Apple Reportedly Investing Billions in LG to Make OLED Displays for Future iPhones

Apple is widely expected to introduce its first iPhone with an OLED display later this year, after a decade of using solely LCD technology.


Earlier reports peg Samsung as the exclusive supplier of OLED displays for the high-end smartphone, as the only company that can reliably produce both the quantity and quality of panels that Apple demands.

That could change within a few years, however, as Apple has decided to invest 3 trillion won/$2.67 billion in LG's OLED production for smartphones, according to The Investor, citing a Korea Economic Daily newspaper report.

Apple will reportedly make the investment as advance payment for the planned OLED display supplies from the Korean display maker. The iPhone maker is said to secure 45,000 panels per month for future iPhones from 2019.

Apple always aims to diversify its supply chain in order to secure lower prices and reduce the risk of relying on one supplier, so it's easy to see why the iPhone maker appears to be willing to help LG ramp up OLED display production.

Reports about Apple's potential investment first surfaced earlier this month, after the companies allegedly tentatively agreed upon the investment plans, and it now appears that a deal has been or is nearly finalized.

LG is likely to build a production line dedicated to iPhone orders only, as part of its agreement with Apple, according to The Investor.

It is frequently rumored that Apple will introduce a trio of new iPhone models later this year, including iterative iPhone 7s and iPhone 7s Plus models with LCDs and the so-called "iPhone 8" or "iPhone X" with an OLED display.

Rumors suggest Apple could switch to OLED displays for its entire iPhone lineup by 2019, potentially lining up nicely with LG's production readiness.


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LG Display Plans $13 Billion OLED Investment Over Next Three Years

Earlier in July, a report by The Korea Herald suggested that Apple and supplier LG Display were working on a deal that would see Apple investing $1.75-2.62 billion into LG Display's OLED manufacturing, specifically a plant that would be exclusively devoted to Apple orders. Today, Reuters has provided a few more details on LG Display's plans to enter the OLED display market for smartphones, which rival Samsung Display currently dominates.

In total, LG Display plans to invest $13.5 billion into boosting its output of OLED screens over the next three years, covering TV screens and specifically hoping to "make inroads against rival Samsung in smartphone displays." LG Display is already the OLED leader in large-screen television displays, but now the supplier is said to be seeking a strong foothold in the OLED screen market for smartphones, coming in the wake of OLED-backed iPhone 8 rumors and Apple's reported plans to go OLED-only on iPhones beginning in 2019, and perhaps even 2018.


LG Display will invest around $4.5 billion for a new production line that will create flexible OLED panels to help bolster its position in the auto display and smartphone market, and another $2.5 billion will be saved for another line of "large-size OLED screens." In regards to lines dedicated to small and mid-sized OLED displays, it's said that Apple will help out with getting the lines up and running, continuing the investment rumors began earlier this month.
Around 5 trillion won is earmarked for a new line for flexible OLED aimed at bolstering its position in auto displays and smartphones while 2.8 trillion won will go toward a separate new line for large-size OLED screens. Both production lines will be located in Paju, northwest of Seoul. Its planned 15 trillion won investment over three years implies an average of 5 trillion won in capital spending per year, above its usual 4 trillion won, but analysts said it will probably not be enough.

"For small and mid-sized OLED, it is expected to receive additional investment from somewhere else, perhaps Apple," said Lee Min-hee, analyst at Heungkuk Securities. "One production line for small and mid-sized OLED can require nearly 10 trillion won in investment. LG doesn't have the firepower to single-handedly build a lot of OLED production lines."
Apple's current OLED deal with Samsung will see the manufacturer supply 92 million OLED panels over the next two years. In The Korea Herald's report from early July, it was rumored that LG Display's OLED output for Apple would gear up in 2019, aligning with the end of Apple's contract with Samsung. A rumor this week has also pointed towards Apple's plans to develop its own OLED technology to reduce its reliance on suppliers like Samsung Display.

Apple's launch of the first-ever OLED iPhone is widely expected to be coming later this fall, in the majorly redesigned "iPhone 8," while more iterative updates in the "iPhone 7s" and "iPhone 7s Plus" will receive traditional LCD screens.


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Apple Reportedly Investing in LG Display’s New OLED Plant, Will Be Solely Devoted to iPhones

While Samsung remains the world's the dominant supplier of OLED panels and will supply Apple with up to 92 million OLED screens over the next two years, a new report today suggests that Apple is looking to diversify its supply chain by investing $1.75-2.62 billion into LG Display's OLED manufacturing. Specifically, Apple and LG Display are said to be considering a deal that would funnel Apple's investment into LG Display's new "E6" OLED plant, which would be "exclusively dedicated to Apple orders" (via The Korea Herald).


LG Display's production on OLED screens is still far off, with its output for Apple predicted to start sometime in early 2019, which still places Samsung as the reigning supplier of OLED components for Apple over the next few years. No deal between Apple and LG Display is confirmed yet, with the companies having "tentatively" agreed upon the investment plans and more finalized details expected to come later in the month.
Apple is reportedly in talks with LG Display to invest about 2 to 3 trillion won (US$1.75-2.62 billion) into the Korean display maker’s new OLED production lines exclusively dedicated to Apple orders.

“Samsung Display is the only display maker that meets Apple’s strict quality criteria for now,” said an industry source on condition of anonymity. “LG Display is said to be meeting about 70 percent level of the requirements, while Chinese display makers are still struggling to catch up with that of LG.”
For the 2017 line of iPhones, rumors have been pointing towards the "iPhone 8" as having an OLED screen, while the iPhone 7s and iPhone 7s Plus will include standard LCD panels. The iPhone 8 is believed to include a 5.8-inch edge-to-edge display, glass body, wireless charging, no physical Home button, and potentially 3D sensing features for facial recognition.

A report out of Korea earlier this year stated that Apple aims to make every iPhone with an OLED screen by 2019, which would fall in line with today's report of Apple's and LG Display's deal being eyed for a 2019 production ramp-up on OLED screens.


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LG Said to Supply Apple With Foldable Displays for Future iPhones

LG's display division is developing and will start mass-producing foldable displays for smartphones in 2018, and supply them to Apple, Google, and Microsoft, according to South Korean website ETNews.

LG has shown off various futuristic-looking curved and foldable display prototypes over the past three years, including one with a book-like design and another that can be rolled up like a newspaper. Both designs take advantage of the flexible property of OLED displays, compared to rigid LCD displays in current iPhones.

lg-curved-foldable-displays
LG curved and foldable display prototypes

Multiple rumors point towards Apple releasing a new iPhone with an OLED display and glass casing at the high end of its smartphone lineup next year, but the reports suggest the display will be curved rather than foldable. With more than ten iPhone prototypes in testing, however, the exact design remains to be seen.

The all-new premium model is expected to have at least a 5-inch display, with early rumors claiming it could be up to a 5.8-inch device. Samsung is expected to be the primary—and possibly sole—supplier of OLED displays for Apple, at least until LG joins the mix in 2018 or later if today's report proves to be accurate.

Next year's iPhones could have bezel-free designs and no physical Home buttons, as some reports claim Touch ID will be integrated directly into the display as now possible. Apple has filed patents for flexible OLED displays with both curved and foldable designs, confirming it has at least explored both sides of the coin.

Apple's foldable display patent describes how the display could fold outward, allowing both halves of the screen to remain accessible when the phone is closed shut. The two sides would connect via a clamshell-like hinge that allows them to rotate relative to each other, while flexible printed circuit boards keep the connection intact.


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