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Tuesday, April 19, 2011, 10:55 pm PT (01:55 am ET)

Apple reportedly picks Toshiba as sole supplier of iPhone LCDs

According to a Japanese newspaper, Apple has dropped plans to invest in a production facility at Sharp and decided to use Toshiba as the sole manufacturer of liquid crystal displays for the iPhone.

The Nikkan Kogyu Shimbun reported Wednesday that Apple has decided to go with Toshiba for orders of screens for the iPhone, as noted by MarketWatch. "Sharp was no longer a candidate for Apple's investment," the report claimed.

Sharp denied the rumor in a statement Wednesday, asserting that the report "contradicts the facts." However, if true, the report would signal a crushing loss for the company.

Last year, Sharp announced an Android smartphone that matched the resolution and dimensions of Apple's iPhone 4, which boasted a Retina Display with "the highest resolution display ever in a phone" when it was released last June.

The Japanese report follows several rumors late last year that Apple plans to invest over $1 billion each in LCD plants at Toshiba and Sharp. Last December, the Nikkei business daily alleged that Apple was investing in an LCD factory that Toshiba was building in Ishikawa, Japan. However, a Toshiba spokesman told Reuters that "the report was untrue and nothing had been decided" regarding Apple's involvement in the new factory.

Days later, Nikkei reported that Apple would partner with Sharp to build a $1.2 billion facility. According to the newspaper, Apple would be responsible for a "large portion" of the facility and would buy "most" of the panels produced by Sharp. The Sharp plant is expected to begin production in the second half of 2012.

LCD panel production has caused bottlenecks in Apple's supply chain in the past. The limited launch supply of both the original iPad and the iPad 2 has been attributed to LCD delays.