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Apple “Aggressively Testing” New Flexible Smartphone Screens Made By Chinese Firm

Courtesy of ZeroHedge View original post here.

Apple is still working to move more iPhone production outside of China, mostly by pressuring chipmakers and the sources of other components to build assembly lines in Vietnam and elsewhere. But the company isn't totally giving up on China, and, in fact, is planning to source the OLED screens for its next generation of iPhones from a Chinese company called BOE Technology Group, according to Nikkei Asian Review.

Apple is reportedly nearly done certifying advanced screens from BOE, China's top OLED manufacturer, for next year's iPhone. The screens are reportedly peerless when it comes to cost and other variables like battery life, and using them is part of Apple's efforts to cut costs and reduce its reliance on Samsung, which is both a rival and a supplier. The US consumer-tech giant has been "aggressively testing" the technology.

The entry of BOE into one of the world’s most demanding smartphone supply chains would mark a significant 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.

Unlike LCD screens, OLEDs consist of fibers consisting of organic materials, which allows them to both consume less power, show better contrast and color and allow for thinner and possibly foldable smartphones.

Of course, whatever Apple saves by using these cheaper screens could be offset by Washington's tariffs, which will impact consumer goods and components like smartphone screens. But according to the report, Apple has been unable to source screens of a comparable quality from South Korea, the US or Japan. Currently, Apple buys most of its OLEDs from Samsung, which dominates 90% of that market.

BOE also supplies screens to Huawei’s revolutionary Mate X foldeable smartphone. But the company is still vulnerable to retaliatory sanctions against the US, since it sources many of the materials used to make the screens from US companies. It could also be vulnerable to a Huawei-like crackdown.

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 US to clamp down on supplies to BOE – as Washington did to Huawei Technologies – could hit the Chinese display champion badly.

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

BOE has just opened up a new production line for its latest generation of screens.

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 shipment the same year. Its revenue surged nearly 10-fold to 97.1 billion yuan ($13.81 billion) 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 has since 2017 supplied LCD panels to Apple for its MacBook and iPad, increasing pressure on established players such as Samsung Display, LG Display, JDI, Sharp and Taiwan’s AU Optoelectronics.

The company was founded in 1993 as a military and defense suppliers. For years, it struggled to compete with South Korean screen makers, but that has changed, thanks in part to government subsidies.


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