By Kim Yoo-chul



Apple may soon be using LG Display as a "second supplier" for its advanced organic light-emitting diode (OLED) panels in the next premium iPhones, sources directly involved with the issue told The Korea Times, Thursday.



Having LG Display as its alternative supplier is expected to help the iPhone designer source OLED displays faster and cut costs, they said.



Apple has relied on LG's chief cross-town rival, Samsung Display, for its OLED supply, meaning the Samsung affiliate could charge higher prices given its dominant position in the small OLED display market.



"Initially, Apple will get between 3 million and 5 million OLED displays from LG Display. LG plans to increase its production capacity," said an industry official familiar with the matter.



"Apple is attempting to release new iPhones with enhanced features next year and it is eyeing developing foldable iPhones, which will come several years later."

The deal is worth "millions of dollars," according to the executive. "Apple wants to expand the partnership with LG into OLEDs from LCDs," he said. "However, the key concern is LG has smaller production capacity for OLEDs used in portable gadgets compared to Samsung Display. The quality of the V30 display isn't as good as Samsung's OLED display in its Galaxy lineup."



For comparison, Samsung's initial deal with Apple was to produce about 110 million OLED displays for the iPhone X.



An LG Display spokesman in Seoul said the company can't comment on client-related issues.



LG is frantically trying to boost its production capabilities to meet Apple's requirements, which could give Apple leverage to reduce its reliance on Samsung.



"Securing a second supplier for OLED screens is crucial for Apple as it will allow the company to reduce its reliance on Samsung," said Jerry Kang, a senior principal analyst at IHS Markit. "At the same time, it will help accelerate a broad adoption of OLED screens. More suppliers means more volume and, in turn, lower pricing."



Apple paid LG Display about $83 million in 2009 and 2010 as part of its purchase agreement with the firm. LG used the money earned from the deal to keep its factories running at a time when LG Display had been hit hard by an industry downturn.



"LG wants a bigger cut than what the company has at present as LG aims to spend more to boost its OLED production capacity with continued financial assistance from Apple," a fund manager at a U.S.-based investment bank in Seoul said.



LG Display reported a 98.3 billion won operating loss in the first quarter of this year due to weak display prices, mostly stemming from an oversupply. Analysts expect the company's operating loss in the April-June period exceeded 200 billion won.

