Sales for the newly launched OLED-equipped iPad Pro (2024), particularly the 11-inch model, have seen a downturn following an initial positive reception. In light of changing market dynamics, LG Display, a key supplier for Apple, has decided to move its focus away from manufacturing iPad OLED panels and direct its resources toward producing OLED screens for the iPhone.
This strategic shift allows LG Display to optimize costs and bolster their capacity in producing OLED displays for iPhones. Currently, OLED production for iPhones is managed by LG Display's E6-1, E6-2, and E6-3 manufacturing lines. To accommodate this change, the company is contemplating adding a new production line capable of generating up to 15,000 Gen 6 glass substrates monthly, a move projected to cost around 2 trillion Korean won (approximately $1.4 billion). In contrast, the establishment of the production line dedicated to iPad OLED panels incurred a cost of $2.3 billion.
LG Display aims to ramp up its supply of iPhone OLED displays to 70 million units this year, an increase from the mid-60 million range shipped last year and the 51.8 million panels delivered in 2023.
The design specifications differ significantly between iPad and iPhone OLED panels, with the iPad featuring two emission layers and employing a glass substrate with thin film encapsulation (TFE), while iPhone displays utilize a single emission layer and a plastic substrate with TFE. This change in production strategy will allow LG Display to streamline manufacturing by skipping certain manufacturing processes, thus accelerating their output of iPhone OLED panels.
Given the anticipated decline in demand for the iPad Pro (2024) this year, LG Display plans to hold a stock of iPad OLED panels while shifting the production line to enhance iPhone OLED output. This transition will, however, require Apple's endorsement of the new production line; the approval is due by February, by which time LG Display expects to have enough iPad OLED panels in inventory.
The OLED displays for the 11-inch and 13-inch versions of the iPad Pro (2024), released in May, mark a significant milestone as they are the first iPads to incorporate OLED technology.
