Chinese display manufacturer BOE is significantly increasing its OLED production capacity to secure a pivotal role in Apple’s supply chain for upcoming iPhone models. Following a setback in May 2022, when Apple removed BOE from the iPhone 13 supply chain due to unauthorized design changes, BOE has been working to mend its relationship with Apple. The crisis began when BOE, facing component shortages and yield issues, altered the circuit width of its thin-film transistors without Apple’s permission.
Upon discovering this, Apple mandated BOE to cease production. Since then, the company has been making strides to regain Apple’s trust, eventually receiving approval to supply OLED panels for the iPhone 14, albeit in limited quantities. As reported in UBI Research’s China Display Trend Report, BOE aims to expand its role in the iPhone production process and capture a greater share of Apple’s competitive display supply chain.
The company has centralized its iPhone panel production at its B11 fabrication plant in Chengdu, Sichuan Province. This facility has been undergoing continuous expansion and now features 26 OLED module lines dedicated exclusively to Apple. Of these lines, 11 are currently in mass production while three are reserved for development.
With each production line capable of yielding 350,000 panels monthly, BOE’s output capacity for iPhone displays reaches about 8 million units per month. This would translate to an annual output of over 100 million panels at optimal utilization rates. Currently, Apple primarily sources OLED panels from South Korean companies Samsung Display and LG Display.
The inclusion of BOE in Apple’s iPhone production is likely to pressure the pricing strategies of Samsung and LG, enhancing Apple’s negotiation leverage. However, BOE’s sustained presence in Apple’s supply chain is contingent on consistently meeting strict quality standards. While BOE has gradually increased its market share across iPhone generations, its participation in the launch phases of new iPhone models remains limited.
Hence, significant increases in supply share may not happen until future models, such as the iPhone 18.
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