Apple Inc will have to wait until at least 2019 to be able to move beyond Samsung Electronics Co for significant alternative supplies of next-generation, organic LED (OLED) screens for iPhones, people familiar with the matter said.
LG Display Co, a long-time supplier of LCDs for existing iPhone models, is targeting full-fledged shipments of OLED screens in 2019, with only small shipments possible toward the end of next year, the people said, asking not to be identified because the matter is private.
LG is still negotiating the size of upfront payments and details, though talks are in the final stages, one of the people said.
Apple has been aiming to adopt OLED technology because of its vibrant colors and lower energy consumption, but has been hampered by limited availability.
Samsung, its primary competitor in smartphones, is the dominant manufacturer of OLED screens and has used the technology in its own phones as well as selling it to Apple rivals.
The Cupertino, California-based company is to introduce its new iPhone next week, with one of three models expected to feature OLED panels from Samsung.
LG has been in discussions with Apple to supply OLED technology as quickly as possible, but it has come across multiple challenges, the people said.
Securing evaporation machines, a key tool in churning out the displays, has been difficult, after Samsung’s display arm beat LG to book several units, or years of orders, from supplier Canon Tokki Corp, one of the people said.
Although LG secured these machines this year for installation, it has to scramble to get the production yield up sufficiently to meet Apple’s requirements.
“It’ll be the second half of next year when LG starts test running the production lines for OLED displays for Apple and it usually takes six months for them to move into commercial production,” said Yi Choong-hoon, who runs UBI Research, which focuses on OLED analysis.
He estimated that Samsung, which takes an average of three months to ramp up plants for commercial production, would ship 50 million units of OLED displays to Apple by the end of this year.
Still, analysts have said LG is in the best position to be a second key source for OLED screens, as Apple seeks multiple suppliers.
Other display makers in Asia, including Japan Display Inc and China’s BOE Technology Group (京東方), are years behind in mastering the technology, which has also been touted for its thin structure that enables screens to be made into flexible forms.
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