Supply Contract Comparison
Apple’s next-generation extended reality (XR) device, the Vision Pro, is emerging as a new growth driver for the Korean display industry, but Sony landed the order for highly lucrative high-cost internal displays for the device.
The production cost of the Vision Pro is about US$1,519 while its retail price is US$3,499, according to sources in the display industry and securities industry on June 11. The Vision Pro’s most expensive components are its displays, which account for 48.1 percent of the retail price. The displays are comprised of micro-OLED panels for the inside and regular OLED panels for the outside.
Sony is reportedly supplying the internal micro-OLED panels, which have the highest unit cost of any component in the device. The micro-OLED panels are about US$350 per piece, and each device requires two. The external OLED displays will be supplied by LG Display, regular OLED panels that are US$30 per piece.
“Manufacturers are basically favoring multiple vendors to diversify their supply chains and improve price competitiveness,” said an industry insider. “Sony may have the effect of preempting the market, but Korean display makers may turn the tide by developing better products.”
Samsung Display is stepping up its efforts to develop new technology with the aim of mass-producing micro OLED panels in two years. The company announced the development of a micro OLED panel in August 2022 and set up a research organization for micro OLED panel development later in the same year. In May, it took over U.S. micro OLED company Imagine for 290 billion won (US$225 million).
Some analysts say that LG Display can become the largest display supplier for the Vision Pro, beginning from its second generation. The Korean display giant has been testing micro OLED panels since 2020 to prepare for the expansion of the XR market.