Apparently, Apple’s investment in the OLED manufacturing plant is “expected to help LG Display reduce risks from the lower margin,” the report says, citing an industry source.
Let’s take a closer look at what this could mean for LG Display and Apple.
Apple gets supply; LG Display gets a major customer
Apple is expected to use OLED displays supplied by LG for the premium iPhone model that’s expected to launch in this year. However, the company is also to launch two new iPhone models at roughly the same price points that the iPhone 7 and iPhone 7 Plus currently occupy, utilizing liquid crystal display (LCD) technology.
If Apple “invests” in this manufacturing capacity, that reduces the amount of capital that LG Display risks up front (though it’s not clear the extent of which LG Display’s overall risk is reduced because the terms of this arrangement — should it ultimately happen — aren’t publicly known yet).