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iPhone 5’s new display tech seen as reason for supply shortages

Apple’s (AAPL) decision to use a thinner and lighter touch screen on the iPhone 5 has contributed to the component shortage that affected opening weekend sales, Bloomberg reported. The Cupertino-based company for the first time is using in-cell screen technology, which combines the display and touch sensor into a single layer. The technology makes for a beautiful display, however it is also more difficult to manufacture. “Apple is facing significant production constraints due to a move toward in-cell display technology,” Ben Reitzes, an analyst at Barclays, wrote in a research note. “Apple is struggling to keep up with demand.”

In an attempt to keep up with the demand, Apple enlisted the help of Sharp (SHCAY) to manufacture displays alongside LG Display (LPL). The company faced a number of setback, however, forcing production to be delayed and leaving the company unable to reach its original deadline. Reitzes estimates shipments for the in-cell displays will reach just 10 million units in the third quarter, although the analyst claims a significant ramp up in production will allow more displays to be available in the fourth quarter.

In addition to the display shortage, Qualcomm (QCOM) previously revealed that the new baseband chips that allow the iPhone 5 to connect to 4G LTE networks were also in short supply.