Apple is trying to increase the parts self-sufficiency rate, the ‘yellow light’ is on the Korean parts industry. Until the launch of the iPhone 8 in the second half of this year, Korean semiconductor, display, camera module and other parts are very popular, but the situation seems to be changed.
According to Taiwan Taipei Times and other medias, Apple plans to mass produce micro LED panels at Taoyuan factory in Taiwan starting from the end of this year and apply it to Apple Watch 3 (tentative name), a new smart watch.
The micro LED is a next-generation display that follows organic light emitting diodes (OLEDs), which is advantageous for miniaturization and weight reduction because the chip size is only 5 to 10 μm. Apple is reported to have been preparing for R & D and mass production of the US micro LED maker LuxVue in 2014.
When Apple applies Apple’s own micro-LEDs to watch 3, LG Display, which has been the exclusive source of OLED for this product, will receive a direct hit. The Korean industry expects that if Apple uses its panels on Apple’s watch, its domestic sales will drop by more than $ 230 billion.
Apple watches are not a big deal because they are not big enough, but the problem is that Apple will apply micro LEDs to smartphones. Apple applied OLED to Apple watch and tested it first, and likely applied the OLED to iPhone 8 that will launch in the second half of the year. This will affect Samsung Display, which supplies OLEDs to the iPhone 8, as well as LG Display, which has a strong supply potential. The scale is estimated to reach $1.2 billion per year. Especially, Apple is likely to apply OLED panel of BOE to China to launch iPhone 9 next year, and China Star is also proceeding a deal with Apple, so it can face a sandwich situation in Korean OLED industry.
There are concerns that LG Innotek, which offers dual cameras for iPhone 8, can not be relieved. LG Innotek’s sluggish performance last year was largely due to sluggish camera module business due to weak iPhone sales. The company’s camera module sales account for 70 percent of Apple’s revenues.
An official in the Korean electronics industry said, “Korean parts makers are currently enjoying a boom in Apple, but Apple may soon face a crisis. Diversification of suppliers should diversify the crisis, but it is not an easy environment due to China’s THAAD issue and strengthening of world protection trade.”