A year ago, in April 2020, STRATACACHE took the industry by surprise when it announced the acquisition of a massive, 1.5 million-square-foot, former Hynix chip factory, with the intent of transforming the facility into the first microLED display volume production in the US (and probably in the world).
STRATACACHE is a leading provider of full suites of digital signage services but came as an outsider on the microLED industry landscape. The company however has a solid track record of implementing disrupting strategies and investments to transform its industry.
As detailed in Yole Développement’s “MicroLED Displays – Intellectual Property Landscape and Analysis 2021” report, entering the microLED industry implies navigating a complex and increasingly crowded intellectual property landscape, full of potential pitfalls but also opportunities to shop around for the best technology bricks. If successful, STRATACACHE could become the first US-based, high-performance display manufacturing hub in decades, serving its own needs and that of other companies.
Yole Développement display analysts Eric Virey and Zine Bouhamri talked with STRATACACHE’s CEO Chris Riegel about the company’s strategy and prospects for microLED displays.
Yole Développement (YD): Most of our readers are probably not familiar with STRATACACHE. Could you introduce yourself and the company?
Chris Riegel (CR): Sure. STRATACACHE is a global Mar-Tech company with 1100 employees in 28 countries around the world driving advanced digital signage, mobile sensors and artificial intelligence solutions in retail, QSR, transportation, gaming and several other key sectors. With over 3 million digital signs driven by STRATACACHE today, you see us all the time as part of the fabric of your daily experience. Order at a McDonald’s digital drive thru, shop at an Adidas store, fly thru hundreds of airports worldwide, purchase a lottery ticket, see an outdoor digital billboard, STRATACACHE drives these and dozens of other experiences you engage with. I founded the company in 1999 and the company is profitable and privately held.
YD: We see STRATACACHE as a service company that often controls the full stack, developing its own hardware, software, and systems. Is this a fair assessment? What are the benefits of this strategy?
CR: Very fair. STRATACACHE is a Marketing Technology Services company. We drive solutions that help our customers better engage the consumer at the point of decision. The benefits of vertical integration focus on not having to engage our competitors in delivering solutions to our customers. In the past 10 years, the big Consumer Electronics giants have become increasingly stagnant in their innovation and aggressive in their competition. With full stack integration, we can drive the value proposition of smarter displays further and faster.
YD: Could you describe your existing activities on the display front?
CR: In an average year, we deploy 750,000+ traditional displays in various digital experiences. We believe we can increase this figure 3 to 5 fold when we can provide what the customer wants rather than what the Consumer Electronics giants want to sell.
YD: In January 2020, STRATACACHE signed a partnership with BOE (China), which is now the single largest LCD panel maker in the world. What is the purpose of this partnership?
CR: As the Chinese have smashed Korean dominance of the industry, it’s logical to have a supply partner with world class product and manufacturing in legacy display. Even with a full MicroLED facility online, there are still significant opportunities on the TFT-LCD front as well as hybrid TFT-MicroLED combinations, so working with BOE on the TFT-LCD side makes sense. The enemy of my enemy as it were.
YD: Do you have other display partners?
CR: Yes. We work with several known companies in Taiwan as well as several Tier 2 players in display enhancement and touch systems.
YD: In April 2020, you acquired a former Hynix chip fab in Eugene, Oregon. Could you briefly describe the facility and the context of this acquisition?
CR: The former Hynix E-4 fab is a 1.5 million square foot facility that was manufacturing memory chips on a 200mm process. When I walked the facility and understood what was there, I immediately knew that a facility like this, in the U.S., in pristine shape, accelerates our project in MicroLED by several years and saves us at least $3B USD in capital investment.
YD; You plan to manufacture microLED displays in this facility. After the Foxconn fiasco in Wisconsin, STRATACACHE might therefore be the first to bring back display manufacturing in the US after more than two decades of dominance by Asian countries. How could microLED enable this major disruption of the established order?
CR: Asian display manufacturing is a cartel, like OPEC. Major companies are directly or majority owned by governments, receive massive subsidy and compete on an uneven playing field. U.S., European and other countries drive tremendous technology innovation across the display sector, but for the past 20+ years, Western Governments, have been blind to the fact that display is a highly strategic industry that directly and indirectly drives over $1 Trillion in total global economic activity across dozens of industries. The disruptive nature of MicroLED is that it has the capability to crack this market wide open for competition, because the capital model for activating a MicroLED Fab is a fraction of that to make a modern Gen10 TFT-LCD or OLED facility. Add to this the ability to build displays in a country that respects Intellectual Property rights and allows you to build cutting edge display without having to hand your business plans and innovation advantage over to your direct competitors (in the consumer electronics space) and you start to realize the strategic value of advancing the MicroLED business model. I’m confident that the business model we build in the U.S. will be duplicated by smart people in India, Germany, France and other countries who understand the economic importance across industries to having native display manufacturing.
