Chinese display manufacturer Beijing Oriental Electronics (BOE) could lose out on 30 million display orders for the upcoming iPhone 14 after it reportedly altered the design of the iPhone 13’s display to increase yield rate, or the production of non-defective products, according to a report from The Elec (via 9to5Mac).
Apple tasked BOE with making iPhone 13 displays last October, a short-lived deal that ended earlier this month when Apple reportedly caught BOE changing the circuit width of the iPhone 13’s display’s thin-film transistors without Apple’s knowledge. (Did they really think Apple wouldn’t notice?).
This decision could continue to haunt BOE, however, as Apple may take the company off the job of making the OLED display for the iPhone 14 as well. According to The Elec, BOE sent an executive to Apple’s Cupertino headquarters to explain the incident and says it didn’t receive an order to make iPhone 14 displays. Apple is expected to announce the iPhone 14 at an event this fall, but The Elec says production for its display could start as soon as next month.
In place of BOE, The Elec expects Apple to split the 30 million display order between LG Display and Samsung Display, its two primary display providers. Samsung will likely produce the 6.1 and 6.7-inch displays for the upcoming iPhone 14 Pro, while LG is set to make the 6.7-inch display for the iPhone 14 Pro Max.
According to MacRumors, BOE previously only manufactured screens for refurbished iPhones. Apple later hired the company to supply OLED displays for the new iPhone 12 in 2020, but its first batch of panels failed to pass Apple’s rigorous quality control tests. Since the beginning of this year, BOE’s output has also been affected by a display driver chip shortage.
As an industry expert with a demonstrable understanding of display technologies and the dynamics of supply chains in the tech sector, I can provide valuable insights into the recent developments involving Beijing Oriental Electronics (BOE), the Chinese display manufacturer, and its potential loss of 30 million display orders for the upcoming iPhone 14.
The reported alteration of the iPhone 13's display design by BOE to increase yield rate is a critical aspect to consider. The yield rate, or the production of non-defective products, is a key metric in manufacturing, especially in high-demand products like smartphones. BOE's decision to modify the circuit width of the iPhone 13's display's thin-film transistors without Apple's knowledge highlights a breach of trust and raises questions about the company's adherence to contractual agreements and quality standards.
The consequences of this decision are significant, as it has led to the termination of the deal between BOE and Apple for iPhone 13 displays. The short-lived partnership ended when Apple discovered the unauthorized design change. This breach of trust could have far-reaching effects on BOE's future contracts with Apple, as evidenced by the possibility that BOE might lose out on the opportunity to manufacture OLED displays for the iPhone 14 as well.
BOE's attempt to explain the incident by sending an executive to Apple's Cupertino headquarters suggests a recognition of the severity of the situation. However, the absence of an order to produce iPhone 14 displays raises doubts about the future collaboration between the two companies.
In response to the potential gap in display production, The Elec suggests that Apple may turn to its other primary display providers, LG Display and Samsung Display, to fulfill the 30 million display order for the iPhone 14. The expected division of labor sees Samsung likely producing the 6.1 and 6.7-inch displays for the iPhone 14 Pro, while LG is set to manufacture the 6.7-inch display for the iPhone 14 Pro Max.
It's noteworthy that BOE's history with Apple includes a previous role in supplying OLED displays for the iPhone 12 in 2020. However, BOE faced challenges, as its initial batch of panels failed to meet Apple's stringent quality control standards. Additionally, BOE's output in the current year has been affected by a display driver chip shortage, adding another layer of complexity to its relationship with Apple.
In summary, the intricate interplay of trust, quality control, and supply chain dynamics in the tech industry is evident in the case of BOE and Apple. The potential repercussions for BOE highlight the importance of transparent and reliable partnerships in delivering high-quality components for cutting-edge devices like the iPhone.
