The problems facing Apple’s third-party display supplier, BOE, appear to have gone from bad to worse, according to a new report. The company is now in danger of losing all iPhone 14 orders.
Too many of the company’s displays failed quality checks, and the BOE reportedly tried to resolve this by quietly changing the specs, without telling Apple…
Chinese display maker BOE was only third in Apple’s supply chain, behind Samsung and LG, but still expected to make as many as 40 million OLED displays this year for a range of iPhone models.
However, the BOE ran into two problems that cast doubt on this figure. First, I was struggling to buy enough display driver chips. As we noted earlier, these are one of the components most affected by the global chip shortage.
The global chip shortage was created by a combination of factors. These include increased demand for technology during the pandemic, COVID-related production disruption, and growing demand for chips from automakers; as automobiles rely on an ever-increasing number of microprocessor units.
The biggest problem isn’t with CPUs and GPUs, but with much more common chips like display drivers and power management systems. These relatively low-tech chips are used in a large number of devices, including those from Apple.
Second, BOE was experiencing low throughput rates – the proportion of units that passed quality control.
Performance rates are always a challenge for Apple vendors, as the company’s specifications are often more stringent than those set by other smartphone manufacturers. Even Samsung Display, which has the most advanced OLED manufacturing capabilities, has at times seen performance rates as low as 60% for iPhone screens.
Apple display supplier BOE tried to cheat
Apparently, BOE was experiencing such poor returns that it decided to cheat by quietly lowering the specs on the iPhone screens it made.
Specifically, the reports ElElec, changed the circuit width of film transistors, presumably making them thicker and thus easier to fabricate. Unfortunately for BOE, that didn’t go unnoticed by Apple.
The company was found to have changed the circuit width of the thin-film transistors in the OLED panels it made for the iPhone 13 earlier this year, people familiar with the matter said.
This was done without Apple’s approval in a likely attempt to increase the rate of return, they said.
BOE tried to explain its actions, but it seems that Apple was understandably unimpressed.
The Chinese display panel sent an executive and C-level employees to Apple headquarters after the incident to explain why they changed the circuit width of the transistors.
They also asked the iPhone maker to approve the production of OLED panels for the iPhone 14, but did not receive a clear answer from Apple, they also said.
Cupertino appears ready to hand over the order for around 30 million OLED panels it had intended to give to BOE before the incident to Samsung Display and LG Display.
Samsung remains the leading supplier and is expected to make all the higher spec displays for the iPhone 14 Pro and Pro Max models.
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