Apple who are looking to cut costs out of their iPhone, iPad and Mac operations has cut new deals with Chinese display manufacturer BOE in a move that put pressure on LG and Samsung display operations.
Apple who has been cutting back their reliance on Samsung display panels in an effort to force price cuts on component supply for their devices, is now playing three manufacturers off against each other.
In the past Samsung supplied about 50%, LG 30%, and BOE 20% of iPhone OLED displays.
With the cheap iPhone16e, BOE contributes 60%-75% (12-15 million panels), LG 25%-37.5% (6–7.5 million panels), and Samsung next to nothing due to the Company having major contracts to supply display panels for other premium Apple products.
Currently Apple is actively diversifying its OLED supply in an effort to get themselves into a better bargaining position, which in the past has backfired with BOE failing to deliver the supply volumes after Apple had placed orders for millions of iPhones. In the end Apple had to pay LG and Samsung Display prices.
Now BOE has new OLED production lines and Apple is back flexing their muscle with suppliers.
At the same time LG Display is accelerating plans to produce iPhone OLED’s after missing out to Samsung in the past.
The LG electronics division are set to convert an IT OLED line that is currently being used to manufacture OLED panels for Apple’s iPads, to manufacture smartphone display panels.
This is being done because iPad Pro models launched in 2024, that have OLED panels, have slumped and the line’s operation rate has dropped.
The line has a capacity of 15,000 Gen 6 substrates per month, and 5,000 of them will be converted to those for iPhones.
In an effort to compete the struggling LG Display division moved to manufacture iPad Pro panels, but weaker-than-expected demand for the OLED iPad has left underutilized capacity, according to The Elec with Apple not able to deliver the volumes that LG Display were expecting.
By shifting some of its monthly throughput of 15,000 sixth-generation glass sheets to produce up to 5,000 sheets for iPhone OLEDs, LG Display aims to raise its overall production efficiency and meet Apple’s requirement for additional supply ahead of the iPhone 17 launch later this year.
The problem for Apple is that Samsung Display’s technical expertise and volume capacity remain crucial for Apple’s premium model and past failure by suppliers to meet demand has played well for Samsung who also happens to be a major competitor in the smartphone market up against Apple.
Apple iPhone 16.
To overcome their reliance on Samsung Apple is asking LG Display and BOE to tender for future models in an effort to mitigate the risks of depending too heavily on a single supplier, especially one that competes directly with then in the smartphone. PC and tablet markets.
LG Display who has struggled in and out of profitability and who are facing new competition from Chinese display panel manufacturers are punting on boosting their annual iPhone OLED shipments from the mid-60 million range last year off the back of Apple orders.
They are also betting on LTPO TFT technology, a feature that had been reserved for future iPhone iPro models.
The introduction of a cheap iPhone 16e has seen Chinese manufacturer BOE manufacture the bulk of OLED panels for the entry-level device, while LG Display provides supplementary volumes, this is seen as a problem for the South Korean suppliers.
The next problem is that the introduction of a budget iPhone could strip share from the premium iPhones, and this is concerning both Apple, LG and Samsung who make more margin manufacturing the more expensive OLED panel.
Currently Apple is carefully managing the volumes for their new model as they get set to launch new premium models in September 2025.
Tianma, another Chinese manufacturer of panels has recently been given a contract to supply 7-inch panels for Apple’s upcoming HomePod model which will come with a built-in touchscreen.
This is the first time an Apple speaker has featured a display.
