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Apple Secretly Building MicroLED Display A Move That Could Hurt LG & Samsung

In a move that could have a major impact on Samsung, LG and Sharp, Bloomberg has claimed that Apple is designing and producing its own MicroLED displays for use in their iPhones and tablets.

It’s claimed that Apple is using a secret manufacturing facility near its California headquarters to make small numbers of the screens for testing purposes, according to people familiar with the situation.

Some observers claim that for Apple to move into manufacturing is a major risk for the Company.

The Company has already hit several hurdles as the screens are far more difficult to produce than OLED displays, and the company almost killed the project a year or so ago it’s claimed.

The ambitious undertaking is the latest example of Apple bringing the design of key components in-house. The company has designed chips powering its mobile devices for several years. Its move into displays has the long-term potential to hurt a range of suppliers, from screen makers like Samsung Electronics, Japan Display, Sharp, and LG Display to companies like Synaptics, that produce chip-screen interfaces.

As soon as the news broke shares in current suppliers fell.

Universal Display shares crashed as much as 16 percent. Universal Display makes key technology and owns some OLED intellectual property; investors are likely concerned Apple’s MicroLED technology will eventually replace Universal Display’s. Synaptics, which makes screen driver components that Apple is also designing internally, fell as much as 4.4 percent.

Apple slipped almost 2 percent to $174.83 at 2:06 p.m. in New York. Japan Display dropped as much as 4.8 percent, Sharp tumbled as much as 3.4 percent and Samsung slid 1.4 percent.

Bloomberg claims that controlling MicroLED technology would help Apple stand out in a maturing smartphone market and outgun rivals like Samsung that have been able to tout superior screens. Ray Soneira, who runs screen tester DisplayMate Technologies, says bringing the design in-house is a “golden opportunity” for Apple. “Everyone can buy an OLED or LCD screen,” he says. “But Apple could own MicroLED.”

On the flip side several analysts have claimed that ultimately, Apple will likely outsource production of its new screen technology to minimize the risk of hurting its bottom line with manufacturing snafus. The California facility is too small for mass-production, but the company wants to keep the proprietary technology away from its partners as long as possible, one of the people says. “We put a lot of money into the facility,” this person says. “It’s big enough to get through the engineering builds [and] lets us keep everything in-house during the development stages.”

An Apple spokeswoman declined to comment.

Engineers at the facility are assembling prototype MicroLED screens, right down to attaching the screen to the glass.

The backplanes, an underlying component that electronically powers the displays, are developed at the Taiwan facility. Apple is also designing its own thin-film transistors and screen drivers, key components in display assemblies. Currently, the facility is capable of manufacturing a handful of fully operational Apple Watch-sized (under 2 inches diagonally) MicroLED screens at a time.

Until MicroLED is ready for the world to see, Apple will still — at least publicly — be all-in on OLED. The company plans to release a second OLED iPhone in the fall, a giant, 6.5-inch model, and is working to expand OLED production from Samsung to also include LG.

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