Glass-plastic Hybrid Lens: Another Upgrade of Mobile Phone Lens Industry

It is reported that Huawei's Mate 30 series, which is scheduled to be released in the autumn of 2019, will cancel the periscope lens design, but the flagship product expected to be launched next year will still adopt the periscope design, and will be equipped with glass-plastic hybrid lens. The glass lens may be exclusively supplied by Japanese manufacturer HOYA, and Taiwanese manufacturer Largan is expected to obtain exclusive assembly opportunities.

The glass-plastic hybrid lens is the best choice now

At present, plastic lenses are widely used in mobile devices such as mobile phones and pads. With the continuous improvement of mobile phone pixels, from the initial 110,000 pixels to the current 20 million pixels or even higher. In order to improve the image quality, the lens used by mainstream mobile phones is lens made up of 6 or more optical plastic lenses.

Optical plastic lenses are not as light-transmissive as optical glass lenses, but they are lighter in weight and have a bigger volume of production due to low process difficulty and production cost, and are mainly used in smart phones. Optical glass lenses are often used in high-end security video surveillance, car lens, vision machines and other industries due to their high price.

 

 

The glass-plastic hybrid lens means replacing some plastic lenses with glass lenses. At present, the mainstream method is to use 6 plastic lenses with one glass lens. Compared with plastic lenses, glass-plastic hybrid lenses have higher light transmittance and more stable chemical properties, which can improve the imaging effect under different brightness and darkness. It is the development trend of future mobile phone lenses.

Smartphone shipments will dominate the demand for glass-plastic hybrid lenses

90% downstream demand for optical lenses is created by smart mobile terminals (smartphones, functional phones, pads), with smartphones as the main force, accounting for 75%.In addition to the needs of smart terminals, computers, security surveillance and traditional photography, other downstream needs include machine vision, VR/AR, projectors, somatosensory gaming machines, medical endoscopes, microscopes, telescopes, etc., which account for about 2.7% of applications.

Most optical lens are used on intelligent terminals

 

Since smartphones are the main growth driver for optical lenses, the market size of glass-plastic hybrid lenses is closely related to the sales of smartphones. In 2018, the global smartphone market was in a state of weakness, with annual sales of 1.456 billion units, a decrease of about 1% from 2017 sales. In 2019, the global economy slowed down slightly, and most users still hold a wait-and-see attitude toward 5G mobile phones. It is expected that the overall shipments of the global smartphone market will continue to decline.

Smartphone shipments may keep decreasing

 

Although smartphone shipments of 2018 showed a downward trend, revenue continued to grow, mainly due to the growth of mid- high-end mobile phone sales. In 2018, global smartphone revenue increased by 5% compared to 2017, reaching 522 billion USD. Smartphones with the price over 800 USD account for about 12% of the annual shipments, and is 3% higher than that of 2017. Smartphones priced between 150 USD and 400 accounted for 46% of shipments in 2018, up 2% when comparing with 2017.

Increasing shipments of mid-high-end smartphone pulls revenue

 

The glass-plastic hybrid lens is expected to be used first on high-end smartphones, while the current high-end smartphones are equipped with three cameras (one on the front and two on the back). If the periscope lens solution (three lenses on the back) is adopted by major mobile phone manufacturers, the demand for glass-plastic hybrid lenses will be further increased.

The value of the glass-plastic hybrid lens is concentrated in the upstream of the industrial chain

From the perspective of industrial chain structure, CMOS image sensors, voice coil motors, optical lenses, etc. constitute the upstream of the industry. Midstream module manufacturers are responsible for encapsulating various components into camera modules, and downstream implementation of cameras for mobile phones, pads, PCs, and various electronics. The mid-stream assembly profit is low, and in the upstream where the value concentrated, CIS is the soul component of the optical lens. Due to the addition of glass lenses to the glass-plastic hybrid lens, the process difficulty has increased and the lens industry has become a new hotspot upstream sector.

CIS and lens are more important upstream materials

 

In terms of value, the larger proportion of the industry chain are CIS (30%~40%), lens (20%~30%) and module (10%~15%).

Glass plastic mixed lens market space

As the glass-plastic hybrid lens is currently in small production and the unit price is expected to be higher than the current mainstream plastic lens, it is expected to be used first in high-end smartphones.

In 2018, high-end smartphones (with a price more than $800) shipped 175 million units worldwide, an increase of about 32% from the 132 million units in 2017. Although global shipments of smartphones continued to decline in the first two quarters of 2019, the annual shipments of high-end smartphones are expected to maintain a small increase, with a conservative estimate of more than 180 million units.

Among Apple's current lens suppliers, only AAC Technologies has the ability to produce glass-plastic hybrid lenses, but the capacity is only 25% of Apple's demand. If Apple does not expand its suppliers, it is unlikely that the glass-plastic hybrid lens will be used in iPhone in the short term. The Android camp will be the first to apply glass-plastic hybrid lenses.

In 2018, iPhone’s shipments were 225 million units, of which about 150 million sets were sold for more than 800 USD, accounting for 85.7% of the world's high-end smartphone shipments, but such a high percentage is not expected to be kept in 2019.

Monthly Shipments of iPhone in 2018

Shipments of iPhone continued to decline in 2019, falling 18.2% year-on-year in the second quarter. At the same time, Huawei, Samsung and OPPO in the Android camp continued to grow, with Huawei growing 8.5% year-on-year and Samsung increasing 5.5% year-on-year. The shipments of high-end smartphones in the Android camp in 2019 is expected to exceed 35 million units at least.

At present, the back of the high-end smart phone is equipped with a dual-camera lens. In the case of Huawei's mass-produced back-mounted three-camera lens smartphone, the demand for the lens of the global high-end smartphone (except the iPhone) is expected to exceed 100 million in 2019. The replacement of mainstream plastic lenses by glass-plastic hybrid lenses will determine the market size of hybrid lenses.

Mainland China manufacturers are expected to surpass with the help of glass-plastic hybrid lens

For many years, Largan has stayed at the forefront of the market. Since 2003, it has taken the lead in the development of a 1.3 million pixels mobile phone lens. Subsequently, it has developed 2 million, 3 million, 5 million, and 8 million pixels mobile phone lenses all in advance in the global mobile phone lens business. At present, the absolute leader of the mobile phone lens is still Largan, but the gap between Largan and mainland China’s manufacturers is gradually narrowing.

Currently, Largan does not carry out the glass-plastic hybrid lens business, and it still focuses on the development of plastic lenses. There are two manufacturers in mainland China that can mass produce glass-plastic hybrid lenses: LCE and Sunny Optical.

Since glass lenses are heavier than plastic lenses, autofocus (focusing the lens position by the voice coil motor) is a major technical challenge for cameras with one or more glass lenses. However, according to the information disclosed by LCE, the thickness of its glass-plastic hybrid lens 6P1G (6 plastic lenses with a glass lens) has reduced to 7.2 mm, which is 0.3 mm thinner than that of mainstream 7P (7 plastic lenses) plastic lens. This makes it possible for the glass-plastic hybrid lens to replace plastic lenses.

At present, LCE has completed the trial production of small batch samples of glass-plastic hybrid high-end mobile phone lenses developed for China's first-line mobile phone brands. It is expected to be applied into mobile phones and put into mass production in 2019.