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 Buys Specialist Machinery to Set Up OLED Panel R&D Line in Taiwan

Apple has acquired specialist machinery from Sunic System to build its own OLED panel research and development line in Taiwan, according to a report on Monday.

Korea-based Sunic manufactures systems for OLED display production and supply for both pilot and mass production lines. According to ET News, Apple has purchased chemical vapor deposition (CVD) machines from the company to reduce its reliance on Chinese suppliers as it ramps up its R&D into OLED panel and related technology.


CVD is a technique for the fabrication and synthesis of thin films of polymeric materials, which have a broad range of application, including the production of OLED panel coatings with barrier properties.

Japanese Canon Tokki is currently the primary supplier of CVD machines and is said to ship the bulk of its output to Samsung, the biggest producer of OLED panels, but Apple's acquisition of the machines from Sunic could undermine Canon Tokki's dominant position in the CVD market going forward.
Samsung has bought five sets of OLED manufacturing equipment from Canon Tokki so far in 2017 and has signed contracts to buy five out of 10 such machines to be rolled out by the Japan-based machinery company in 2018, said the Commercial Times.
Samsung's own CVD purchases likely feed into its plan to construct the world's biggest OLED display manufacturing plant, which could begin mass production in 2019.

Apple has reportedly signed a two-year contract with the Korean company for the supply of up to 92 million curved OLED panels, at least some of which are expected to be used in this year's redesigned iPhone, variously referred to in the media as "iPhone 8", "iPhone Pro", and "iPhone X".

Apple is thought to be offering the OLED iPhone as a premium option alongside typical upgraded "S" cycle iPhone 7 handsets that will retain LCD displays. Rumors suggest that all iPhones in Apple's line-up could come with OLED displays by 2019.

Today's report suggests Apple is accelerating its research into bespoke OLED technology with the aim of eventually reducing its heavy reliance on Samsung in years to come, although whether it would actually manufacture its own OLED panels is unclear. LG has also reportedly purchased two CVD machines from Canon Tokki and has begun shipping OLED panels to Xiaomi and Google, and although LG's panels have not yet been validated by Apple, the two companies are said to be negotiating an OLED supply deal in time for 2019.

(Via DigiTimes.)

Related Roundup: iPhone 8
Tag: OLED

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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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Samsung Planning to Build World’s Largest OLED Display Factory

Samsung Display is planning to construct the world's biggest OLED display manufacturing plant, with more than 30 percent higher production capacity than the company's current biggest factory, according to Korean website ETNews.

"iPhone 8" mockup designed by Benjamin Geskin for iDrop News

The report, citing unnamed industry sources, suggests the tentatively named A5 factory could begin mass production in 2019, with a peak yield of between 180,000 and 270,000 display panels per month.

Samsung Display has reportedly also been expanding its existing A3 plant since the second half of 2015 in order to fulfill demand for OLED displays from both its sister company Samsung Electronics and Apple.

Apple is widely rumored to release its first iPhone with an OLED display, known as the "iPhone 8" for now, later this year. Reports claim Apple has ordered between 70 and 92 million OLED panels from Samsung for the device.

An earlier report out of Korea claimed Apple aims to switch its entire iPhone lineup to OLED displays by 2019.


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Ming-Chi Kuo Agrees iPhone 8 Will Launch in September With ‘Severe’ Shortages Due to Delayed Production

As more alleged design schematics and dummy models of the "iPhone 8" leak online, one of the biggest questions remains the smartphone's actual launch date. Although some industry sources believe the tenth-anniversary iPhone will still launch in September -- perhaps in very short supply -- Japanese site Mac Otakara earlier this year suggested the OLED iPhone 8 would launch "very much" behind the the LCD models.

Today, KGI Securities analyst Ming-Chi Kuo has published a report supporting the theory that Apple will debut the OLED iPhone in September, but the device will face "severe supply shortages" for some time. Kuo believes that production ramp-up on the OLED iPhone model won't begin until as late as October-November, two months later than previous ramp-ups in August-September. Similar delayed production rumors have been circulated by Bloomberg, analysts from Barclays, and Brian White.


Kuo believes that this delay "won't undermine actual demand," as long as the iPhone 8 lives up to the hype, but the heaviest demand might be pushed back until as far as the first quarter of 2018, when the bulk of users could get their hands on the device according to Kuo.
Production ramp up of OLED iPhone could be delayed to October-November (previously estimated to be August-September, as in previous years). That said, if new features, such as 3D sensing, can provide good user experience, a temporary supply shortfall won’t undermine actual demand, which may be deferred to 1H18. In that case, potential contribution starting late-2Q17 from OLED iPhone could be partially delayed by 3-6 months for related suppliers.
This delayed production ramp-up is listed by Kuo as a "potential downside risk to shipments" of all three iPhone models believed to launch this year, with a second risk coming from Apple's competitors. Samsung, Huawei, OPPO, Vivo, and Xiaomi are all gearing up to launch "high-end full-screen smartphones" in 2017, and all could have an impact specifically on the LCD models of the 2017 iPhone, according to Kuo, because those models "do not have full-screen form factors."

