Apple will reportedly start to phase out Samsung as a supplier of this major iPhone part

Apple will reportedly start to phase out Samsung as a supplier of this major iPhone part
It's no surprise that 90% of the OLED panels used on the Apple iPhone 11 Pro and iPhone 11 Pro Max are sourced from Apple's main smartphone rival Samsung with the remaining 10% coming from LG Display. Three suppliers provide Apple with the LCD glass used on models like the iPhone 11: LG Display, Japan Display, and Sharp. Apple has poured money into Japan Display over the years including another $100 million this year. The tech giant is now working with Sharp to purchase a major LCD panel manufacturing facility from Japan Display for as much as $820 million. Sharp is expected to purchase the factory by next March and work out a separate arrangement with Apple afterward.

The factory, located in Hakusan City, Ishikawa prefecture in western Japan, first started production in 2015. Ironically, Apple loaned Japan Display $1.5 billion to help build it and was supposed to receive a percentage of the sales of LCD panels produced at the plant. However, just as Japan Display turned the factory on, phone manufacturers were turning away from LCD screens and turning to OLED. As a result, the factory operated at only 50% of capacity and was closed this past July with Apple still owed $800 million by the company. It should be pointed out that while Japan Display is late to the OLED game, it does churn out such panels for the Apple Watch Series 5.

Apple has apparently certified BOE's OLED panels

A new report from South Korea says that BOE will deliver to Apple next year, 45 million flexible OLED panels for the iPhone. 26 million will come from LG Display and Samsung will provide 150 million panels. For Samsung, that figure represents a huge decline from the 230 million panels that Samsung shipped to Apple this year. Back in August, we told you that Apple was in the process of certifying BOE's displays with the goal of having them replace screens made by Samsung. BOE has apparently passed the test and Apple now sees a way for it to reduce its reliance on Sammy. We could see Apple continue to purchase fewer panels from BOE every year until Samsung's screens are no longer used on the iPhone.

Apple has purchased LCD displays from BOE over the last two years, employing them for the iPad and the MacBook. So there is a level of comfort and familiarity with the company on Apple's part. Ever since BOE started selling its lower-priced OLED panels to Huawei for 2018's Mate 20 series, the outfit has seen a hike in its reputation. And if Apple ends up replacing Samsung with BOE, the latter will get a boost that most firms in the supply chain can only dream about. Apple, for its part, will be spending less money for the displays because of BOE's lower pricing.

According to TF International analyst Ming-Chi Kuo, Apple will release five new phones next year with only one, the iPhone 9, sporting an LCD display. The remaining units will be equipped with AMOLED screens. According to Kuo, those models will include a 6.7-inch iPhone 12 Pro Max, a 6.1-inch iPhone 12 Pro, a 5.4-inch iPhone 12 and a 6.1-inch iPhone 12 Plus. Whew! In other words, there will be enough demand to satisfy Apple's OLED suppliers. And with the analyst looking for Apple to sell 20 million to 30 million iPhone 9 units next year, the three LCD suppliers will also be busy. Demand for the iPad has been bucking the sluggish industry trend during the last two quarters; with this growth, Apple will need to procure enough LCD displays to meet its needs.

So if today's report is a legit look at what is going on behind the scenes, starting next year Apple will be adding a third supplier of OLED displays to its supply chain. BOE's flexible OLED panels pass Apple's demanding quality test and the supplier is apparently undercutting Samsung on price. It is hard to see what Samsung could do to fight back except wield a sharper price-cutting ax. And even then, it might not be enough to persuade Apple to keep buying displays from Samsung.



1. Tizo101

Posts: 644; Member since: Jun 05, 2015

" the latter will get a boost that most firms in the supply chain can only dream about" Glorifying Apple yet again. Just because Apple is buying doesn't change the cost of the product. Even with Samsung it won't be a big deal since they're probably the king's of diversification... These ppl even make fridges lol

15. TadTrickle

Posts: 140; Member since: Apr 08, 2019

Doesn't Samsung provide like 7 parts to the iPhone? I know it's not just the panel

17. mackan84

Posts: 682; Member since: Feb 13, 2014

Didn’t Samsung get like $100 dollars per display. That’s a lot of money and Samsung will probably miss them but not need them to survive.

3. CreeDiddy

Posts: 2284; Member since: Nov 04, 2011

Samsung semi isn’t Apple’s only customer. They have no worries...

9. vincelongman

Posts: 5806; Member since: Feb 10, 2013

It will benefit Android OEMs as there will be more supply of Samsung displays Competition is great for everyone, except the ones that fall behind e.g. LG Display and Japan Display when it comes to smartphone OLED displays

6. cmdacos

Posts: 4379; Member since: Nov 01, 2016

Nice spin on a bailout of a company losing money hand over fist that makes lower quality displays.

