DigiTimes:
Apple has purchased evaporators from Korea-based Sunic System to build a 2.5G OLED panel line to develop related technology and products in Taiwan, according to a Korea-based ET News report.
“Apple is eagerly developing its own OLED technology in order to reduce its reliance on Samsung Electronics for the supply of OLED panels, while enabling it for product differentiation”, said the report.
Apple’s move will break the dominant position held by Japan-based Canon Kokki in the evaporator market, according to a Chinese-language Commercial Times report. Canon Tokki is currently the primary supplier of evaporators and ships the bulk of its output to Samsung.
This is a big move by Apple. Not only does this help reduce their reliance on an arch-competitor, it allows them to more finely control their supply chain. At the rarified levels at which the iPhone sells, it can be difficult to source high quantities of the more state-of-the-art parts.
Bringing manufacturing in house is a bet that the up front cost will be more than amortized by the number of iPhones sold. Given Tim Cook’s supply chain expertise, my bet is that this is no gamble on Apple’s part.
UPDATE: As several readers have pointed out, it’s more likely that Apple will provide this equipment to a selected partner, let them run the factory. Makes sense.
They aren’t going to move the production in-house. That’s not how Apple rolls. They’re going to provide those evaporators to a carefully selected partner, who will produce the panels exclusively for Apple. Exactly the same arrangement as with sapphire production a few years ago (which went badly and you can be sure Apple will be much more careful about who they team up with this time), or with aluminum milling machines a few years before that.
Apple likes to have full and total control over component production, without having to actually own the production process or take on the risk of owning a factory and having to deal with labour issues, etc. Thier solution is to own the specialized expensive equipment, but lease it out to some other company whose job it is to deal with the headaches of actually running the factory.
This purchase makes a whole lot more sense than most of the oft-repeated analyst and fanboy blithering about how Apple should acquire Netflix or Tesla.
Exactly. This is tactical, strategic, and smart. It leverages Apple’s resources rather than using them bluntly.
This sounds (in retrospect) like an obvious move. They won the right to do exactly this with processor chips years ago, with enormous positive consequences, including independence from Samsung.
The hard part will be to avoid ugly patent disputes.
And here I thought they would’ve doubled down on microLEDs.