilities include:

For local videos, movies or live-streaming, Iris 5 with dual MIPI offers a smart MotionEngine that can detect and compensate for frame rate mismatch to offer blur-free content in real-time while processing the graphical and video layers separately. This also enhances gaming experiences with smooth, judder-free viewing.
HDR10 is mostly supported in premium devices, but with Iris 5 which supports native 10-bit processing can offer certified HDR10 and HDR10+ playback with most accurate tone mapping for mid-tier budget devices. For all other content, an Always-on HDR experience, converts standard video or game SDR (16 million color shades) content to HDR (one billion color shades) in real-time for a richer, more immersive viewing.
Iris 5’s Auto Adaptive Display capability adjusts the light, tone, and temperature based on different scenarios. For instance, in bright outdoor conditions, the brightness and contrast will be enhanced for ease of viewing. Similarly, at night or in ambient lighting conditions, the screen brightness will be dimmed dynamically while also reducing blue light to ease the strain on your eyes.

OEMs can also integrate a cheaper Iris 3 chipset for mid-tier chipsets for devices upto 90Hz Display with Single MIPI spec and capabilities such as SDR to HDR, HDR 10, TrueView™ Auto Adaptive, picture quality and color tuning, management and so forth.

Pixelworks Soft Iris Software Solution

Pixelworks also offers a Soft Iris software that can be embedded right into Qualcomm 800-tier premium SoCs as a complementary solution to leverage the advanced display pipelines. Embedding Soft Iris and OEM can offer more accurate color calibration, custom tone, sharpness tuning, Auto Adaptive Display capability and certified cinematic-grade HDR10 & above experience. Soft Iris is, for example, used in Asus ROG Phone II to optimize the display for a superior lag-free gaming experience.

Source – Pixelworks

Pixelworks is adopting an ecosystem approach to enhance content on the device and also in the cloud. For example: Pixelworks partnered with China’s leading video content platform YouKu to bring high-quality HDR video to a large ecosystem of mobile devices in China. YouKu is using Pixelworks’ TrueCut® platform to enhance its existing and upcoming content to HDR quality for its half a billion active smartphone user base.

Smartphones with Pixelworks Inside

Number of OEMs are adopting Pixelworks solution to bring advanced viewing experiences to their mid-tier Qualcomm powered devices as well as to further enhance some of the premium Snapdragon-powered devices as well. The Asus Zenfone 3 Deluxe was one of the first smartphones to come with Pixelworks solutions. However, the turning point was the Nokia 7.1 that launched in 2019, followed by smartphones like the Nokia 7.2, Nokia 6.2 and the latest Nokia 8.3 5G, Asus ROG Phone and ROG Phone 2, BlackShark-series gaming smartphones and ZTE Axon 9 Pro. The recently launched Oppo Find X2 and Find X2 Pro also comes with a high refresh rate display, and Pixelworks Iris 5 chip.

Source: Counterpoint Research Component Tracker

These smartphones range between $200 – $1,300 segment, with different use-cases. For instance, the ROG Phone-series and BlackShark-series are gaming-centric smartphones. The focus on these phones is to improve the screen refresh rate and improving the dynamic range for a better visual experience. Similarly, on mid-range smartphones like Nokia 7.2, Nokia 6.2, and the latest Nokia 8.3 5G, the chipset improves image and video viewing experience with HDR capabilities, display lighting management for devices sporting LCD displays.

With the dawn of the 5G era, supporting high-resolution, immersive and low-latency video, cloud gaming and Augmented Reality experiences are going to be the key differentiators. Solutions such as Pixelworks will help will assist OEMs to offer these experiences even at affordable price points.

Co-Processor Trends in Smartphones on the Rise

Recently, we saw the launch of some mid-range smartphones in sub-$250 featuring LCD displays with a 120Hz screen refresh rate. Brands are under immense-pressure in the next few years to offer budget 5G smartphones with flagship hardware under $550, and solutions such as Pixelworks will help them get closer to where they need to be.

Commenting on the importance of this approach, Counterpoint’s Component Practice’s Research Analyst, Shobhit Srivastava, said, “Delivering premium quality content (HDR, 4K, 8K) experiences on a smartphone warrant a flagship-grade application processor paired with OLED displays, which increases the cost of the device. However, OEMs looking to differentiate and deliver enhanced video or display experiences using mid-range application processors can benefit from Pixelworks’ Iris co-processor solution. This companion solution can allow OEMs to save anywhere between 5% to 15% of the overall BoM cost. And smartphones sporting economical OLED and SoC, these savings can be further optimized.”

While the Pixelworks solution will help unlock a premium visual experience, we may see a similar approach from OEMs to trickle down advance features on affordable smartphones. The trend to add DSP-centric advanced co-processors will be on the rise from enhancing the audio experience (Hi-Fi lossless audio) to companion AI chip (for multiple use-cases – biometrics, graphics, etc) to a dedicated camera ISP to drive advanced imaging and photography features to affordable phones.

Another Strong Quarter for Android’s No.1 Fingerprint Solution Provider – Shenzhen Goodix Technology

Shenzhen Goodix Technology Co., Ltd. (SH: 603160), which mainly manufactures fingerprint identification chips and capacitive touch controller chips, has become one of the best investments in the semiconductor sector of the year in China. The Company was founded in 2002 in Shenzhen and was listed in 2006. The company saw its share price jumped 160% this year and its market cap has hit more than RMB 100bn (roughly USD 14bn) at its peak. (78.2 at the end of Dec)

Chinese companies have mainly been followers in the semiconductor industry while Goodix with its strong R&D capabilities has become Android’s No.1 fingerprint solution provider. In fact, Goodix’s path to become one of the leading semiconductor companies in China has not all been smooth sailing. Goodix’s earnings saw a big drop in 2018 when Apple decided to switch to facial recognition for its iPhone X. However, the wide adoption of Goodix’s under-display fingerprint sensor (UD FPS) across all major OEMs in China since the second half of 2018 led to a strong rebound for Goodix. The company’s revenue for the first three quarters of 2019 reached RMB 4.68 bn (roughly USD 0.67bn), increasing 97.8% YoY. Its net profit for the three quarters combined also reached RMB 1.71bn (roughly USD 0.24bn), increasing 437.2% YoY. More than 98 smartphone models have adopted Goodix’s UD FPS solution.

There are a few reasons behind Goodix’s success. First of all, the trend to increase display size and make the bezels as small as possible for smartphones calls on new solutions for biometric recognition that do not take up space in the bezels. The traditional capacitive FPS can no longer be used under the display due to poor depth sensing. Among a limited number of solutions, Goodix’s optical UD FPS solution best meets these criteria.

Secondly, optical UD FPS technology relies on capturing on optical image of the fingerprint which requires OLED as the light source. Based on Counterpoint’s data, the use of OLED has been steadily increasing in mid-to-high end smartphones, and OLED penetration is expected to surpass 40% in 2020. The increased penetration of OLED screens further helped to drive the adoption of optical UD FPS.

We continue to hold a positive outlook for Goodix in 2020 given Goodix’s strong R&D capabilities and new product pipeline. In December 2019, Goodix kicked-off the commercialization of the ultra-thin optical UD FPS in the OnePlus 7T Pro 5G McLaren, released in the US. The upgraded ultra-thin FPS is especially useful for 5G smartphones where the FPS module size needs to be as small as possible to fit in more complex deigns and antennas. In addition, Goodix is actively exploring UD FPS in LCD screens and its commercialization will further drive volume growth.

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Another Strong Quarter for Android’s No.1 Fingerprint Solution Provider – Shenzhen Goodix Technology

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