Apple Display Supplier BOE Faces Business Risks with iPhone Manufacturer Amid Quality Control Issues, Fulfilling Just 20% of Panel Orders

BOE’s Role in Apple’s Supply Chain: Challenges Ahead

BOE has successfully established a foothold in Apple’s highly competitive supply chain by mass-producing Low-Temperature Polycrystalline Silicon (LTPS) panels for the budget-friendly iPhone 14, iPhone 15, and iPhone 16 series. There were hopes that BOE might also secure contracts to produce Low-Temperature Polycrystalline Oxide (LTPO) screens if they could overcome existing quality control challenges. However, recent reports suggest that these same issues may jeopardize BOE’s future orders with Apple, prompting the tech giant to consider alternative suppliers.

Production Slowdown in Early 2024

As of early 2024, BOE’s production rates have lagged significantly, with estimates indicating they have only delivered 7-8 million OLED panels to Apple. According to OLED-info, the company was projected to ship around 40 million LTPS units, meaning they have only managed to fulfill about 20% of their obligations. This substantial shortfall raises concerns for Apple, which may be forced to seek out more dependable partners to mitigate supply chain risks.

Competition from Established Suppliers

Apple already collaborates with industry giants like Samsung and LG, who are responsible for manufacturing the advanced LTPO OLED panels used in the premium ‘Pro’ iPhone models. With BOE’s ongoing struggles, it is likely that Apple could realign its orders primarily to its Korean partners, a shift that could lead to increased costs for the company. This change may result in Apple paying a premium for critical components to ensure timely deliveries, ultimately inflating their overall production expenses.

Past Issues Haunting BOE

BOE’s difficulties are not new. In 2022, Apple temporarily banned the manufacturer after discovering irregularities, including attempts to modify the display circuit of the iPhone 13 to cut manufacturing costs. Although the ban was later lifted, BOE has yet to effectively address these past mistakes, leaving Apple with little patience for additional quality concerns moving forward.

As the smartphone market evolves and quality standards rise, the future of BOE’s partnership with Apple hangs in the balance, contingent on their ability to enhance production quality and reliability.

News Source: OLED-info

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