Sharp provides OLED panels in its own new smartphones after this year and plans to sell the screens to other manufacturers, though it has signalled it’s cautious about a rapid expansion in OLED as momentum for its thinner but more expensive displays slows.
The move comes as the Osaka-based electronics maker, a significant supplier of iPhone liquid crystal display (LCD) screens, continues its recovery after being purchased a couple of years back from Taiwan’s Foxconn.
Sharp’s OLED smartphones will initially go on sale in Japan, undoubtedly its major market after it slashed its overseas smartphone business. The company hasn’t yet attained any bargains for earnings to other smartphone manufacturers, a spokeswoman said at a launch function in Tokyo.
Sharp has thus far spent JPY 57.4 billion ($505 million) to produce OLED panels in western Japan, less than a third of the planned 200 billion yen investment that was announced by Foxconn at the time of its acquisition in 2016.
Sharp executives have said a shift from traditional LCD displays to more flexible OLED displays has been slower than expected as a result of high prices, making the company cautious about aggressive OLED capacity expansion in the near term.
The slower endorsement of pricier OLED panels has also offered some aid to Japan Screen Inc, yet another iPhone LCD screen supplier lagging behind Samsung and LG Display in OLED technology.
Japan Screen has stated it might push back the beginning of OLED business production, currently scheduled for 2019, while seeking a partner to help fund the launching of a mass production line. Analysts say it generally costs more than JPY 200 billion ($1.8 billion) to begin a mass production line.
“To our surprise, our customers are not moving away from LCD panels,” Chief Financial Officer Takanobu Oshima said in August.
South Korea’s Electronic Times reported earlier this year that Apple has opted to use OLED screens in all 3 new iPhone versions planned for next year, compared to two OLED models this year.
But industry sources have told Reuters that Apple would not completely abandon low-cost LCD screens at least for next year.
Still, analysts say the OLED panel market could pick up if improvements in manufacturing efficiency at Korean and Chinese panel manufacturers lead to lower costs. OLED panels provide richer colors than LCDs and permit for foldable telephones.