Apple is expected to escape from its reliance on organic light emitting diode (OLED) screens by 2019, Bloomberg reported on September 7.
According to an industry source, LG Display regarded as the second supplier of OLED screens by Apple, aims to produce OLED screens on a full scale beginning in 2019. The display specialist will become able to produce a small number of OLED screens by the end of next year only.
The source said that LG Display is negotiating with Apple to supply OLED screens as soon as possible, but faced some problems. In particular, LG Display hit a snag in securing important deposition equipment for OLED production.
One source said that LG Display had difficulty securing it because Samsung Electronics quickly placed an order for deposition equipment for several years with Japan's Canon Tokki. He said LG Display will eventually acquire the deposition equipment this year but it will be a challenge to achieve production yields that can meet Apple's needs.
"It will be in the second half of next year that LG Display will be to start the trial operation of its production lines." said Lee Chung-hoon, CEO of UBI Research, a research institute specializing in the OLED market. He pointed out that the production line usually takes six months to operate on a full scale.
Lee, on the other hand, predicted that Samsung Electronics will be able to deliver 50 million OLED screens to Apple by the end of the year since its production line is in full swing in three months on average.
Apple announces a new iPhone model in September of each year. Therefore, Apple will have to choose whether or not to release the iPhone with LG OLED screens in the second half of next year or wait until the year after next.
Apple has been actively looking for a second supplier as the company is employing a policy to secure multiple supply lines and failed to secure insufficient supply from Samsung Electronics. In the case of Samsung Electronics, the company has to meet demand for Galaxy smartphones, too. This fact makes it quite a challenge for Samsung Electronics to meet demand for Apple’s iPhones.
Samsung Electronics has been working closely with equipment makers such as Canon Tokki on OLED screens since several years ago. Samsung Electronics has been using OLED screens in its Galaxy phones since 2009.
Analysts said Samsung Electronics will become the only OLED supplier to Apple this year, but LG Display is in the best position to become Apple's second supplier.
Although Apple inquired of Japan Display in Japan and BOE in China whether or not they could supply OLED screens to Apple, they could not as their technical levels are lagging behind by several years.
A source said that LG Display and Apple have reached the final stage of negotiations, but details of the issue including the amount of an advance payment are still under discussion.