NEW YORK - Apple will have
to wait until at least 2019 to be able to move beyond Samsung Electronics for significant
alternative supplies of next-generation, organic light-emitting diode
screens for iPhones, according to people familiar with the matter.
LG Display, a long-time
supplier of liquid crystal displays for existing iPhone models, is targeting
full-fledged shipments of OLED screens in 2019, with only small shipments
possible towards the end of next year, the people said, asking not to be
identified because the matter is private. LG is still negotiating the size of
upfront payments and details, though talks are in the final stages, said
one of the people.
Apple has been aiming to
adopt OLED technology because of its vibrant colors and lower energy consumption,
but has been hampered by limited availability. Samsung, its primary competitor
in smartphones, is the dominant manufacturer of OLED screens and has used the
technology in its own phones as well as selling it to Apple rivals. The
Cupertino, California-based company will introduce its new iPhone next week,
with one of three models expected to feature OLED panels from Samsung.
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LG has been in discussions
with Apple to supply OLED technology as quickly as possible, but it’s come
across multiple challenges, the people said.
Securing evaporation
machines, a key tool in churning out the displays, has been difficult, after
Samsung’s display arm beat LG to booking several units, or years of orders,
from supplier Canon Tokki Corp., one of the person said. Though LG finally
managed to secure these machines this year for installation, it has to scramble
to get the production yield sufficiently up to meet Apple’s requirements.
Apple typically introduces
new iPhones each fall so it may ship the first OLED phone with LG technology in
late 2018 with limited supplies. Alternatively, it could wait to add LG models
later in the life cycle of the next model.
“It’ll be the second half of
next year when LG starts test running the production lines for OLED displays
for Apple and it usually takes six months for them to move into commercial
production,” said Yi Choong-hoon, who runs UBI Research that focuses on OLED
analysis.
He estimates Samsung, which
takes an average of three months to ramp up plants for commercial production,
will ship 50 million units of OLED displays to Apple by the end of this year.
Jean Lee, an LG Display
spokeswoman; Kim Ho-jeong, a Samsung Display spokesman; and Josh Rosenstock, a
spokesman for Apple, all declined to comment.
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Samsung is the sole screen
supplier for this year’s OLED iPhone from Apple, people familiar with the
matter have said. The South Korean company began investing in the advanced
panels years ago and worked closely with suppliers such as Canon Tokki to fine
tune production. Samsung’s Galaxy phones have featured OLED displays since
2009.
LG on the other hand focused
on TV panels and a different manufacturing method. Instead of making red, green
and blue pixels that can glow independently, LG panels have a white OLED base
and rely on filters to produce colors. While the technology works fine for
large screens, it has fallen short in brightness and power consumption for
smaller sizes.
Still, analysts have said LG
is in the best position to be a second key source for OLED screens, as Apple
seeks multiple suppliers. Other display makers in Asia including Japan Display
Inc. and China’s BOE Technology Group are years behind in mastering the
technology, which has also been touted for its razor-thin structure that
enables screens to be made into flexible forms.