Apple could spend big for exclusivity over LG’s OLED displays

By

RED iphone
Future iPhone displays could all be made by LG.
Photo: Ste Smith/Cult of Mac

Apple could make a significant investment in LG Display’s new OLED production facility to ensure exclusive supply for future iPhones, according to a new report.

The company is said to be considering a 2 trillion to 3 trillion won (approx. $1.75 billion to $2.62 billion) deal, and a final decision is expected later this month.

Apple is unlikely to put an OLED display in every iPhone it releases this year — not because it doesn’t want to, but because it simply cannot obtain enough of them. However, reports have suggested every iPhone will have one by 2019.

To make that happen, Apple is considering a huge investment in LG Display’s new OLED production facility, which could mean every display it produces is destined for an iPhone. It would not be able to fulfill orders for Apple’s rivals.

“According to news reports on June 3, the two firms have tentatively agreed on the investment plans, even though details, including investment timing and size, have not yet been finalized,” reports The Korea Herald.

“The final decision is expected to be made after the company’s board meeting later this month.”

In the meantime, it’s thought Samsung, which currently makes 95 percent of all OLED smartphone displays, will be the exclusive supplier for the iPhone 8 this year. Apple has reportedly ordered 80 million units so far, and will require more during 2018.

For now, the South Korean company is the only manufacturer that meets Apple’s strict quality criteria. LG Display meets “about 70 percent” of the demands, sources say, but its new facility would allow it to produce panels that meet Apple’s needs.

The plant, known as E6, will cost around 3.5 trillion won. It will have the capacity to produce around 60,000 displays a month, and it could be ready to supply Apple in 2019. Not only would it guarantee Apple’s orders, but it would also mean Apple’s costs remain low.