China's largest display manufacturer, BOE, is expected to see a significant reduction in the supply of organic light-emitting diode (OLED) panels for Apple iPhones this year due to quality issues. This could serve as a turning point for LG Display, which is currently struggling with losses. Additionally, the application of OLED panels in the new mid-range iPhone models being released by Apple is anticipated to be a positive factor.
According to industry sources on the 13th, the volume of mobile OLED panels that BOE will supply for iPhones in the second quarter of this year is expected to be significantly reduced. Given that the panels entangled in quality issues are high-end panels used in the iPhone Pro lineup, it has increased the likelihood that Samsung Display and LG Display will benefit.
BOE is reported to have not yet received mass production approval for low-temperature polycrystalline oxide (LTPO) thin-film transistor (TFT) OLEDs for the iPhone Pro lineup. LTPO OLEDs are higher-end models compared to low-temperature polycrystalline silicon (LTPS) OLEDs and are priced about twice as high.
LTPO OLED panels improve power consumption by 10 to 15% by complementing the weaknesses of existing LTPS TFT processes and oxide TFT processes. However, due to the high difficulty of technical implementation and low yield rates, they have primarily been used in high-end OLED display panels.
Apple plans to apply LTPO technology to all models of the iPhone 17 series, set to be released in the second half of this year, but currently, only LG Display and Samsung Display can stably mass-produce this technology. According to the Korea Display Industry Association, the market share of LTPO OLED panels for the two companies reaches 86.8%.
Estimates of OLED shipments for last year's domestic panel manufacturers for the iPhone 15 and 16 are approximately 100 million units for Samsung Display and slightly over 60 million units for LG Display. If BOE does not quickly resolve its quality issues with LTPO OLEDs, the shares of Samsung Display and LG Display in Apple iPhones are expected to increase.
Additionally, the budget model iPhone SE4 that Apple is releasing this year will be equipped for the first time in the SE series with an OLED panel instead of an LCD (liquid crystal display) panel, leading to an expected increase in OLED purchases by Apple compared to the previous year.
The consensus on LG Display's first-quarter performance for this year, as compiled by financial information provider FnGuide, estimates revenue at 6.0194 trillion won and an operating loss of about 152.9 billion won. Revenue is expected to increase by 14.6%, while the scale of operating losses is projected to decrease by 67.4%.
Meanwhile, LG Display aims for profitability this year and is focusing on improving its revenue. The company reported an operating profit of 83.1 billion won in the fourth quarter of last year, successfully achieving profitability for the first time in four quarters, but recorded an annual operating loss of 560.6 billion won, continuing losses for three consecutive years since 2022. However, considering the annual losses of 2.085 trillion won in 2022 and 2.05102 trillion won in 2023, the scale of operating losses is showing a significant downward trend.