The problems facing the tertiary Apple display supplier BOE appear to have gone from bad to worse, according to a new report. The company is now threatening to lose all orders for the iPhone 14.
Too many of the company’s displays failed quality checks, and BOE has reportedly tried to fix this by quietly changing the specs — without telling Apple…
Background
Chinese display maker BOE once ranked third in Apple’s supply chain, behind Samsung and LG, but still hoped to make a whopping 40 million OLED displays for a range of iPhone models this year.
However, BOE ran into two problems, which cast doubt on this number. First, it struggled to buy enough display driver chips. As we noted earlier, these are one of the hardest hit components in the global chip shortage.
The global chip shortage has been created by a mix of factors. These include increased demand for technology during the pandemic, COVID-related production disruption and growing demand for chips by automakers; as cars depend on an increasing number of microprocessor units.
The biggest problem is not with CPUs and GPUs, but with much more mundane chips such as display drivers and power management systems. These relatively low-tech chips are used in a wide range of devices, including Apple’s.
Second, BOE was dealing with poor yield rates – the number of units that passed quality control.
Yield rates are always a challenge for Apple vendors, as the company’s specifications are often stricter than those of other smartphone makers. Even Samsung Display, which boasts the most advanced OLED manufacturing capabilities, sometimes had an efficiency of only 60% for iPhone displays.
Apple display supplier BOE tried to cheat
BOE apparently had such low yields that it decided to cheat by quietly lowering the specs on its iPhone screens.
Specific, reports TheElec, it changed the circuit width of the film transistors, presumably making them thicker and thus easier to manufacture. Unfortunately for BOE, that didn’t go unnoticed by Apple.
The company was caught changing the circuit width of the thin-film transistors on 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 effort to increase revenue, they said.
BOE tried to explain its actions, but it seems Apple was understandably unimpressed.
The Chinese display sent a C-level executive and 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 iPhone 14, but did not get a clear answer from Apple, they also said.
Cupertino seems poised to give the order for about 30 million OLED panels that it planned to give BOE to Samsung Display and LG Display before the incident.
Samsung remains the main supplier and is expected to make all the more advanced screens for the iPhone 14 Pro and Pro Max models.
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