Apple is about to shake up the OLED world

Brittany A. Roston - Jul 28, 2020, 4:25pm CDT
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Apple is about to shake up the OLED world

LG Display has been given the rare chance to take on competitor Samsung in a major way, a new report claims, with Apple allegedly tapping the company to produce millions of OLED panels for its upcoming iPhone models. Apple is expected to introduce an iPhone lineup that features OLED screens across the line, resulting in increased demand for this component. Assuming the report is accurate, LG Display will increase its production in a massive way to meet this need.

News earlier this month that Apple is (probably) going to go with OLED screens across this year’s iPhone line stoked discussion about the resulting competition this would cause among suppliers. Talking about this is the Nikkei Asian Review, which claims on behalf of unnamed sources that LG Display will provide Apple with 20 million OLED smartphone panels.

Samsung Electronics largely dominates the OLED smartphone panel industry, but this new business move — assuming the report is correct — would give LG Display a unique opportunity take on its competitor in a big way. The company, which has faced several quarters of losses, will reportedly ramp up its manufacturing to produce five times the volume of these displays compared to its 2019 output.

The move underscores the rise of this new competitive market as the days of LCDs slowly slip behind us. Whether LG Display will prove itself as worthy of standing next to Samsung as a legitimate supplier for phone companies is yet to be seen, however. Samsung holds the majority of the small OLED panel market share at this time.

There would be an obvious reason for Apple to tap LG Display for a percentage of its display needs: this would diversify its suppliers, reducing its dependency on Samsung. Samsung’s dominance in the small OLED panel market has enabled it to strike terms with Apple that have resulted in the latter company paying it when panel shipments fail to reach a certain minimum threshold.

A more diversified OLED panel market would introduce an element of competition that could potentially give Apple more favorable terms going forward. This isn’t the first time Apple has targeted such diversification — it has used LG Display for OLED panels in the past, but the company wasn’t able to produce as many as Apple needed.

The report claims that LG Display has ironed out this yield problem and will be able to increase its production of these small panels. Apple’s apparent interest in decreasing its reliance on Samsung’s OLED business seemingly exceeds any concerns it may have about LG Display’s ability to meet its needs this time around.

Assuming the sources’ claims are true, this is something of a proving point for LG Display, which faces increasing competition for BOE Technology Group, a Chinese company that ranks third in the industry. Should LG Display fail to please Apple this time around, it is possible — perhaps even likely — that Apple would pass over the company and seek to establish a supplier relationship with BOE.


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