Last week Patently Apple posted a report titled "LG Finalizes Plan for OLED Panels Supporting Apple iDevices and beyond." The report was limited in the specifics of the deal. Today more information has surfaced that reveals that LG will produce as much as 45 million six-inch displays for Apple once their new plant is operational

A Korean tech report published today states that LG Display and Apple agreed on the amount of yearly supply and LG Display's position as the second supplier of OLED panel. Patently Apple began reporting on this as far back as April 2016 in a report titled "LG Racing to become Apple's Number Two OLED Display Source."

The report further noted that LG Display negotiated with Apple even before its board of directors meeting that took place on the 25th of July and was finally able to secure rights to supply its flexible OLED panels to Apple. Due to this agreement, it decided to make new facility investments worth 30,000 OLED panels per month into P10 addition to its current 15,000 OLED panels that are produced from E6.

It is heard that both Samsung Display and LG Display are having final negotiations regarding size of Apple's upfront investment and terms of support.

LG Display had been discussing with Apple regarding supply of its flexible OLED panels since last year. Unlike LCD, flexible OLED has to be manufactured according to terms from a customer. Because billions of dollars are invested into display facilities, investments can only be decided after agreeing with a customer on problems such as size of production.

Production capacity of 45,000 6th generation flexible OLED panels per month is equivalent to yearly production of 53.46 million 6-inch Smartphones. Even if yield is at 60%, 32.07 million OLED iPhones can be manufactured in single year.

LG Display and Apple agreed on amount of supply of OLED panels and is currently discussing about size of upfront investment. Although LG Display can lower financial burden if it receives huge amount of fund right away, it needs to carry on lower profit ratio due to reduced unit cost of supplies.

Although LG Display started making facility investments after making agreements with Apple, there is no guarantee that Apple will purchase certain amount of OLED panels. If amount of supply of panels is reduced due to low sales of iPhones, LG Display is in charge of the amount that corresponds to rest of supplies. This is the reason why panel manufacturers are always happy with upfront investments.

About Making Comments on our Site: Patently Apple reserves the right to post, dismiss or edit any comments. Those using abusive language or negative behavior will result in being blacklisted on Disqus.