West China Securities: Apple's entry may accelerate the volume of foldable screens, optimistic about core incremental segments and new processes

According to the research report released by Huaxi Securities, based on TrendForce data, the global shipment of foldable smartphones is expected to reach 17.8 million units in 2024, with a projected growth to 70 million units by 2027, resulting in a compound annual growth rate (CAGR) of 57.8% from 2024 to 2027. Apple (AAPL.US) is expected to launch a foldable iPhone in 2026, which is likely to accelerate the growth of foldable smartphones. Additionally, Apple's entry into the foldable screen market is expected to lead to innovative upgrades in the foldable screen industry chain. The firm is optimistic about the core incremental segments such as foldable screen UTG cover plates, hinges, and new technologies like liquid metal and 3D printing. The main viewpoints of Huaxi Securities are as follows: Apple's entry into foldable screen products accelerates industry development As traditional smartphones enter a mature market phase, foldable screens define a new form of smartphones. According to TrendForce data, the global shipment of foldable smartphones is expected to reach 17.8 million units in 2024, with a projected growth to 70 million units by 2027, resulting in a CAGR of 57.8% from 2024 to 2027. According to IT Home, Apple is expected to launch a foldable iPhone in 2026, which is likely to accelerate the growth of foldable smartphones. Incremental Segment 1: Hinges Hinges are the core components of foldable smartphones, responsible for supporting and guiding the opening and closing of the screen. Although small in size, hinges have a complex structure, containing hundreds of components, and must meet a lifespan of over 200,000 openings and closings, requiring extremely high standards for strength, precision, and wear resistance. Meanwhile, under the trend of lightweight and thin design for foldable screens, hinge designs must ensure smooth opening and closing while being lightweight and durable, effectively improving issues like creasing. Therefore, major manufacturers are actively iterating products and comprehensively upgrading the structure, materials, and processes of hinges. In terms of form, foldable screen hinges are mainly divided into two types: droplet and U-shaped. Among them, droplet hinges have relatively shallower creases and can effectively reduce screen wear. Huawei, OPPO, Xiaomi, and vivo have all adopted droplet hinges for their foldable screens. In terms of manufacturing processes, foldable screen hinges primarily use MIM technology. At the same time, to further reduce creases and achieve lightweight foldable screens, hinges are expected to incorporate innovative materials and processes such as liquid metal and titanium alloy 3D printing. Incremental Segment 2: Cover Plates Flexible cover plates are key components of foldable screens, requiring transparency, foldability, and good recoverability. In terms of materials, the two commonly used materials for foldable screen flexible cover plates are transparent polyimide (CPI) and ultra-thin flexible glass (UTG). Compared to CPI, UTG offers better light transmission, higher hardness, scratch resistance, better tactile feel, and better elasticity, making UTG gradually replace CPI as the mainstream material for foldable screen flexible cover plates in the market. According to CINNOResearch data, the usage proportion of UTG in domestic foldable smartphones increased to 70% in 2023 and continues to show an upward trend. Additionally, non-uniform thickness ultra-thin glass (UFG), as a special type of UTG glass, is expected to become the next generation mainstream solution In terms of manufacturing processes, the production of UTG is divided into primary forming method and secondary forming method. Among them, the primary forming method has a higher technical barrier and is mainly mastered by several large foreign display glass manufacturers. The manufacturing processes mainly include overflow pulling method, narrow gap pulling method, and float method. The secondary forming method (thinning method) has a lower technical threshold for batch production, and the production cost is controllable, making it the main solution currently adopted by domestic manufacturers. However, compared to the primary forming process, products made using the secondary forming method have issues such as poor appearance yield and insufficient product consistency during mass production