Apple Diversifying Supply Chain
Chinese display maker BOE will reportedly supply OLED panels for the basic model of the iPhone 14 series, which is scheduled to come out in 2022. BOE have thus far supplied panels for refurbished iPhones, but this time it will supply panels for new iPhones.
Chinese IT media outlet MyDrivers reported on April 26 that BOE signed a contract with Apple to supply 6.1-inch OLED panels for the iPhone 14. The contract is worth 50 million yuan (about 9.5 billion won). BOE will supply 50 million OLED panels to Apple beginning from June. This will make up 20 to 25 percent of the total panel supply for the basic model of the iPhone 14 series.
Thus far, Samsung Display and LG Display have monopolized display supply for the iPhone. Market research firm Omdia said Samsung Display supplied 73 percent of the 106 million panels for the iPhone 13, while LG Display accounted for the remaining 27 percent.
Display industry watchers believe that this contract is the result of an improvement in BOE’s panel technology and Apple's efforts to diversify its supply chain.
However, BOE’s panels will be used in basic iPhone models only. Samsung Display and LG Display will supply low-temperature polycrystalline oxide (LTPO) TFT OLED panels for premium models such as the iPhone 14 Pro and Pro Max.
LTPO TFT OLED panels can smoothly implement a refresh rate of 120 Hz while consuming less power. Apple seems to think that BOE is not yet technologically excellent enough to supply LTPO TFT OLED panels.
BOE has recently been increasing its market share in the market of small and medium-sized OLED panels by making aggressive investments. If BOE starts supplying panels for the iPhone 14, it will further raise its market share. According to Omdia, BOE’s small and medium-sized OLED market share had been gradually increasing from 5.6 percent in 2019 to 8.7 percent in 2020 and 10.5 percent 2021. BOE’s OLED panel shipments amounted to 60 million units in 2021, ranking second after Samsung Display in global shipments. BOE also stated that it was looking to ship more than 100 million units in 2022.
On the other hand, some experts predict that BOE will not be able to supply all of the OLED panel volume in the contract with Apple. This is because BOE is not stably receiving semiconductors for panel production such as display driving ICs (DDIs). BOE receives DDIs from LX Semicon. However, as a DDI shortage occurred recently, LX Semicon is reportedly putting LG Display ahead of BOE in DDI supply.