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Another Apple supplier hit by cancellation of a massive micro LED delivery project

Apple Watch Ultra

A second micro LED supplier has announced the abrupt cancellation of a project believed to be for micro LED displays for the Apple Watch Ultra 3.

Apple has not confirmed the cancellation of its micro LED plans for the Apple Watch Ultra 3, nor have any suppliers explicitly said that they had been working for Apple. But alongside the firm ams Osram's seeing its shares drop 40% on the news of a cancellation, there's now Kulicke & Soffa, which is declaring a loss.

As first seen by display analyst Ross Young on Twitter/X, Kulicke & Soffa has filed details of the cancelled order to the SEC. While Apple is not named, it is believed to be the customer concerned, and micro LED was the order.

"Previously referred to as Project W, [Kulicke & Soffa] has been engaged with one of its strategic customers (the "Customer") to support the Customer with the development and future mass production of certain technologies relating to advanced display (the "Project")," says the filing. "In connection with the Customer's strategic review of its business, the Customer has informed the Company that it has cancelled the Project."

Kulicke & Soffa then say that given the cancellation of "Project W," the firm "expects to incur pre-tax charges, including impairments, in the range of $110 million and $130 million."

It's going to take Kulicke & Soffa until the end of fiscal year 2024 to "complete [the] majority of its wind down activities."

Unlike ams Osram, this supplier does not appear to have built a factory specifically for its Apple contract. But the $110 million to $130 million estimate includes charges of up to $53 million for inventory write-down.

Previous reports have suggested that despite micro LED offering color quality, brightness and lower power consumption than OLED, it has so far proven uneconomic. Apple is said to be looking for display technology to differentiate its Apple Watch Ultra from rivals, but the cost of micro LED manufacture has outweighed the benefits.

If it's correct that Kulicke & Soffa, as well as ams Osram, are Apple suppliers, this news backs up other reports that Apple has had to delay its Apple Watch Ultra 3 again. The most recent expectation is that it could take until 2027 before the third generation Apple Watch Ultra is launched.