Apple developing its own OLED technology to reduce dependence on Samsung supply, according to report

At this point, it is well known that the iPhone 8 (or iPhone Pro, or whatever it’s called) will feature a new (5.8-inch) OLED screen. Reports indicate that this display will be exclusively manufactured and supplied by Samsung, as Samsung currently dominates global supply of phone-sized OLED panels. Apple is never happy to depend on just one supplier for a critical iPhone component, not least it’s arch-rival in the tech landscape.

According to a new article from ET News (via Digitimes), Apple has bought CVD machines and has setup a research & development line in Taiwan dedicated to OLED screen technology. It aims to ultimately expand the OLED supply chain beyond just Samsung, although it’s unlikely that Apple itself would actually do the raw component manufacturing …

There have been many times in the past when Apple invests in research, tooling and equipment to bring new technologies to the mass market.

However, Apple has shown that it does not want to be the actual manufacturer, instead licensing or leasing its equipment to Chinese factories like Foxconn or Pegatron. This seems to be what is happening here with the OLED situation.

The report says Apple has purchased chemical vapor deposition machines, which are used in the creation of OLED panels.

These CVD machines are not widely available and the report says that most of the current output is dominated by one Japanese company, Canon Tokki, which passes on the majority of its capacity to Samsung Display. By buying its own CVD machines, Apple could open the OLED supply chain to more manufacturers by letting them use its own CVD machinery for the production of Apple devices, like iPhones and Apple Watch models.

Apple’s research and development into OLED will take some time to spin up and see an effect in the real world. Orders for the iPhone 8 have already been contracted to Samsung exclusively, who is expected to make up at least 160 million OLED iPhone panels over the next two years.

By the time the iPhone 9 rolls around, availability of OLED manufacturing should improve. It has been previously reported that Apple is in talks with LG Display regarding OLED production orders.

For 2017, Apple is expected to debut a single model of iPhone featuring an OLED screen panel. The other two rumored phones are expected to keep the same LCD panels as the current generation and largely resemble the current iPhone 7 and iPhone 7 Plus Plus in hardware design.

Next year, it seems that Apple wants to ship three new OLED iPhone models. To execute that vision, the company will certainly need to see a dramatic improvement in OLED yields which is why it investing in R&D makes so much sense.