Because of these potential risks affecting the iPhone's shipments this year, Kuo adjusted shipping estimates for the device accordingly. The analyst believes that the "worst case scenario" could see iPhone shipments decrease by 15 to 20 percent and result in 80 to 90 million units shipped, versus a previous estimate of 100-110 million units (a 60:40 weighting is placed for the OLED and LCD iPhone models). Ultimately, Kuo said that, "We see a higher probability of the worst case scenario coming to pass."

Production delays in this year's OLED iPhone are again sourced from the device's intricate manufacturing processes, thanks to numerous upgrades including its customized OLED panel, new 10-nanometer A11 processor, all-new 3D Touch module, substrate-like printed circuit board, and 3D sensing. Despite these production difficulties, Kuo said that the iPhone 8's announcement and launch time of the new iPhones will remain similar to previous years, suggesting the usual September iPhone event from Apple.
While we believe the announcement and launch time of the new iPhones will be similar to previous ones, production ramp up of OLED iPhone could be delayed to as late as October-November compared to the usual ramp up period of August-September, due to increased production difficulty. In other words, severe supply shortages may persist for a while after the new models are launched, capping total shipments of new iPhones in 2H17.
Kuo also sees a potential loss of appeal by high-end users on the LCD versions of the new iPhone models, due to their lack of a full-screen design, contributing to Apple's potentially weak shipping momentum for the iPhone later this year in addition to the worst case scenario for the OLED model.

Related Roundup: iPhone 8 (2017)
Tags: Ming-Chi Kuo, OLED

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Apple Signs Two-Year Deal With Samsung For 92 Million OLED iPhone Panels

Apple has reportedly signed a two-year contract with Samsung for the supply up to 92 million curved OLED panels, as it attempts to ramp up capacity for this year's release of its high-end "iPhone 8".

Earlier this week supply chain sources claimed Apple had ordered 70 million units of panels from Samsung, its sole OLED supplier for the upcoming phone, which is expected to feature a major design overhaul. However, according to reports on Thursday in Korea-based ET News, Chosun Biz, and other media outlets, Apple has upped its OLED demands in an effort to cater for higher demand later this year and beyond 2017.

"iPhone X" concept via Gabor Balogh

Based on the contract, Samsung Display will ship 70-92 million small-size OLED panels to Apple in 2017, said the reports. This means that about 30% of iPhone devices shipped in 2017 will come with curved OLED panels, given that Apple currently ships about 200 million iPhone devices a year.
Rumors have consistently suggested Apple will offer the OLED iPhone alongside more typical iPhone 7S and 7S Plus models with standard LCD panels when it announces the devices in September. Apart from a 5.2-inch edge-to-edge display, the redesigned "10th anniversary" iPhone is thought to feature a glass body, some form of wireless charging, no Home button, and a premium price tag.

Meanwhile, Taiwan-based Yuanta Securities Investment Consulting has estimated that shipments of Apple's forthcoming iPhones are likely to reach 100 million units in 2017. At least 55 million of the units are expected to feature OLED panels.

Samsung has reportedly converted an LCD factory in Asia into an OLED panel plant to meet Apple's demands. The South Korean firm's total investments for OLED production lines could reach 10 trillion won in 2017, according to sources from the supply chain.

(via DigiTimes.)

Related Roundup: iPhone 8 (2017)
Tags: Samsung, OLED

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5.8-Inch iPhone Affirmed to Have Mostly Flat Display With Slightly Curved Edges

Apple's widely rumored 5.8-inch iPhone with an edge-to-edge OLED display will be flat across the front of the smartphone, and slightly curved along the left and right edges to conform with the layer of 2.5D glass that covers the display, according to multiple people familiar with the matter.

"iPhone X" concept with 2.5D display by designer Gabor Balogh

Yesterday, a report claimed the high-end iPhone will have a curved display, but with gentler curves than Samsung's Galaxy S7 edge. MacRumors has confirmed the report refers to a display that is slightly curved at the edges below 2.5D cover glass, meaning the display itself cannot be dramatically curved.

This means the report mirrors comments from IHS Markit, which last week told us that Apple will likely "adopt a flat implementation of OLED design on their special iPhone model, which is analogous to the current 2.5D glass design."

Yesterday's report said the slightly curved edges will make the iPhone sleeker, but it claimed the new design will not offer significant new functions. But a slightly expanded Multi-Touch area could result in improved gesture recognition along the edges, such as pulling up Control Center in landscape mode.

KGI Securities analyst Ming-Chi Kuo and Chinese research firm TrendForce have also said they expect Apple's special edition iPhone to have 2.5D cover glass, which refers to the slightly curved glass that sits above the actual display. Apple has used 2.5D cover glass since the iPhone 6 lineup in 2014.

