Mikey Campbell
Following revelations that Samsung could be the sole supplier of OLED displays for a next-generation "iPhone 8" handset, a report late Wednesday reaffirms previous claims that Apple's effort to diversify its supply chain with panels from LG is unlikely to bear fruit before 2019.
Citing people with knowledge of the matter, Bloomberg reports LG is looking to reach full OLED production capacity in 2019, with small batches potentially available at the end of 2018. The Korean company is in final stage talks with Apple over component pricing and other details as it continues to deal with hurdles toward manufacturing ramp.
LG, one of the world's few OLED producers, currently supplies Apple with OLED displays for Apple Watch. In fact, it was the tech giant's sole supplier until Samsung entered the fray in late 2015.
More recently, however, LG has run into problems related to the manufacture of larger OLED panels suitable for smartphones like iPhone. In particular, the company only recently procured evaporation equipment, tools that are key to the production process.
The report likely refers to vapor deposition machines built by Canon Tokki, a small arm of Japanese imaging giant Canon. Called ELVESS OLED, these specialized systems use a patented camera tracking mechanism to lay down pixels with an extremely narrow margin of error.
A report last year estimated that almost all OLED panels in circulation are manufactured using ELVESS machines, including components built by major producers Samsung, LG and Sharp.
Despite doubling production in 2016, Canon Tokki builds less than ten units per year, leading to a backlog of orders. According to today's report, Samsung's display branch beat LG to ordering several machines, putting the latter at a distinct disadvantage. LG took receipt of its allotment this year, and is currently working to ramp up production to adequate levels.
To help accelerate the process, LG invested $7 billion in expanding production at its OLED factory in China.
Today's report jibes with rumors that Apple put some $2.7 billion toward LG's manufacturing efforts, a sum said to be in part earmarked as an advance payment for OLED supply due for delivery in 2019.
In the interim, well-connected analyst Ming-Chi Kuo says Apple will have to rely on Samsung for OLED panels bound for "iPhone 8," and potentially future smartphone models to be released next year.
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20 Comments
Currently, apparently LG's large OLED panels are very poor and are unacceptable for Apple's use.
LG has a long way to go to match the quality of Samsung's OLED panels.
Not sure what the problem is with LG because they’ve been producing large OLED panels now for at least four years and I have had two of their OLED TVs which were outstanding
Is anyone going to say that Apple can get all the excellent LED-based displays that it can because Apple can do anything? I'm hoping that—for once—people realize that even Apple, with all their wealth and connections are still resource limited like everyone else.
So Samsung has Apple over a Barrel and will gouge them for top $$$ as long as possible.
LG can make large LED displays but has problems with the small high resolution ones used in phones despite Apple's investments.
Cue the inevitable
Apple is doomed.
well not quite but it seems that Kuo has decided that he's flogged the forthcoming iPhone for all that it is worth and is focussing on the 2018 device. no doubt we will all get truly sick and tired of his 'pronouncements' but hey, they bring in Ad views which is what it is all about these days.
I think that Apple will get fed up with the display makers (either not delivering or price gouging) sooner rather than later and bring it all inhouse. My forecast (not worth anything btw and comes with no ad clicks or views) is that the likes of LG and Samsung have until after the 2019 device is released to milk Apple for all they can. After that? who knows.