YD: What kind of applications are your planning to address with your microLED displays?
Mobile, Wearable, Transparent, Flexible. Principally in the B2B space where the unique attributes of MicroLED drive value above the commoditized TFT-LCD or OLED competition.
YD: Will STRATACACHE use its microLED display production capacity and capabilities exclusively for its own products and applications?
CR: No. Our principal use case of course is for building our own products, but we envision building MicroIC based ‘digital legos’ that can be used as building blocks for third party companies to easily build their own custom displays.
YD: MicroLED is still in its infancy. Complex technological challenges such as LED chip efficiency, mass transfer, display driving, yield management and repair etc, still need to be solved to enable volume production. Most companies are still exploring a multitude of display architecture options and processes to solve those issues. Has STRATACACHE already made its choices for each of those technology nodes? Are you developing your own technology bricks or working with partners to shop for, and acquire licenses for the processes and design choices that you see as the most suitable ones?
CR: I’ve spent a significant amount of my time the past 4+ years absorbing and learning as much as possible about MicroLED. Is the market still early, yes, no question. That being said, in hundreds of discussions across industry with people much smarter than me, I can clearly see that the market is capable of delivering specialty products such as ours and ready for explosive growth near term. In the vast majority of use cases across the stack, the technology is ready to go. Is it perfect, no. Will it compete on low cost with TFT-LCD, no. That being said, via strategic partnerships, joint ventures, licensing and investment, we are highly confident that we can produce market ready products in 2022 for the sectors we target.
YD: Can you elaborate on some of the technical choices that have been made?
CR: We strongly believe in 300mm epi, Smart MicroIC based modules and next generation glass substrates to help us design products that will excel in their solution profiles.
YD: Are you still looking for more partners, either technology providers, or maybe companies that would be willing to share some of the risk with you?
CR: Absolutely. The beauty of not being subject to the Central Planning Mindset and Cartel-Thinking of having to defend an existing investment and process is that we are looking at opportunities totally differently. We can challenge convention and aren’t afraid of failing, learning from that failure and attacking a problem differently. When building from a clean sheet design, all ideas and partnerships are worth review.
YD: What is the timeline for production?
CR: We intend to be in pilot phase Q4 of 2021 and ramping scale production in 2022.
YD: Any other message you would like to share with our readers and the industry?
CR: With MicroLED, we have the opportunity to Make Display Awesome Again. While the Cartel Giants try to convince the consumer that incremental tricks are worthy of their investment, we all know that the display industry has been pretty boring the last several years. MicroLED can once again drive amazement and awe to what can be done and how it will impact all of our lives. Suspend disbelief, give it a chance, and I promise you will be amazed.
Chris Riegel is the founder of STRATACACHE and a serial entrepreneur. Through STRATACACHE and his STRATACACHE Capital group, STRATACACHE has grown to be the leader in Digital Signage and Digital Engagement at Retail over a 21-year span. With 17 startups and acquisitions, and global business interests in 28 countries around the world, Riegel leads a team of 1100 in the pursuit of Advanced Marketing Technology Solutions for world class brand and retail experiences.
Eric Virey, PhD, serves as a Principal Display Market and Technologies Analyst within the Photonics, Sensing & Display division at Yole Développement (Yole).
Eric has spoken in more than 50 industry conferences over the last 10 years and has been interviewed or quoted in multiple media including: The Wall Street Journal, CNN, Fox News, CNBC, Bloomberg, Financial Review, Forbes, Technology Review, etc.
Prior to joining Yole, Eric held R&D, engineering, manufacturing and marketing positions with Fortune 500 Company Saint-Gobain in France and the United States. Eric received a PhD in Optoelectronics from the National Polytechnic Institute of Grenoble. He is based in Portland, OR.
As a Technology & Market Analyst, Displays, Zine Bouhamri, PhD is a member of the Photonics, Sensing & Display division at Yole Développement (Yole).
Zine manages the day to day production of technology & market reports, as well as custom consulting projects. He is also deeply involved in the business development of the Displays unit activities at Yole.
Previously, Zine was in charge of numerous R&D programs at Aledia. During more than three years, he developed strong technical expertise as well as a detailed understanding of the display industry.
Zine is author and co-author of several papers and patents.
Zine Bouhamri holds an Electronics Engineering Degree from the National Polytechnic Institute of Grenoble (France), one from the Politecnico di Torino (Italy), and a Ph.D. in RF & Optoelectronics from Grenoble University (France).
MicroLED Displays – Intellectual Property Landscape and Analysis 2021
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