South Korean Companies Start to Make Investments Again for Apple’s OLED iPhones

Sep 13, 2017

South Korean companies started making second investments in order to supply their products to Apple for its OLED iPhones.. Because Apple is planning to double the amount of models that will be equipped with OLED displays in 2018 after releasing its first OLED iPhones this year, many Smartphone part manufacturers started extending their production facilities. It is heard that Apple is planning to produce up to 170 million OLED iPhones in 2018 after producing about 70 million OLED iPhones this year. If current Smartphone part manufactures obtain entire orders of increased supply, Apple’s sales will jump by about 140%. It is predicted that its sales will jump up to 100% even if reduction in unit cost due to increase in supply is considered. Billions of dollars worth of trickle down effect is expected as Apple is set to release more OLED iPhones.
According to industries on the 12th, FPCB (Flexible Printed Circuit Board) manufacturer called BHE is currently pushing for CB (Convertible Bond) issues worth $44.3 million (50 billion KRW). It recently held an IR (Investor Relation) for its investors in order to extend FPCB production facilities and to prepare funds for operation.
BHE extended its facilities at the end of last year. Reason why it is looking to increase its production capacity again in such a short amount of time is because number of orders from Apple has increased by a lot.
BHE is supplying RFPCB (Rigid Flexible PCB) to Apple for its OLED iPhones. RFPCB is a product that combines ‘rigid’ PCB and ‘flexible’ PCB. BHE’s RFPCB was first applied to a new iPhone that was released in the morning of the 13th.
Although Apple is only applying OLED display to one of the iPhone models this year, it is planning to apply OLED display to at least two of the iPhone models that will be released in 2018. Actually it is understood that Apple started a new project in order to develop 5.85-inch and 6.46-inch flexible OLED displays for iPhones that will be released in 2018.
“Project for developing displays that will be applied to 2018 iPhone models has started.” said multiple representatives in this industry. “There will be at least two OLED iPhones released in 2018.”

CEO Tim Cook of Apple who attended WWDC 2017 (Reference: Apple) <CEO Tim Cook of Apple who attended WWDC 2017 (Reference: Apple)>

If number of models that are applied with OLED displays increases, amount of supply of Smartphone parts needs to be increased too. Industries are predicting that Apple will require 170 million OLED displays in 2018 which is about 2.4 times more than how much it requested this year (70 million).
Investment made by BHE reflects Apple’s business plan in 2018 and it can be seen as a signal that informs others about additional investments made by a company that is part of OLED iPhone’s supply chain. It is likely that companies that are part of OLED iPhone’s supply chain will start to make investments on full-scale by the end of this year.
It is heard that Inteflex, which supplies RFPCBs to Apple, is also looking to extend its production facilities during second half of this year. Besides RFPCB for OLED displays, Interflex is also supplying RFPCBs for TSPs (Touch Screen Panel).
It is expected that yearly sales of BHE and Interflex in 2017 will increase by 100% compared to sales from 2016 by supplying FPCBs to Apple.
Possibility of Samsung Display making additional investments is also growing. Samsung Display is the sole OLED display supplier of Apple and is producing OLED displays at its A3 facility in Tangjung. Production capacity of this facility is 105,000 OLED displays per month. If yield and operation rate of this facility are both 100%, it is able to produce about 124 million 6-inch panels and 130 million 5.8-inch panels in a year. In order to satisfy 170 million panels that Apple is asking for, Samsung Display needs to extend its facilities. Industries are showing interests to how 6th generation flexible OLED facility called ‘A5 (tentative name), which is currently being constructed by Samsung Display, will be used. It is heard that Samsung Display is planning to invest at least $4.43 billion (5 trillion KRW) into A5 facility. When it starts making investments, display equipment manufacturers will benefit from Samsung Display’s investments.
It is heard that Apple thought about applying 5.28-inch and 6.46-inch OLED displays to 2018 models until recently. However it decided to postpone development of 5.28-inch OLED display.
It decided to postpone development of 5.28-inch OLED display because consumers prefer bigger screens and it has a technology that is able implement a large display while maintaining entire size of a Smartphone small like a full-screen or bezel-less Smartphone.
Staff Reporter Yun, Keonil | benyun@etnews.com

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