BOE's response to Apple's OLED supply yield falling short of expectations: No disclosure of customer information

According to the latest report from Korean media, the yield rate of small and medium-sized OLED panels supplied by BOE A to Apple was lower than expected, and Apple placed additional orders with Samsung and LG. In response, on the afternoon of July 27, BOE A responded to the reporter of Securities Times e-company: "We have never disclosed the cooperation situation of individual customers."

Yield rate is lower than Apple expected?

According to Korea Times, an industry executive familiar with Apple's supply chain revealed that the yield rate of small and medium-sized OLED panel products supplied by BOE A to Apple is lower than expected.

The person revealed that Apple has signed an OLED supply agreement with LG Display and Samsung Display, and the two companies will be responsible for providing small OLED panels for Apple's upcoming iPad models. Among them, Samsung will receive the majority of the orders, providing Apple with approximately 120 million OLED panels for future iPads. In addition, the executive also stated that LG will provide 50 million OLED panels for the next generation iPad, more than double the number of orders previously received. LG's E6-3 production line has been designated for the manufacture of OLED displays for future iPads. In response to this, on July 27, a Securities Times e-company reporter called BOE A, and the company said: "We never disclose the cooperation situation with individual customers."

Previously, Apple planned to introduce OLED panels for the new iPad, and the new product will be launched next year. This is the first time that Apple has equipped a tablet with OLED panels, and the iPhone has introduced it a long time ago. Stakeholders expect that Apple will release the iPad Air (tentative name) in the second half of 2022. This model will use a 10.9-inch "Hybrid OLED" screen provided by Samsung Display. Compared with conventional LCDs and MiniLED backlit LCDs, OLED screens have the advantages of being thin, light, power-saving, and eye-protecting, but Apple iPad products have been reluctant to introduce OLED because OLED previously had obvious disadvantages such as high cost, low yield, and short life, which could not guarantee the reliability and stability of iPad products.

However, in recent years, Samsung and other companies have continuously upgraded their technology to enable the development of small and medium-sized OLEDs, further reducing the thickness and cost of OLEDs. Currently, tablet computers such as Samsung, Huawei, and Lenovo have begun to use rigid OLED screens, and laptop manufacturers such as Lenovo, Asus, and Dell are also actively introducing rigid OLED screens.

High-end laptop panels are popular

In parallel, on July 27, TrendForce’s official WeChat account released the news that “Oxide, LTPS, and OLED high-end laptop panels are popular, and their market share is expected to exceed 20% in 2022.”

TrendForce estimates that the market share of high-end laptop panel shipments will reach 17.8% in 2021 and is expected to reach 21.4% in 2022. According to TrendForce's research, the demand for laptops has increased significantly due to remote work and teaching between 2020 and 2021, which not only drives the shipment of laptop panels to show double-digit growth, but also the price increase of more than 40%, which has become an incentive for panel manufacturers to actively invest in the production of OLED, LTPS, and Oxide high-end laptop panels.

Specifically, OLED technology panels are mainly supplied by Samsung Display (SDC), which shipped about 800,000 panels in 2020, and has the opportunity to reach more than 4 million panels this year, and will continue to grow in 2022. In addition to Samsung, Everdisplay Optoelectronics (EDO) is also expected to mass-produce OLED laptop panels from the second half of 2021 to the first half of 2022, and it is estimated that the overall OLED laptop panel market share will reach 1.3% this year. BOE and CSOT are also committed to the development of Hybrid OLED technology. However, Hybrid OLED still has technical and cost bottlenecks to be broken through, and mass production may not be possible until after 2023.