It's being reported today that Samsung Display is selling the entire Cheonan Gen.5 LCD manufacturing facilities' L5 equipment to a Chinese company. Samsung Display's L5 facilities had been producing medium and small-sized panels. However it was having a difficulty in securing profitability. Why is this news? Because one of the reasons Samsung provided for getting out of the LCD line is that it's extending its OLED lines is because its negotiation with Apple about supplying OLEDs has been progressing rapidly. It is heard that Samsung Display has recently been in negotiations with Apple about supplying OLEDs for iPhones.
The Korean report further noted that "If it accomplishes a contract with Apple, it is highly likely that Samsung Display will consider about building lines exclusively for Apple's OLEDs. Japan Display decided to construct new Gen. 6 Flexible LTPS OLED facilities after receiving $1.72 billion (2 trillion KRW) for 3 years by Apple in May."
Japan Display is the leading iPhone display supplier. That's an interesting twist considering that Reuters stated in March the plant was for LCD displays for iPhones. Was that an assumption at the time that the display plant was for LCD's?
"Even if Samsung Electronics extends its A3 OLED Line that is currently operating, it will not be able to meet all of Apple's supplies." said a person from display industry. "However because it will be able to solve this problem if it operates lines exclusively for Apple, it is currently examining a method about preparing new OLED Lines by receiving certain amount of fund from Apple." There is a high chance that L5 facilities will be used for Apple.
Although Samsung Display is in a process of adjusting final supplies, it already initiated its business with Apple by supplying OLED panels for Apple Watch and a fact that it received high praise after supplying large quantity to Chinese Smartphone manufacturers recently will be advantageous for Samsung Display.
One source at Samsung Display stated that "We also cannot reveal any information on our deal with Apple."
The timing of when Apple could be considering a switch to using OLED displays for iDevices is unknown. Rumors still abound that Foxconn is building a new LCD plant for iPhones, but these rumors have been circulating for years.