TAIPEI/BEIJING/SEOUL -- Apple is in the final stages of certifying advanced screens from top Chinese display maker BOE Technology Group for iPhones next year, as the U.S. tech giant attempts to cut costs and reduce its reliance on South Korea's Samsung Electronics.

The iPhone maker is "aggressively testing" BOE's flexible organic light-emitting diode, or OLED, displays, sources told the Nikkei Asian Review, raising the possibility that Apple could source this advanced display technology from China for the first time. Apple will decide by the end of this year whether to take on BOE as a supplier of its single most expensive component, they said.

BOE's entry into one of the world's most demanding smartphone supply chains would mark a leap forward for the Chinese display panel industry, which has been the recipient of billions of dollars of state and public support over the past decade. The sector has been nurtured by Beijing with grants and subsidies in a bid to move its industry up the consumer electronics value chain.

The OLED market is also expected to expand rapidly in the near future, rising from last year's $25.5 billion to more than $30 billion this year, according to IDTechEx Research.

These advanced displays use an electric current passing through thin films of organic materials to generate light, and so consume less power. They not only allow for better contrast and color, thinner smartphones and foldable screens, but also could be used in wearable and other electronic devices.

Neither U.S. nor Japanese display makers have been able to provide sufficiently high-quality OLED technology to Apple.

The iPhone maker currently buys OLEDs from Samsung, which dominates the premium screen market globally with a more than 90% share, and LG Display.

The entry of BOE as an OLED supplier could threaten Samsung Display's position and give Apple more bargaining power to win price cuts from the South Korean suppliers. BOE, which began producing flexible OLED screens at the end of 2017, also supplies the advanced displays to Huawei Technologies' revolutionary Mate X foldable smartphone, a rival to Samsung's Galaxy Fold.

However, BOE is still vulnerable to a potential crackdown from the U.S., where companies such as Corning, 3M and Applied Materials provide the most crucial materials and equipment to make those screens. Any attempt by the U.S. to clamp down on supplies to BOE -- as Washington did to Huawei -- could hit the Chinese display champion severely.

Apple is currently testing BOE's flexible OLED displays from the company's facility in the Sichuan Province city of Chengdu, China's first site to produce such advanced displays, two sources told Nikkei. BOE is also building another facility in Sichuan Province, which would be allocated to Apple if it places orders, the people said.

Apple is expected to produce at least two iPhones with OLED displays in 2020, sources said. The California tech titan is also considering OLED screens for all the new models due to be unveiled in September of next year, three sources said.

Two sources with knowledge of the situation said BOE was likely to supply the new iPhones next year if it wins certification. But it might first be asked to offer displays for repair purposes, as well as panels for older models of iPhones, one source suggested. That would still mark a milestone for BOE, the source said, as it would be Apple's first-ever purchase of Chinese-made OLED displays.

OLED display is the most expensive component in the iPhone. It accounted for $110, or nearly 30%, of the total $370.25 cost of the iPhone X, the first OLED iPhone, in 2017, according to IHS Markit's teardown. The cost of the OLED display rose to $120 the following year on the iPhone XS Max due to the larger screen. BOE-made OLED displays could be 20% cheaper than Samsung's products, one of the sources familiar with the discussions said.

The high cost of OLED panels is due to the heavy capital investment required. Compared with a standardized liquid crystal display production line for smartphones, an OLED panel facility could be twice as expensive at about $6.5 billion.

Samsung has dominated the segment since it began to use OLED in its own smartphones in 2009. LG Display, a key Apple supplier of OLED, has suffered widening losses in its panel business, and there are questions about whether it would be prepared to invest further, which would leave Samsung as Apple's only option. Most Taiwanese and Japanese suppliers have stopped investing in OLED displays.

"Apple has the incentive to qualify a new supplier for OLED display as [others] are a bit reluctant to invest too much to expand capacity," said Eric Chiou, a veteran display analyst at Taipei-based research company WitsView. "That gives BOE a good opportunity to break into the new market while the Chinese display company has already proven it has capability to supply to MacBooks, iPads, HP and Dell screens. It should not be too unexpected if Apple eventually buys OLEDs from BOE too."

BOE was founded in 1993 in Beijing as a former military and defense supplier. In its early years it struggled to match the quality of LCD leaders in South Korea, Japan and Taiwan. However, generous government subsidies have helped it and the rest of the display industry. According to research by the Nikkei Asian Review, BOE received over 2 billion yuan ($283 million at current rates) in subsidies last year.

As a result of this strong support, the little-known BOE has gradually emerged as an aggressive rival to other Asian suppliers in the past 10 years.

The Beijing-based company in 2018 opened the world's first production line for 10.5-generation liquid crystal display -- the largest available at the time. It also became the world's largest LCD display supplier by shipments the same year. Its revenue surged nearly tenfold to 97.1 billion yuan between 2008 and 2018, and today it is a supplier to many leading tech companies including Chinese TV brand Hisense, Lenovo Group, HP and Dell.

BOE since 2017 has supplied LCD panels to Apple for its MacBook and iPad, increasing pressure on established players such as Samsung Display, LG Display, Japan Display, Sharp and Taiwan's AU Optronics.

Apple and BOE did not respond to the Nikkei Asian Review's request for comment.