Apple's efforts to widen OLED screen supply for 2018 iPhones stymied by LG delays
Apple's plans to work with LG as a second supplier for iPhone screens appear to have suffered a blow due to manufacturing delays, according to a new report.

Reports back in January indicated that Apple and LG Display were in talks for the South Korean company to supply OLED panels, for use in the so-called "iPhone X Plus" that will arrive as part of this year's iPhone line. The idea was to diversify Apple's screen supply and reduce its dependence on rival Samsung Electronics.
But according to a Wall Street Journal story published Friday, LG is "struggling" with quality panel production, putting Apple's plans in peril. Citing "people familiar with the matter," the Wall Street Journal is reporting manufacturing problems, indicating that LG may not be ready for the start of mass production of the iPhone in July. Opinions are reportedly divided within Apple as to whether LG Display will be able to make the phones in time for this year's line.
The issue, the Journal wrote, is that LG Display specializes in TV-sized OLED panels, of which it is the world's leading supplier, although the company "has yet to nail down" the production of smartphone-sized screens.
Reports in 2017 indicated that LG would not be ready to make iPhones until 2019, although in December LG was reported to have a deal to enter the supply chain.
Apple is expected to make about 100 million iPhones this year, according to analyst consensus, with about half of those using OLED screens.
In addition, OLED production for TV-sized panels is a mature process that's been around for years; using the technology on a smaller scale, and with optimization for a touchscreen, is much more complicated and difficult.
Apple and Samsung first reached an OLED panel deal in 2016. But by late 2017, before the iPhone X was even introduced, analyst Ming-Chi Kuo of KGI Securities was writing that Apple was in "urgent need" of a second source of OLED panels.
Apple's deal with LG, announced in December of 2017, was meant to alleviate that need, and likely give the iPhone manufacturer more leverage for cost negotiations, but whether it actually will in a timely fashion is in question.

Reports back in January indicated that Apple and LG Display were in talks for the South Korean company to supply OLED panels, for use in the so-called "iPhone X Plus" that will arrive as part of this year's iPhone line. The idea was to diversify Apple's screen supply and reduce its dependence on rival Samsung Electronics.
But according to a Wall Street Journal story published Friday, LG is "struggling" with quality panel production, putting Apple's plans in peril. Citing "people familiar with the matter," the Wall Street Journal is reporting manufacturing problems, indicating that LG may not be ready for the start of mass production of the iPhone in July. Opinions are reportedly divided within Apple as to whether LG Display will be able to make the phones in time for this year's line.
The issue, the Journal wrote, is that LG Display specializes in TV-sized OLED panels, of which it is the world's leading supplier, although the company "has yet to nail down" the production of smartphone-sized screens.
Reports in 2017 indicated that LG would not be ready to make iPhones until 2019, although in December LG was reported to have a deal to enter the supply chain.
Bargaining Power
Apple finds itself in a disadvantageous bargaining position in dealing with only one supplier for the OLED screens, which are one of the more expensive parts of the higher-end iPhones. Complicating matters is that Samsung, the supplier, is also Apple's main hardware competitor in smartphones. Meanwhile, LG Display, also based in South Korea, is itself a major rival to Samsung.Apple is expected to make about 100 million iPhones this year, according to analyst consensus, with about half of those using OLED screens.
A history of panels
When Apple began producing what became the iPhone X throughout 2017, it soon became clear that Samsung was the only company able to mass-produce OLED panels of the size necessary for the device. Producing OLED screens is much more difficult, as a single speck of dust is capable of ruining an entire screen during the process of initial fabrication. Samsung has long used OLED screens on its own Galaxy devices.In addition, OLED production for TV-sized panels is a mature process that's been around for years; using the technology on a smaller scale, and with optimization for a touchscreen, is much more complicated and difficult.
Apple and Samsung first reached an OLED panel deal in 2016. But by late 2017, before the iPhone X was even introduced, analyst Ming-Chi Kuo of KGI Securities was writing that Apple was in "urgent need" of a second source of OLED panels.
Apple's deal with LG, announced in December of 2017, was meant to alleviate that need, and likely give the iPhone manufacturer more leverage for cost negotiations, but whether it actually will in a timely fashion is in question.
Comments
Of course the iPhone X batches may be different but thats not elaborated here. In terms of general OLED displays LG is on par, or better than, Samsung these days.
As Huawei is also seeking a second supplier, LGDisplay would appear to be getting some interest from various companies and its own LGelectronics will probably want some too.
It's difficult to see how LG can ramp up enough production for the likes of Huawei and Apple at the same time. And Xiaomi too? That could work out to a lot of phones.
It seems current LG OLED panels for Huawei also have Goodix in-screen fingerprint scanners built into them during the manufacturing process. I get the impression that they are testing things in the real world on a low volume phone prior to deciding what to do next.
Last year there was talk of LG and Huawei entering a long term strategic agreement for OLED panels. No idea what came of that but if Apple also wants a commitment from LG it looks like it will be tough to deliver to everyone.
http://www.businesskorea.co.kr/english/news/ict/19356-huawei’s-needs-lg-display-huawei-sign-long-term-smartphone-oled-supply-deal
Most likely, Huawei and Xiaomi (heck LG themselves) will settle for an average quality OLED panel. Apple cannot do that, since they are getting excellent quality panel from Samsung already. If anything, Apple might be stuck with Samsung for another year, while LG/Huawei/Xioami use OLED panels from LG.
I can understand Apple wanting that extra quality for the top phones but wonder if they would eventually accept lesser, but still excellent, quality from LG for non top of the line phones if the price was right.
On a strategic level that meeting between Huawei and LG is interesting supposing something came of it. If Huawei has signed on for a significant amount of current LG OLED panels and with any agreement supposedly being 'long term', is it unreasonable to envisage a situation where their orders take priority?
Huawei's stated goal is to pass Apple on unit shipments relatively soon. They already did it for most of last year. Clearly, most of those phones were LCDs but if they want to shift more OLED panels this year but use a second supplier, it's clear that Apple and Huawei will be looking to LG. Huawei uses JDI too.
https://arstechnica.com/gadgets/2017/10/google-is-investigating-reports-of-pixel-2-xl-display-burn-in/
If LG can’t fix these kinds of defects with their phone screens, then Apple would naturally reject the product.