Apple Said to Mull China Supplier for Next-Gen iPhone Screen

Apple Said to Mull China Supplier for Next-Gen iPhone Screen

Apple is in discussions with China’s BOE Technology Group to supply next-generation displays for future iPhones, a key component that’s being provided by a Samsung Electronics unit, according to Bloomberg.

Apple’s been testing BOE’s active-matrix organic light-emitting diode screens for months but hasn’t decided if it’ll add the Chinese company to its roster of suppliers, one of the people familiar with the matter said, asking not to be named talking about private negotiations. BOE, one of the country’s largest screen makers, is spending close to 100 billion yuan ($14.5 billion) building two AMOLED plants in the southwestern province of Sichuan in anticipation of future business.

Talks are at an early stage and it’s unlikely to supply the next iPhone, but BOE is banking on outfitting the one in 2018 or later, the person said. If BOE is selected for OLED, it will become the first known future supplier of the next-generation screens to Apple outside of South Korea and Japan. Apple declined to comment, and BOE declined to comment on talks with customers.

The display is one of the most expensive components of a smartphone. OLED screens are more difficult to produce, making Apple beholden to suppliers still working to manufacture the displays in mass quantities. The world’s four biggest suppliers of smartphone displays, Samsung, Sharp, LG and Japan Display, are said to have insufficient capacity to equip all new iPhones this year, a constraint that may persist into 2018. That means Apple may be forced to adopt OLED in just one version of its device this year.

While BOE’s ramping up capacity, it’s likely to miss the next iPhone. That sixth-generation factory won’t crank out a single screen till the summer, while new iPhones typically go on sale in the fall. When that plant is up to full capacity, it’ll be able to put out 48,000 glass substrates a month, BOE said in an e-mailed statement, referring to the thin surfaces from which screens are carved out.

Apple and Samsung have an exclusive OLED supply deal covering 2017, people with knowledge of the agreement have said. Yet that doesn’t guarantee the South Korean technology giant can make enough displays to sate iPhone demand, particularly given Samsung needs to outfit its own slate of upcoming gadgets. Some analysts estimate that Apple could sell as many as 90 million iPhones in the last three months of 2017 alone.