(Yicai Global) Oct. 18 -- After rivals such as Samsung and HTC have all adopted the OLED (Organic Light Emitting Display) screen, which has a higher resolution ratio, and is more energy saving, Apple Inc. cannot resist it anymore. Foreign media from 2017 Apple will upgrade its new iPhone flagship products to an OLED screen.
Mr. Zhang Bing, research director of the study institute IHS Inc. [NYSE:HIS] told Yicai Global reporters that, "This is a market with an annual production of a few hundred million phones."
Yet Mr. Zhang also said that, "Technical limitations mean few companies can now produce OLED screens. Although a resolution to these technical problems in the near futureis in sight, it is still not that easy for everyone."
"Suppliers in China basically have no chance. OLED's main supply chains are in Japan and South Korea, while China focusesonly on small-sized OLEDs." Mr. Huang Shaoyun, general manager of Shenzhen D-Light Technology Corp. told Yicai Global.
Other Chinese suppliers, however, are more chipper. "In fact, many screen producers in China are gearing up for OLED manufacturing and it will be technically feasible. The main worry is the barrier to equipment investment." Mr. Li Ping,chief executive of Zhejiang province-based Jiaxing Zhongyi Carbon Technology Co., said to Yicai Global.
Mr. Gao Yudi,general manager of Visionox Technology Ltd. also told our reporter: "Everyone has the chance."
In March 2016, Mr. Gao showed media his factory's OLED pilot line located in Kunshan, in eastern Jiangsu province and said: "A mass production line is set to come online and Apple company has visited here." However, he invoked a "silence period" and declined to disclose information on current mass production. He also made no comment on "whether he would scramble after Apple's orders".
Existing OLED suppliers in China mainly include Visionox Technology Ltd., Shanghai Everdisplay Optronics Ltd., BOE Technology [SZ: 000725] and Shenzhen China Star Optoelectronics Technology Co., Ltd. Visionox is currently a Samsung cooperative partner.
Mr. Zhang predicts that among the OLED screen suppliers, the first-tier that Apple will choose will be Sharp and LG, with the second-tier Japan Display Inc. (JDI) and Panasonic, etc. Chinese suppliers have scarce capacity to mass produce OLED in a short time.
Little doubt exists that Apple's favored supplier must be Sharp. Japanese media report that Sharp and its parent -- Hon Hai Group -- have already started relevant assessment and planning to engage in mass production of OLED panels in China in 2019, which is mainly because the assembly plants for Apple's iPhone are gathering here.
As part of the new plan after being acquired by Hon Hai Group, Sharp has already increased its investment in OLED screens to JPY200 billion (USD2 billion). Sharp has reportedly conveyed its intentions to equipment manufacturers producing OLED panels in mainland China. Apple's screen replacement is thus likely to become an important historical opportunity for Sharp to catch up with Samsung.
At present, most mobile phone manufacturers still use the LCD screen --still also a fixture for standard TVs, but it is truth universally acknowledged in the industry that OLED is the future. IHS forecasts that the market for the OLED smart phone screens in 2018 will surpass LCDs to reach USD18.6 billion.