In order to balance the supply capacity between suppliers, Apple is strongly supporting LG Display in small and medium-sized OLED panels. Apple is known for its stable product ecosystem, working closely with companies like Samsung, LG, TSMC and Foxconn. Not only does Apple enjoy preferential supply privileges, but the abundance of suppliers also means that Apple can gain a very good cost advantage.
Apple requires its supply chain partners to operate "Apple-centric" production lines and adhere to its rules and guidelines. Apple is a customer suppliers can't afford to lose amid the ongoing COVID-19 outbreak, as rising demand for ipads and iphones, as well as strong growth in its services business, will drive apple's shares higher.
Apple has now signed OLED deals with LG Display and Samsung Display, a person familiar with the matter told the Korea Times on Sunday. Under the terms of the deal, the two companies will supply small-size OLED panels for upcoming iPad models.
The core issue is that Apple intends to support LG Display to get rid of its over-reliance on Samsung Display. Samsung Display won 120 million OLED panels, the majority of the order, the person said. But it's worth noting that Apple has asked LG Display to ramp up production, doubling orders for OLED panels.
"Samsung Display is still Apple's top choice in terms of who will be a major supplier, and the new order calls for 1.2 OLED panels for the upcoming iPad," the source said. But Apple is leaning toward LG Display, which has more than doubled its previous orders for 50 million OLED panels."
Another senior industry official, who declined to be named, said, "While Samsung dominates the global small and medium OLED screen market, LG Display is catching up. LG plans to invest about 4 trillion won to increase the production of small and medium OLED, which is 30 percent higher than the planned investment of Samsung Display.
Currently, LG's E6-3 production line has been earmarked to make OLED screens for future ipads. LG already has a production line for the E6-2, both of which are located in Paju. The E6-2 and E6-3 lines produce components only for Apple. The executive said LG is on track to boost its deal with Apple to make up for a possible drop in demand for large-size OLED panels during a protracted pandemic.
