Apple is moving forward with its plans to transition its Mac and iPad lineups to OLED displays over the next few years. However, a new report out of Korea says display panel manufacturers are holding back on making key investments in its next-generation OLED production facilities, due to their rising concerns about slumping Mac sales.
Apple is expected to launch its first OLED iPads in 2024 and South Korean display manufacturers are planning to make use of their existing Gen 6 production lines to supply Apple’s needs for that 2024 rollout. To handle Apple’s iPad and MacBook OLED display needs, Samsung Display and LG Display plan to build Gen 8 production lines, as they will yield more OLED panels per substrate than the Gen 6 lines while being more cost-effective.
However, The Elec reports that the two Korean panel manufacturers have yet to actually place orders for the key equipment required to build out the Gen 8 production lines, which will take at least a year to set up.
The publication’s sources suggest the Korean panel companies’ reluctance to invest in new production lines is linked to the firms’ concerns over profitability. Currently, since there is no track record for using OLED panels in MacBooks, so there are concerns over how much Apple will be willing to pay for the OLED panels.
There is also some concern over just how many panels Apple will need or order, considering the recent slump in MacBook sales. Apple recently announced its fiscal second-quarter earnings and reported a significant year-over-year drop in Mac revenue (down to $7.2 billion from $10.4 billion the previous year).
Apple is not the only computer manufacturer to suffer from a drop in sales, as the entire global PC market also faced a severe downturn during the quarter.
We’ve also seen reports indicating that Apple earlier this year requested a temporary suspension in the production of Mac processors, later resuming production at only half of supplier TSMC’s capacity.
Using OLED displays in MacBooks is likely to drive up the sales price of the laptops, so display suppliers are said to believe that Apple will attempt to drive down the price of units.
Both Samsung and LG face difficult investment decisions in the months ahead since they aren’t sure how many OLED panels Apple will order. Samsung in April announced that it is planning to spend 4.1 trillion won ($4.1 billion) on building Gen 8 OLED production lines by 2026. LG Display is already having financial difficulties.
Display analyst Ross Young said that he expects Apple to launch a MacBook Air with an OLED display, as soon as 2024. Apple may also launch an OLED iPad Pro that same year.
Samsung is expected to supply OLED panels for the iPad Pro, MacBook Air, and 14- and 16-inch MacBook Pros, although the Pro models are not expected to make a transition to OLED displays until 2026.