7. User123456789

Posts: 1337; Member since: Feb 22, 2019

They use 2 oleds and nobody noticed difference.

16. Tsepz_GP

Posts: 1224; Member since: Apr 12, 2012

Most people don’t want to acknowledge this, as you can see :D lol. There has basically been no real variance between the two panels in the XS and 11 Pro series.

8. darkkjedii

Posts: 31752; Member since: Feb 05, 2011

We all know how this ends. Samsung remains Apple's go to, cause Apple wants the best displays on the market. Even the Apple fanboys, who hate to touch their Samsung made iPhone display know who the king of the screen is. Sammy.

14. dimas

Posts: 3438; Member since: Jul 22, 2014

Let apple use lg and boe displays all the way. Make them learn from their mistakes. They will be crying for samsung supplies once their phones get weird green hues just like in huawei p20 pro and complains flow in their service centers.

18. darkkjedii

Posts: 31752; Member since: Feb 05, 2011

They'll come back to Samsung, just like they left Intel, and went back to Qualcomm.

30. vgking9699

Posts: 229; Member since: Mar 01, 2019

No they haven’t and in fact Apple this past year actually bought out intel’s model division

10. Gryffin

Posts: 90; Member since: Dec 19, 2018

Display from BOE Modem from Intel Whats next? Processor from Xiaomi?

13. dimas

Posts: 3438; Member since: Jul 22, 2014

I guess they will make tsmc do all their a-bionic chips in the near future. Boe displays are great if you want weird green gradients in your display, that is.

20. Tsepz_GP

Posts: 1224; Member since: Apr 12, 2012

It’s good to spread your supply chain, especially when the quality is pretty much the same. With the XS and 11 Pro series there has not really been quality variance in the Samsung vs LG OLEDs. Think Apple should be fine.

28. Back_from_beyond

Posts: 1485; Member since: Sep 04, 2015

Except the quality isn't pretty much the same, Samsung's panels are both more advanced and better quality, but they also cost more. BOE is likely to get to make the panels for the lower spec'd iPhone models and Samsung's panels will remain the choice for the top of the line models. This is a bad development for LG though as their OLED panels are more prone to burn in and may end up not making the cut at all.

12. dimas

Posts: 3438; Member since: Jul 22, 2014

Apple: "Your display is expensive, we have to slowly replace you." Samsung: "But we make high-quality manufacturing and..." Apple: "We want our big profits back!" Goodluck using Boe displays, apple. I don't mind if you charge high on your products but lowering your quality standards? That's ripping customers way off the line.

23. midan

Posts: 3209; Member since: Oct 09, 2017

”Goodluck using Boe displays, apple. I don't mind if you charge high on your products but lowering your quality standards? That's ripping customers way off the line.” Where they need good luck? You propably didn’t knew, but they are already using Boe displays with their MacBook and iPad since 2017. No-one is complaining and no-one see any difference and most propably don’t know or care who made the screen. Also Apple really can’t lower their quality standards, that would be biggest mistake they could do, they can’t afford that. I’m pretty sure they know what they are doing better than you ;)

26. Vancetastic

Posts: 1857; Member since: May 17, 2017

The Intel modem in my wife's XR is noticably lower quality than the Qualcomm one in the X I had. You were saying?

27. dimas

Posts: 3438; Member since: Jul 22, 2014

Really? You are comparing a display which you barely touch against a product that you put in your pocket, scramble in your bag, and most of the time don't have protective case in it? "Apple can't lower their standards." They did it with iphone 6, they just got caught when somebody bent their phones. And let's not start with lg display's uneven whites. Oh boy, iphone 7 made my cousin went back to the genius store twice because of that s**t.

31. shm224

Posts: 316; Member since: Mar 19, 2015

Those displays used in MacBook and iPads are LCD's not OLEDs.

19. MsPooks

Posts: 301; Member since: Jul 08, 2019

If you don't own Apple stock, this shouldn't matter to you in the slightest. If you do, you're about to reap serious dividends. Apple is not going to pass any cost savings on to its consumers, so profits are going up up up! The other good thing is that Apple will ne able to fleece all three of its suppliers.

21. Fred3

Posts: 607; Member since: Jan 16, 2018

I agree apple users think this is for them to have a better product but it's really for Tim apple and the investors to cut corners to make more money

24. tedkord

Posts: 17507; Member since: Jun 17, 2009

No different than any other major corporation.

25. Jrod99

Posts: 781; Member since: Jan 15, 2016

I’m sure they been itching to leave Samsung but they make excellent displays. Loving my new 4K 65 inch TV.

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