Apple Mulling Investing up to $2.6 Billion in LG Display’s OLED Plant

Apple has been looking to diversify its OLED supply chain by 2018 when it plans on switching to OLED panels across its entire lineup. For now, the company has placed an order of 92 million OLED panels to Samsung for a two-year period to fulfil its OLED needs until then.

A report from Korean media claims that to diversify its supply chain, Apple is looking to invest up to $2.6 billion in LG Display’s E6 OLED plant. The investment will ensure that all OLED output from the factory would be exclusively reserved for Apple. When the factory is operational, it would produce around 30,000 units of sixth-generation OLED panels.

“Samsung Display is the only display maker that meets Apple’s strict quality criteria for now,” said an industry source on condition of anonymity. “LG Display is said to be meeting about 70 percent level of the requirements, while Chinese display makers are still struggling to catch up with that of LG.”

The investment plan has not yet been finalised, though both companies have had tentative talks about it. The deal is expected to be finalised after a board meeting scheduled to take place by the end of this month. Even if Apple invests $2.6 billion in LG Display’s factory, the latter will only be able to start producing OLED displays from 2019, which is still a few years away.

While LG wanted to start supplying OLED panels to Apple before that, it failed to procure Tokki’s vacuum machine, the best and most advanced OLED manufacturing equipment in the market. However, the Canon-owned Tokki has reserved the supply of its equipment for Samsung, its biggest customer and the company has been unable to scale its supply to meet demand from other Chinese OEMs as well.

LG Display was also reportedly in talks with Google for a potential investment that would have allowed the latter to secure a steady supply of OLED panels for its Pixel devices.

[Via The Korea Herald]

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