LG Display is likely to soon become a supplier for Apple and will presumably start providing the Cupertino, California-based original equipment manufacturer (OEM) with organic light-emitting diode (OLED) panels in 2018, known industry analyst Ming-Chi Kuo of KGI Securities said earlier this week. Partnering with the South Korean display panel maker would allow Apple to also improve its collaboration with other suppliers and consequently increase its shipment yield rates, Kuo claims, adding that hiring LG Display in addition to Samsung Display would be a smart move on Apple's part as it would allow the firm to consequently improve its output. If Apple ends up agreeing with that sentiment, the Seoul-based company would likely be hired as a secondary OLED panel supplier meant to complement its main supply chain.
Though Samsung Display is currently by far the largest manufacturer of OLED panels on the planet, this particular component remains the "the most troublesome" element of Apple's supply chain, Kuo says, adding that Samsung's prowess in the field and its sheer manufacturing capacity put the company in a superior negotiating position and made Apple overly reliant on it. At least one model of the upcoming iPhone 8 series is thought to be equipped with an OLED panel and previous reports indicated that Apple is planning on fully transitioning its mobile portfolio to this technology in 2018, with such a move additionally weakening the firm's negotiating position with Samsung. Diversifying its panel and display technology suppliers — if even by little — would allow Apple to ensure a more sustainable supply of such offerings without risking its procurement costs skyrocketing in the short to medium term, Kuo suggested.
LG Display reportedly invested approximately $3.5 billion in expanding its mobile OLED manufacturing capacity earlier this year, with some analysts interpreting that move as a bet that it would become Apple's second display module supplier in the near future. The company's recently released consolidated financial report for the second quarter of the year revealed plans for additional investments in this segment, once again suggesting that the tech giant is expecting massive demand for OLED panels in the coming years, though it remains to be seen whether Apple ends up being the source of that projected surge.