It was just last week that we reported that Apple's iPhone 6 was now in the Product Validation Test stage prior to mass production. A reader commented on that aspect of the report by saying "…given the rumors of a September 9 unveiling, isn't it a bit late for the Product Validation Test stage?" I agreed with him because it was an oddity and today we've been given a partial answer to as to why that testing phase was so late in coming. We wrap up our report with several new supply-chain rumors that surfaced earlier today.
According to Reuters, two supply chain sources said that Apple's display panel production suffered a setback after the backlight that helps illuminate the screen had to be revised, putting screen assembly on hold for part of June and July.
One said Apple, aiming for the thinnest phone possible, initially wanted to cut back to a single layer of backlight film, instead of the standard two layers, for the 4.7-inch screen, which went into mass production ahead of the 5.5-inch version.
Supply chain sources had previously noted that there were challenges with the new iPhone's screen in-cell technology, which eliminates one of the layers in the LCD screen to make it thinner, caused a delay in the production of the larger 5.5-inch version. We first reported on that issue back on July 22.
In the end, the Reuters "exclusive" didn't really reveal that much because at the end of their report fully acknowledged that "Output is now back on track and suppliers are working flat-out to make up for lost time." Yet we knew that for the most part with the news of the validation testing last week.
In other Apple supply chain news today we found three extra reports from DigiTimes. The first states that several peripheral chip suppliers for the next-generation iPhone are preparing to build up combined inventories of related ICs equivalent for the production of 100 million units in the second half of 2014.
The amount of pending IC inventories is based on the latest market speculation indicating that sales of the next-generation iPhone are expected to surpass 100 million units in 2014, higher than the previous projection of 80 million units, said the sources. That supports what we reported on last week that Apple's chip orders to TSMC were so massive that it's disrupted their entire chip business scheduling.
In a second report they note that Apple has been asking Elpida/Micron and SK Hynix to ramp up supplies of mobile RAM, but the two firms have been reluctant to increase their shipments as chip prices offered by Apple are less than desired. So to ensure steady shipments of its new iPhones, Apple has had no choice but to add Samsung back into the supplier list for mobile RAM chip.
And lastly in DigiTimes' third report we had a bit of laugh. According to DigiTimes' own research wing, "US-based GT Advanced Technologies (GTAT), the exclusive sapphire supplier for Apple, is estimated to supply enough sapphire to make covers for up to 1.35-2.25 million 5.5-inch iPhones by the end of 2014 based on the progress of GTAT's sapphire production ramp."
Considering that iPhone 6 estimates come in at the 80 to 120 million range, their call for only 2.25 million 5.5 inch iPhones being ready by the end of 2014 seems insanely low. Apple could probably sell 2.5 to 5 million units of the 5.5 inch iPhone 6 in the first weekend it debuts, eyes closed. So unless there's a piece to this story yet untold, it's a little difficult to take seriously.