Kuo said Apple is unlikely to adopt a fully curved display with 3D glass this year in light of mass production challenges and inadequate drop test performance. Some reports have surprisingly claimed the "iPhone 8" is not even finalized yet due to these yield rate considerations, suggesting stock could be limited at launch.


Apple has been testing multiple iPhone prototypes this year as usual, including one with a more dramatically curved display, but at this point it has elected to use a mostly flat display with only slightly curved edges, based on a flexible substrate, according to sources within Apple's supply chain.

The benefit of the edge-to-edge design is that it will essentially allow for an iPhone 7 Plus sized display to fit on a device that is iPhone 7 sized, which is beneficial for all sorts of reasons, such as one-handed usage and pocketability. OLED displays have many benefits over LCDs, which current iPhones use, too.

The 5.8-inch display is expected to have a primary area of around 5.2 inches, while Kuo expects some of the remaining space to house virtual buttons.

Related Roundup: iPhone 8 (2017)
Tag: OLED

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Apple Aims to Make Every iPhone With an OLED Display by 2019

A new supply chain report claims that Apple is planning to use OLED for every iPhone model by 2019, with the company expected to adopt OLED panels for 60 million units of the iPhone 8 later in 2017, equating to around 40 percent of its total manufacturing run (via The Bell) [Google Translate]. Apple will double the adoption of OLED panels for the 2018 iPhone before completely migrating over to OLED-only models for 2019.

The same report claimed that both Samsung and Inteflex are currently gearing up production for flexible printed circuit boards (FPCB) for this year's iPhone 8, with Samsung specifically beginning an expansion of its Electro-Mechanics plant in Vietnam to account for the increased Apple supply quota this year.


Apple plans to introduce OLED panels to all iPhone models by 2019. This year's introduction accounted for only 40%, but next year it is expected to double to 80% and 100% next year.
For the 2017 iPhone line, Apple is expected to stick with LCD panels for two of the iPhones -- currently referred to as the "iPhone 7s" and "iPhone 7s Plus" -- while making the "iPhone 8" its first-ever mobile device to include an OLED screen. Today's supply chain report said that Apple will use three suppliers to produce OLED panels, and orders for each will be decided and placed when production is started around April or May.

The iPhone 8 is currently rumored to include an edge-to-edge OLED display with an integrated Touch ID fingerprint sensor embedded within the screen. The OLED display is widely agreed to measure 5.8 inches, while the primary area of user interaction will be 5.15 inches, and below that there will be a "function row." The other two models are believed to keep the same aluminum design of current-model iPhones.

Related Roundup: iPhone 8 (2017)
Tag: OLED

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Nikkei Now Agrees ‘iPhone 8’ Will Have Larger 5.8-Inch OLED Display

Apple will launch three new iPhone models in the fall, including one with a 5.8-inch OLED display and two with LCD displays, according to Nikkei Asian Review.

While this is a rumor we have heard several times already, the Japanese website previously said Apple would launch a 5-inch iPhone—not 5.8 inches—in 2017.

The relevant bit from today's report:
The upcoming iPhone, to be launched this fall, will come in three configurations -- two with liquid crystal displays and one with a 5.8-inch organic light-emitting diode display.
Here's what it reported last October:
"Apple has tentatively decided that all the 5.5-inch, 5-inch and 4.7-inch models will have glass backs, departing from metal casings adopted by current iPhones, and Biel and Lens are likely to be providing all the glass backs for the new iPhones next year," the source said.
5.8 inches is now the widely agreed upon screen size for Apple's first iPhone with an OLED display, but there is likely a reasonable explanation as to why Nikkei and two other reports suggested the model would have a 5-inch display.

Namely, KGI Securities analyst Ming-Chi Kuo said while the so-called "iPhone 8" will indeed have a 5.8-inch display, the primary area will actually be 5.15 inches, while the rest of the space will be reserved for a wide row of virtual buttons. Kuo also said the device's physical dimensions will likely be similar to a 4.7-inch iPhone.

Given the size variation between the OLED panel, display area, and physical dimensions rumored, it remains unclear if Apple will officially categorize the "iPhone 8" as 5.1 inches, 5.2 inches, 5.8 inches, or a different size.

Apple is expected to remove the Home button to make room for the larger display without significantly increasing the device's overall footprint. The bezels surrounding the display are also expected to be removed, although a very slim top bezel could remain to house the front-facing camera and earpiece cutout.

While some reports have suggested Touch ID may be entirely replaced with biometric technologies such as iris or facial recognition or even ultrasound, Apple has filed a patent for a fingerprint sensor embedded underneath a touchscreen. Apple also has a patent for integrating the ambient light sensor into the display.

The much-rumored 5.8-inch iPhone, which has also been coined the "iPhone Pro" or "iPhone X" in honor of the smartphone's tenth anniversary this year, could cost upwards of $1,000 in the United States. It is expected to be announced in September alongside updated 4.7-inch and 5.5-inch models.

Related Roundup: iPhone 8 (2017)
Tags: OLED, nikkei.com

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