Archrivals Samsung and LG Display have found themselves caught in a catch 22 situation, due to falling MacBook sales, and the lack of a decision by Apple over the future of OLED display in their next generation of products.
According to sources, Apple was set to roll out a new OLED display strategy across several products in 2024, the only problem is that Apple is squabbling over the cost of OLED panels and both LG and Samsung are refusing to invest in new manufacturing technology until they get firm orders.
Apple was planning to launch its first OLED iPads in 2024 but this could be delayed.
Apple wants next Gen 8 OLED technology and that means multibillion dollar investments by LG and Samsung.
The iPhone maker’s revenue from MacBooks was US$7.168 billion during its fiscal second quarter of 2023 running from January to March of this year, a drop of 31% from a year ago with some insiders claiming that Apple has delayed OLED for their 2024 products and may even be looking at alternative technology.
In the fiscal first quarter of 2023 the revenue from MacBook sales was US$7.735 billion, a drop of 29% year-on-year.
For two straight quarters running into 2023 Apple is facing a plunge in demand for MacBook’s.
Revenue from iPads dropped 13% year-on-year for the fiscal second quarter of 2023 to US$6.67 billion but jumped 30% year-on-year for the fiscal first quarter of 2023 to US$9.396 billion.
Gen 8 OLED production lines, which will use larger substrates than Gen 6 OLED production lines, are being planned by Samsung Display and LG Display to supply OLED panels for IT products such as tablets and notebooks however a lot depends on where Apple plans to go and who with for their OLED display panels.
Apple will launch its first iPads with OLED panels next year using existing Gen 6 OLED panels.
Samsung Display and LG Display have planned to build Gen 8 OLED production lines but will not start their build out programs until they get firm orders.
To date neither Samsung nor LG Display have placed orders for key equipment needed to build a Gen 8 OLED production line, sources said.
This hesitancy from Samsung Display and LG Display to proceed with their spending plan on Gen 8 OLED is all about profitability claims The ELEC in South Korea.
It appears that Apple is moving to OLED so that they can increase the price of their iPads and MacBooks claim analysts.
Last month, Samsung Display said it plans to spend $1.5 billion building Gen 8 OLED lines up to 2026.
For LG Display, which is in the red, spending billions of dollars on Gen 8 OLED lines without guaranteed orders will be a difficult choice to make claims The ELEC.
Back in 2019, it completed its Gen 8 white-OLED line for TV panels in Guangzhou in 2019.
But as there was no demand, the factory was dormant for over a year.
The impact of Apple’s low revenues from MacBooks is also being felt by display production equipment suppliers to Samsung Display and LG Display.
Sources said the two display panel makers are notifying their suppliers that they cannot pay more for Gen 8 equipment than they did for Gen 6 equipment.
