Reports last week said that Google wants to invest almost $1 billion in LG Display’s OLED manufacturing plants to secure OLED displays for the Pixel 2 series, although the two parties did not sign an agreement. New reports from Korea claim that LG is eyeing a bigger opportunity for next year: Apple’s iPhone 8. The company is expected to confirm during a board meeting in June that it’ll provide OLED displays for the iPhone 8 next year. That doesn’t mean the Pixel 2 deal isn’t on the table, just that the iPhone seems to be the kind of opportunity LG can’t refuse.
According to Business Korea , LG Display “virtually decided” to supply small and medium panels for Apple’s iPhone 8. Apparently, Apple asked LG directly to submit bids.
“We received a request to take part in a bid for receiving an order for small and medium-sized OLEDs from Apple,” a senior LG Display official said. “At the end of June, we will make a decision based on OLED production technology, capacity and the accompanying investment volume in an extraordinary board meeting.”
LG Display needs to make huge investments to manufacture OLED displays for smartphones, but the company doesn’t want to miss out on the current display trend. Smartphone makers are moving from LCD to OLED screens, with Apple leading the charge.
“The annual sales volume of the iPhone 8 with OLEDs is estimated at 40 million units,” representative of the display industry said. “Although LG Display was a few months behind Samsung, its E5’s annual production volume reached 5.5 million units, bringing LG Display enough volume to supply OLEDs not only to Apple but to Chinese smartphone makers.”
Samsung will be the big initial winner of Apple’s move to OLED, as LG’s biggest rival owns 95% of the smartphone OLED display market. Reports claimed that Apple inked OLED deals with Samsung worth over $9 billion. Samsung is also rapidly expanding its OLED factories to meet increasing OLED display demand.
A report from The Investor says that Apple’s iPhone 8 will secure parts from Korean suppliers, including Samsung Display for OLED screens.
Because Apple is less experienced in OLED, Samsung Display is expected to play a key role in the overall supply chain management for OLED screens, which means it’ll use its own key component suppliers.
Samsung’s System LSI will supply the display driver chip for the OLED screen, a contract worth some $422 million. Because one unit costs $5, the report notes that Apple is expected to make some 80 million iPhone 8 units this year alone.