Apple’s OLED Panel Suppliers Are Worried About Slumping Mac Sales

As we’ve reported in the past, Apple is planning to transition its iPad and Mac lineup to OLED displays over the next few years. Unfortunately for the Cupertino firm, a new report says the two companies most likely to manufacture the OLED panels for Apple are holding off on making the large investments necessary to build production lines for the next-generation displays due to rising concerns over Apple’s slumping Mac sales.

Apple is expected to launch its first OLED-equipped iPads as soon as next year, and South Korean display manufacturers Samsung Display and LG Display are planning to use their existing Gen 6 production facilities to meet Apple’s display requirements for that initial 2024 rollout.

However, Samsung Display and LG Display plan to build more advanced Gen 8 production lines to handle Apple’s increasing requirements for more iPad and MacBook OLED displays beyond that first run, as these newer lines will be more cost-effective while yielding more OLED panels per substrate than the current Gen 6 production lines.

Unfortunately, the Korean publication The Elec recently reported that the two display manufacturers have yet to place any orders for the equipment necessary to get the Gen 8 production lines ready to go, which will take at least a year to build before they can begin production.

The Elec report’s sources indicate that the Korean panel companies are reluctant to invest in new production lines due to their concerns about profitability. Since there is no track record for OLED panel use in MacBook models, the suppliers aren’t confident about how many OLED panels Apple will order and how much Apple will be willing to pay for them.

There are also some valid concerns over just how many OLED panels Apple will require for its MacBook lineup due to a recent plunge in sales. During its fiscal second-quarter earnings last week, Apple reported only $7.2 billion in Mac revenue, a precipitous drop from the $10.4 billion from the same quarter last year.

It should be noted that Apple is not the only computer maker to see its sales suffer in the last fiscal quarter; the global PC market as a whole also faced a severe downturn in shipments over the same time period.

Earlier this year, Apple told its processor supplier TSMC to temporarily suspend production of the processors used in the Mac lineup, later resuming production at only half capacity.

The use of OLED displays is also expected to drive up MacBook prices, but with the drop in revenue from Mac sales, the two display makers expect Apple will try to pay as little as possible for the OLED panels.

Samsung Display and LG Display face difficult investment decisions in the near future, as there are no true estimates as to how many OLED panels Apple will need for its MacBooks. Samsung in April said it had plans to spend 4.1 trillion won ($4.1 billion) to build Gen 8 OLED display production lines by 2026. LG Display is already having financial difficulties, and building any new production lines will only add to its financial woes.

Display industry analyst Ross Young recently tweeted that he expects to see Apple launch an OLED display-equipped MacBook Air as soon as 2024. An OLED-equipped iPad Pro may also see a 2024 launch.

Samsung Display is expected to provide OLED panels for future iPad Pro, MacBook Air, and MacBook Pro models; however, the first MacBook Pro models sporting OLED displays aren’t likely to appear before 2026.