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Apple iPhone or OLED technology will be used by Japanese suppliers

Beijing time on October 17 morning news, now, if you buy a high-end smart phone, it is mostly using OLED display with better quality and less power consumption unless you buy an iPhone.
But this situation will change next year. Apple also plans to adopt the technology on its flagship phone next year. To this end, the US technology giant must purchase millions of OLED displays.
Therefore, Japanese suppliers are under pressure to increase production capacity. Apple is currently in talks with Sharp about OLED procurement. However, the company usually works with multiple vendors at the same time. The Japanese Display Company (hereinafter referred to asJDI) is also expanding its OLED production capacity. It is reported that the initial investment of each company will reach 2 billion US dollars. Even if there is no order at the beginning, you can only make your own payment.
If you don‘t invest in OLEDs, you’ll be pushed out of the smartphone supply chain,” said MUFJ Morgan Stanley analyst Takeo Miyamoto.
The smartphone industry is gradually abandoning LCD screensonce upon a time, almost all smartphones used this technology, which is still very popular in the TV industry. But now, the most high-end smartphones often use OLED technology, which is mainly due to the technology’s lower power consumption and sharper image quality. The screen is also very soft and has the potential to help companies develop flexible phones and drive other innovations.
According to market research firm IHS Markit, Samsung Electronics" target="_blank">Electronics currently dominates the smartphone OLED market, with shipments accounting for 99% in the first half of this year and Huiguang accounting for only 0.4%. But Samsung is also Apple’s biggest competitor in the smartphone market, so if Apple wants to use OLED technology in the iPhone, it must find a new supplier.
Apple is slower than its competitors in embracing OLEDs. Samsung Galaxy S7 and Google‘s Pixel phones all use OLED technology, and Motorola, OPPO, HTC and other manufacturers also use this display technology. Apple has not responded to OLED technology.
According to reports, Apple is in talks with Samsung to ensure the supply of OLED. Sharp’s capital investment in OLED is also part of its previously announced 200 billion yen OLED technology investment, which is also a strategic plan to adapt to the new owner Foxconn – Foxconn itself is Apple’s important foundry. The plan has enormous opportunities: IHS Markit estimates that the OLED smartphone display market will reach $18.6 billion by 2018, surpassing LCD screens.
“Most suppliers are planning aggressive capital investments,” said IHS Markit analyst Hiroshi Hayase. Since OLEDs can be produced from flexible materials like film, “there is a possibility of opening new markets.”
Since its launch in 2014, JDI has lost 80% of its market value. And becoming an OEM of Apple can be both an opportunity and a challenge. 54% of JDI’s LCD screen revenue comes from Apple. According to the Kyodo News Agency, the company has already contacted the bank and hopes to obtain tens of billions of yen in loans. For the company, there is almost no choice but to invest in OLED.
JDI will invest 150 billion yen ($1.44 billion) to build an OLED production line, with funding sources including loans and equity financing. A JDI spokesperson said the company also plans to launch an OLED test line in March 2018. He said the company is communicating with customers, shareholders and banks, but declined to disclose OLED investment plans and specific financing activities.
JDI can also reach a financing agreement with the seller, use the funds from Apple to build a production line, and repay the debt through sales of OLED displays. But this is a risky model. In fact, GT ADVANCED TECHNOLOGIES suffered losses in 2014. Apple then loaned $576 million to the company, commissioning it to produce a sapphire screen for the iPhone 6. But the company’s product quality failed to meet the standard, and then even filed for bankruptcy protection.
“JDI’s strategy has always relied on Apple,” Miyamoto said. “This is naive.”
JDI was merged four years ago by Sony, Toshiba and Hitachi‘s LCD division, and the Japanese government fund Innovation Network holds a 36% stake a company founded in 2009 to support key technology companies. JDI went public in 2014 and continued to fall into losses after achieving profitability that year. Although revenues are rising year by year, it is expected to decline by 9% in the current fiscal year ending in June.
Miyamoto said that the company may still face a shortage of funds, “just like walking on a wire.”

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