Apple to push LG Display as its second supplier of OLED panels after Samsung

LG Display is trying to increase its production capabilities in order to meet Apple's requirements.

Back in January, a report had stated that Apple had pumped $2.7 billion into LG as an advance payment for OLED panels and it finally seems to have paid off for Apple.

Apple iPhone X. Image: Reuters

Apple iPhone X. Image: tech2

According to a report by the South China Morning Post, Apple is planning to get LG to be its second supplier for its OLED displays with an initial number of units being much lower in comparison to its primary supplier, Samsung.

LG Display is expected to initially deliver between 2 and 4 million units which are barely going to scratch the surface in terms of iPhones that are going to ship this year. LG will, therefore, have just 20 percent of the OLED supply chain while the rest will still belong to Samsung.

Sources close to LG Display claim that the company does want a bigger cut than what they have at present, but is not ready to meet the demand just yet. LG Display is expected to produce OLED panels for the larger 6.5-inch model that is being touted as the iPhone X Plus.

The report also mentions that there could be some internal dispute at Apple's end whether they would want LG Display to be a second supplier for its OLED panels or to continue with Samsung as the sole supplier. LG is frantically trying to increase its production capabilities in order to meet Apple's requirements, which in turn would also give Apple leverage to reduce its reliance on Samsung for its OLED displays.

Jerry Kang, a senior principal analyst at IHS Markit in a comment to the publication said, “Securing a second supplier for OLED screens is crucial for Apple as it will allow the company to reduce its reliance on Samsung, which is currently the sole supplier. At the same time, it will help accelerate a broad adoption of OLED screens. More suppliers mean more volume and in turn, lower pricing.”

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