LG Display wants compensation for Apple Watch MicroLED project closure
LG Display has seemingly become the latest victim of Apple's apparent cancellation of microLED displays for the Apple Watch, but the supply chain partner is seeking compensation for the project's closure.
An Apple Watch Ultra display
The cancellation of the rumored microLED displays intended for the Apple Watch has already affected multiple suppliers, including Klulicke and Soffa and ams Osram. Now, it seems a major supplier wants Apple to cover the costs of the failed project.
According to TheElec, LG Display has made a request for compensation from Apple over the project's suspension.
While LG Display has been preparing a microLED backplane process based on an earlier Apple request, Apple later reportedly ended the development project, putting it on pause. The supply chain took the pause to mean a cancellation.
For LG Display, this meant it had put out a significant amount of funds over the years to prepare for the microLED backplane's production.
Equipment investments worth billions of won (millions of dollars), as well as the movement of machinery between plants, hiring of employees for a task force, and preparations with key partners were undertaken by LG Display for Apple's failed display project.
It also bought 14 patents related to microLED in June 2023, which would've applied to the project. It's reckoned that they can be applied to other devices or resold, but it was yet another cost to LG Display.
Industry experts told the report that any form of compensation would probably be included as part of the price of OLED panels for the iPhone and iPad, which LG Display already makes.
Apple is no stranger to compensating suppliers over display orders. For Samsung Display, a key display partner, it has been compensated in the past due to Apple failing to buy the contracted minimum orders of OLED panels for iPhones over the years.
If LG Display does get compensation, there is the fear that other suppliers caught up in the project may feel disgruntled. Some suppliers have signed contracts with Apple, defining compensation rates.
LG Display seemingly did not sign a contract with Apple. As firms who did not sign a contract with the company are not guaranteed compensation for their efforts, LG Display's potential reward could ruffle feathers among the contractless group who may feel left out.
Read on AppleInsider
Comments
That seems like an unfortunate business mistake on LG's part. These sorts of things should be stipulated up-front in signed contracts. It sounds like Apple will probably do something to compensate LG, but LG's business leaders really stepped in it when it comes to protecting their shareholders' interests. Hopefully they will learn from this and move on.
How so?