Speaking of the iPhone 14
As we have noted previously, there have been issues surrounding the production of displays for the iPhone 14 series this year, with questions as to BOE (200725.CH) status with Apple generally, and problems that LG Display (LPL) was having with the production of LTPO (Low-temperature Poly-Oxide) displays, which are used in the iPhone 14 Pro and Pro Max. Given that Samsung Display (pvt) has been producing LTPO displays for a number of customers, including parent Samsung Electronics (005930.KS) since August 2020, they have considerable experience in that display production process and have supplied a number of smartphone brands with such displays, including last year’s iPhone 13 Pro Max.
According to recent industry estimates, Apple has ordered over 17m iPhone 14 units from its display suppliers through the end of August and is expected to order ~16.5m units this month. With delivery dates of 9/16 for all models other than the iPhone 14+ (10/7/22) we assume the company expects it has sufficient inventory to meet pre-order deliveries that are similar to last year. That said, Samsung Display ordered additional module process equipment last month and this month for its production facilities in Vietnam, with confirmed orders from at least three local Korean suppliers, AP Systems (265520.KS), HB Solutions (297890.KS), and Philoptics (161580.KS) totaling over $40m. We expect that the popularity of the iPhone Pro and Pro Max, and the production limitations at LG Display, will skew SDC’s share of iPhone 14 family display share higher than expected, especially as they participate in the production of displays for all four models, although we expect the highest margins (and their biggest focus) is on the LTPO models, which seem to be getting most of the pre-orders (see “iPhone Sells in China Despite Criticism” above).
According to recent industry estimates, Apple has ordered over 17m iPhone 14 units from its display suppliers through the end of August and is expected to order ~16.5m units this month. With delivery dates of 9/16 for all models other than the iPhone 14+ (10/7/22) we assume the company expects it has sufficient inventory to meet pre-order deliveries that are similar to last year. That said, Samsung Display ordered additional module process equipment last month and this month for its production facilities in Vietnam, with confirmed orders from at least three local Korean suppliers, AP Systems (265520.KS), HB Solutions (297890.KS), and Philoptics (161580.KS) totaling over $40m. We expect that the popularity of the iPhone Pro and Pro Max, and the production limitations at LG Display, will skew SDC’s share of iPhone 14 family display share higher than expected, especially as they participate in the production of displays for all four models, although we expect the highest margins (and their biggest focus) is on the LTPO models, which seem to be getting most of the pre-orders (see “iPhone Sells in China Despite Criticism” above).
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