Apple will stop purchasing displays for iPhone in Japan due to the transition to OLED

Starting next year, Apple will use OLED displays in all iPhone models, including the low-cost iPhone SE models, Nikkei reports. The move will exclude two Japanese liquid crystal panel (LCD) panel suppliers – Japan Display (JDI) and Sharp – from the US company’s mobile device component suppliers.

Image Source: Brooks Kraft/Apple

Until about ten years ago, JDI and Sharp together supplied about 70% of iPhone displays. However, they have recently been the LCD-only supplier for the affordable iPhone SE as Apple has switched to using OLED displays in all other smartphone models. South Korean and Chinese companies are leading manufacturers and suppliers of OLED panels.

According to several sources, Apple has begun placing orders for OLED displays for the upcoming iPhone SE from China’s BOE Technology Group and South Korea’s LG Display. This change marks the end of the era of LCD screens in the iPhone, writes Nikkei. The new iPhone SE model, slated for release next year, will also feature an OLED display, along with the standard iPhone and premium Pro models.

South Korea’s Samsung Electronics supplies OLED displays for about half of iPhones, while LG Display’s share is about 30% and China’s BOE is about 20%. Neither JDI nor Sharp mass produce OLED displays for smartphones. It is expected that supply of their iPhone LCD displays will cease with the end of the older SE version.

OLED displays create images using organic compounds that emit red, green and blue colors. Without the need for a backlight, they provide brighter colors and higher contrast than LCDs. With the growing demand for smartphones as devices for watching movies, sports, and also for playing games, South Korean company Samsung began offering OLED displays as a replacement for LCD displays in 2009.

Apple first used OLED panels in the iPhone X, which debuted in 2017. The company has since switched from using LCD displays to OLED panels in its standard and higher-end smartphone models. By around 2015, JDI and Sharp reached annual shipments of about 200 million LCD displays for the iPhone. However, by 2023 this figure has dropped to 20 million.

OLED displays will surpass LCD in smartphone shipments for the first time this year, according to UK research firm Omdia. As the iPad and other products begin to use advanced OLED displays, Apple is expected to further reduce its purchases of LCD panels.

Japanese manufacturers until recently considered Apple their main client and therefore expanded production in response to rising iPhone sales. For example, JDI previously generated about 60% of its revenue from supplying LCD panels to Apple. However, the transition to OLED displays for the iPhone has left the Japanese manufacturer with excess capacity. The company posted net losses for 10 straight years through its most recent fiscal year, which ended in March.

Although JDI develops energy-efficient OLED displays, it currently only supplies compact OLED panels for devices such as the Apple Watch. The manufacturer’s main focus is now focused on the supply of LCD panels for automotive media systems. As noted, Sharp is also reducing its LCD display business. In August, the company stopped operations at its Sakai plant in Osaka, which produced large LCD TV screens. It has also reduced capacity at its Kameyama plant in Mie Prefecture.