Sharp says making adequate volumes of display used in iPhone5
(Reuters) - A Sharp Corp executive said the company is making “adequate volumes” of displays it is known to supply for Apple Inc's new iPhone5, indicating that a bottleneck in supplies of screens may have eased.
Context & Ripple Effects
The backdrop is a rough summer for Sharp's Apple business: after years of supplying iPhone displays dating back to its next-generation multi-touch LCD revealed in 2007, the company hit production delays on the new screen just before launch, per the late-August report of delayed iPhone screen output at Sharp. Its April 2012 start of IGZO display mass production — amid rumors of Apple use — was supposed to be the ramp that made it a core supplier.
Today's statement that volumes are now 'adequate' lands alongside LG's August confirmation that it too had begun producing the new screen, showing Apple entered this launch with multiple panel sources rather than depending on any one Japanese or Korean maker. The pickup across AppleInsider, AllThingsD, MacRumors and Gizmodo reflects how closely the supply question was being watched during the global iPhone 5 rollout.
First-order effects
- Sharp's Kameyama-area display lines move from bottleneck to steady state, protecting its revenue contribution from the iPhone program at a moment when the company can ill-afford underutilized panel capacity.
- Apple's assembly partners get relief on the scarcest component, letting the ongoing global rollout proceed without screens capping unit output.
Second-order effects
- LG's parallel screen production becomes the benchmark Sharp must match on yield and volume, since Apple can shift allocation between suppliers once both are running adequately.
- With two qualified panel sources, Apple gains pricing leverage over both, squeezing margins in a display segment where only high-volume flagship orders make the lines profitable.
Third-order effects
- If the pattern holds, flagship phone launches will routinely depend on three-plus display suppliers ramping simultaneously, with each generation's bottleneck determined by how fast new panel technology (like IGZO) reaches adequate yield rather than by any single factory.
- Japanese panel makers' role narrows to competing on next-generation technology for Apple designs, while Korean rivals compete on scale — a structural squeeze on companies like Sharp whose finances depend on winning those design slots.
The trend: Smartphone display supply is consolidating around multi-sourced panel programs where launch volumes hinge on how quickly each supplier ramps new screen technology to adequate yield.