Apple could invest billions to ensure that its iPhone units going forward will have OLED displays, multiple reports claim.
Most importantly, said reports suggest Apple could ink a deal with LG to expand manufacturing capacity.
Apple Could Bankroll LG’s E6 Plant To Make More OLED Displays
The up in production could help Apple achieve its rumored goal of equipping all iPhone units with OLED displays by 2019.
South Korean publication The Investor says Apple and LG Display might arrive at a deal prompting Apple to invest 2 to 3 trillion won, or about $1.75 billion to $2.62 billion, in a new facility so LG could exclusively focus on manufacturing OLED displays for the Cupertino, California tech firm. The report adds that Apple and LG have agreed on such plans tentatively, though with the timing and the investment amount still not finalized.
One industry source tells The Investor that so far, Samsung is the only manufacturer that meets Apple’s requirements, adding that LG fulfills about 70 percent of those requirements, while other Chinese display manufacturers struggle to parallel LG’s efforts.
The centerpiece of this deal, a new LG plant called E6, will therefore focus on iPhone orders. The report notes that around 3.5 trillion won, or more than $3 billion, is needed for an OLED production line that has a monthly capacity of 30,000 units of the sixth-gen OLED “mother glasses,” which is then parsed down further to make multiple iPhone screens. The facility could start in 2019.
At present, Samsung leads the smartphone OLED market with a 95 percent capture. LG, on the other hand, knows more about producing OLED TV screens. The report didn’t specify exactly how large a capture LG has in the broad OLED market, but if its deal with Apple pushes through, that number could surely balloon.
Aside from Apple, however, LG could supply OLED displays to other companies as well. Back in December, Korean reports suggested Microsoft, Google, and Apple had tapped LG for its foldable OLED displays, planned for mass production next year.
Why Apple Needs OLED Displays
But why would Apple ink a deal with LG specifically for OLED displays? Well, in addition to the Apple Watch having OLED screens, plenty of rumors say that the iPhone 8, Apple’s forthcoming flagship, will come equipped with an OLED screen — a first for any iPhone iteration. However, two iterative iPhone variants, tentatively named the iPhone 7s and iPhone 7s Plus, might come equipped with the same LCD as the models before them.