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Tuesday, July 23, 2013, 05:39 am PT (08:39 am ET)

Apple reportedly drops LCD supplier AUO for second-gen iPad mini, may turn to Samsung

Longtime Apple supplier AU Optronics will not be providing low-power LCD screens for the company's second-generation iPad mini due to production issues, according to a new report.

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AUO's apparent inability to make the cut has industry insiders wondering whether Apple will turn to rival Samsung to meet the lost production, according to ETNews. Apple is already said to have struck a deal with LG for displays for its next-generation iPad mini.

LCDs for the current iPad mini have been supplied by AUO, LG Display and Sharp. Tuesday's report suggested that Sharp is also likely to remain a supplier for the next iPad mini, because it is the only supplier that can provide low-power oxide semiconductor LCD panels.

"Apple plans to apply oxide semiconductor LCD to iPad mini 2 despite the initial low production yield, because it gives the advantage of saving electricity," the report said. "Last year, AUO started to supply panels to Apple thanks to its price competitiveness. However, it could not convince Apple, as it failed to meet the supply deadlines or to develop an LCD with high penetration rate."

Apple may have felt comfortable in allegedly dropping AUO as an LCD supplier because of an improved relationship with Samsung Display. Tuesday's report claimed that Samsung Display has already developed an LCD sample for Apple, and the company may be able to secure a significant number of orders.

The details align with a rumor from last month, which claimed that Samsung would be the key supplier of 7.9-inch displays for Apple's next iPad mini. There has been considerable confusion, however, as to whether those screens will be high-resolution Retina displays. Tuesday's report did not offer any indication either way.

Samsung and Apple are currently engaged in a series of lawsuits in which each has accused the other of patent infringement. But in spite of those legal battles, relations between Apple and Samsung Display are alleged to have improved, and it's expected that Samsung will remain a supplier of displays for Apple's devices for the foreseeable future.